Public Discourse on Taxes: Unsophisticated and Demagogic

Things have only gotten worse since I noted in my 1981 college textbook that the politics of taxation in the U.S. was a mess:

"It is apparent that . . . although the electorate has the legal right to boot the rascals [members of Congress] out on the basis of their decisions regarding taxes, voters are in no position to exercise that right methodically in their own interests. Public discourse on taxes is uniformly unsophisticated and demagogic. As long as the present degree of complexity in taxes is preserved, there is very little that anybody will be able to do about this."

Although taxes are always unpopular, people will support them if the alternatives — government inability to provide essential services — are worse.

Unfortunately, our complicated tax system helps special interests confuse the public about this trade-off, shielding themselves from paying taxes. Both Republicans and Democrats contribute to the problem.

Most Washington Republicans take the "Norquist Pledge" never to support tax increases. Without mentioning this, they manage to find fault with every proposed tax increase.

Of course, they support reducing taxes. But governing is experimental. If they guess wrong and lower taxes too much, Norquistism prevents them from correcting the mistake.

Much of the current deficit stems from huge tax cuts during the Trump administration.

Congressional Republicans (and, lately, some Democrats) even attack attempts to crack down on rich people and large corporations who are illegally evading taxes. These proposed reforms would increase revenues without increasing taxes for honest people.

As Washington Post columnist Catherine Rampell recently noted, these legislators are condoning fat cats who cheat on their taxes. Of course cheats donate some of their savings to their favorite politicians, who hesitate to bite the hands feeding them.

Playing defense against Republican strategy, Democrats promise to raise taxes only on wealthy people, but this approach is almost as harmful as that of the Republicans.

The promises by Barack Obama and Joe Biden not to raise taxes on the middle class made it impossible for them to back single-payer medical insurance, the efficiency of which would save nearly everybody money.

Soaking"" rich people would not provide enough to pay for single-payer. Taxes would have to be raised on everybody.

But for most people the tax increases would be less than what they currently pay, directly and indirectly, for medical care. These expenses would be eliminated by a single-payer system.

Our institutions also hinder voter comparison of the costs and benefits of state and local taxes. In 1978, voters amended California's constitution, severely limiting property tax increases. Other states, including my own Oregon, have copied California.

Inflation has made it increasingly difficult to support essential public services with the local property tax. Governments therefore resort to gimmicks. In Corvallis, Oregon we now finance certain city services like police with "fees" added to our water bills!

The increasing complexity of our taxes creates many opportunities for the rich to evade paying what they owe without anybody noticing.

As I noted in 1981, complexity in private transactions (such as purchase of life insurance) often evokes government regulation, since consumers may otherwise be unable to figure out their own best interests.

But a consumer who can't evaluate complex products will also be overwhelmed by governmental complexity when making choices as a voter.

If government regulations can protect consumers from complicated private transactions, who will protect voters from excess complexity in government itself?

Increasing frustration and the feeling that public affairs are out of control may be largely due to the monumental complexity of today's government and its policies, including taxes. The right to vote isn't worth much if people can't predict the consequences of how they vote.

It is hard to see how to fix this mess.