Justice Holmes Had it Right on Taxes

Justice Holmes Had it Right on Taxes

Printer-friendly version

Capital Exchange is a new blog featuring debate among some of Washington’s smartest budget and policy experts. –Eric Pianin, Washington Editor and Moderator

a a
Type Size: Small

Thursday is Tax Day, the  date by which tens of millions of taxpayers must file their returns. And like clock work, anti-tax conservatives will use the occasion to fan the flames of outrage.  It’s all a sorry spectacle, one that reflects a decline in intelligent discourse on fiscal issues.

To be sure, Americans have always been an unusually tax-adverse people.  The American Revolution was fueled, in part, by outrage over British-imposed taxes.  So, not surprisingly, our tax burdens relative to the size of our economy pale by comparison with most  industrialized nations.

Nor should we be surprised that anti-tax fervor has surged in recent decades.  Middle- and low-income Americans have endured stagnant living standards since the early 1970s.  Meanwhile, many Americans have grown disillusioned with the federal government, due either to outright scandals like Watergate and Iran-Contra or government’s failure to fulfill  major promises such as ending poverty or improving education,   The huge amount of federal spending since late 2008 to stabilize our financial system and jump-start our weak economy for many has come to symbolize an out-of-control federal behemoth.  In this environment, you could hardly expect most Americans to happily part with their hard-earned dollars to fund a government that seems far removed from their everyday needs.

But today’s anti-tax fervor, which plays out on Capitol Hill and in communities across the country, has moved beyond the understandable to the irrational.  On the political right, taxes are not merely viewed as unpleasant; they’re considered  evil.  No tax is justified for any purpose – indeed, even to finance things that the right also wants, like a robust defense budget in general or victories in Iraq and Afghanistan in particular.  In fact, experts who have researched the issue say that, for the first time in history, America went to war after September 11, 2001 without raising taxes to finance the effort.

Moreover, on the right, no effort to cut taxes further is ever considered beyond the pale.  Nothing stands in the way – not the fact that Congress cut taxes deeply for both families and businesses in recent years, nor the fact that the federal government is swimming in red ink and faces rising prospects of a short-term economic crisis or a long-term national decline unless policymakers change course.  Nor does the reality of soaring incomes for the most well-to-do Americans in recent decades dissuade conservatives from trying to cut taxes (e.g., income, capital gains, estate) even more at the top.

Alas, Democrats are not immune to the anti-tax temptation.  Some of them helped push through the big Bush tax cuts of 2001 and 2003; some of them want to help Republicans further eviscerate the estate tax beyond the generous reductions that Congress enacted in 2001 (which would provide a new tax break only for those who inherit the very largest estates in America); and few Democrats will stand in the way when President Obama and Congress take action (perhaps later this year) to make permanent all of Bush’s tax cuts for everyone earning up to $250,000 a year – that is, for the vast majority of households.

Ladies and gentlemen – don’t get me wrong.  No one needs to welcome the tax man.  But taxes, per se, are not evil.  They are what Justice Oliver Wendell Holmes aptly called them long ago: “the price we pay for a civilized society.”

During the 2008 presidential campaign, the right mocked then-vice presidential candidate Joe Biden for suggesting that wealthy Americans had a “patriotic duty” to pay more taxes.  Well, he was right (though I don’t know that I would have limited his point about patriotism to those earning more than $250,000 a year).  With the privilege of living in the greatest, the most powerful and the most prosperous nation known to history comes an obligation to pay taxes.  We should stop pretending otherwise, and we should stop demonizing those who are brave enough to say so.

Post your comment below or click here for the next Capital Exchange post.

Lawrence J. Haas is former Communications Director to Vice President Gore and, before that, to the White House Office of Management and Budget. He's now a public affairs consultant who writes widely about foreign and domestic affairs, including fiscal policy. 

Lawrence Haas
is former senior White House official and award-winning journalist, writes widely on foreign and domestic affairs. His articles have appeared in The New York Times, USA Today, Los Angeles Times, Baltimore Sun, Miami Herald, San Diego Union-Tribune