Why taxation can be good
A few years ago, Barack Obama got into some trouble with the phrase “you didn’t build that.” Fodder for bad-faith conservatives (all of them?), and Fox Propaganda Network. They attacked his “disdain” for the American entrepreneur. Cue placards with “I built this” at rallies. And no doubt several bullshit Hannity and Tucker Carlson segments railing against socialism.
The unsaid word that was wilfully misinterpreted in President Obama’s phrase was “alone”. Nobody builds anything alone. His comments were a reminder of the benefits a government can bring in enabling, and empowering, its own society. Things like education, healthcare, research investment, a postal service, roads and bridges. All the things individuals rely on, but also businesses both small and large.
Such thinking is anathema to the right. Public spending implies taxes, and taxes that might impact even the rich that they protect. A billionare might have a few dollars fewer. But, really, it’s the other aspect that scares them the most, that they need to attack the most; the very idea that the government can do good.
That’s the message of the right. They use it to justify any anti-tax message, any spending cut they can (bar the military). And, for the ultra-rich, maybe this is a sensible…if immoral…economic stance to take. But for the 99%, and, I would argue, for the 1% also, if they took a broader view, low spending and low taxes are false economies, false savings.
I live in Texas. A low-tax state in a low-tax country. I earned just under $200k last year, and my tax burden was under 25%. Great, right? I come from the UK originally, and that seems like a staggeringly low tax rate for my income level.
But…the roads here are awful. The public school system is chronically underfunded. I spend around $10k a year on health insurance for myself and my family. That spending is before any of us even need medical care (and then there’s a few thousand dollars more in deductibles before insurance kicks in). University costs when my children are older could run into hundreds of thousands of dollars.
My low taxes come at a cost. An indirect cost from poor infrastructure and poorly funding social services. And a direct cost for things I have to pay for out of pocket in the absence of any public provision. That’s not even considering the benefits I would gain from everyone around me also being more supported, educated, healthy, and supported. And I’m very lucky! I have a house, a car, a job that seems stable. I have options. Poor infrastructure is an inconvenience for me, not a blocker to my life, like it might be for some people. I can save to pay for some of the future costs I might incur for health and education needs. Millions can’t.
Philanthropy doesn’t fill this gap. The private sector would neglect any need that doesn’t bring a profit. Public infrastructure, social welfare, are initiatives requiring state and national government responses. Higher taxes would impact my personal take home pay. But it would be in exchange for spending to support society as a whole.
Decades of conservative lies and propaganda about the evils of government have obfuscated the extent to which government can do good. That government should do good. The state should protect its citizens from poverty, from crime, from racism, from disease. And it should empower them, creating an environment where they are free to pursue opportunity. Freedom from something (e.g. the burden of tax) is no use without the freedom to be able to do something (i.e. opportunity).
These things are achieved by a genuinely proactive government that isn’t looking for every opportunity to cut spending, or cut a program that helps the most vulnerable. Conservative and libertarian approaches entrench the wealthy of today by crushing the opportunity of those in the future; that harms individuals, and it also harms the future success of the country.
A state, intervening by spending tax revenue, can support all its citizens and their aspirations. It should do so, to the benefit of all.