A Reply to George Will's Screed Against Progressive Taxation

            I don’t know why I continue to read George Will’s column.  Despite the erudite language, the man seldom has anything intelligent to say (unless he is talking about baseball).  I suppose, for me, it’s like a car wreck on the side of the road.  I know it’s against my better judgment—to say nothing about contributing to a traffic jam on my way out of the Tragic Commons—but I just can’t help it.

            In his latest column, Will insists that there is no “intellectually sturdy case for progressive taxation,” which is the system the American tax code has used since the adoption of the 16^th Amendment in 1913.

            The idea behind a progressive tax system is that people who earn more money ought to pay taxes at progressively higher rates than people who earn less.  It’s a very simple and practical idea.  People who earn a lot of money can more easily afford to bear the burden of paying for the government we need than can people who earn less money.  As a society, we have concluded that poor people have problems enough and that we shouldn’t multiply those problems by imposing heavy taxes on them.

            Will cloaks his argument in pseudo-scientific and pseudo-philosophical language, which hearkens back to Cicero’s tactic of rhetorically throwing sand in the eyes of his listeners when he didn’t have a case.  He makes his argument in the context of trashing Democratic politicians like Bernie Sanders who are focused on reducing economic inequality and argue that one way to do it is to increase the progressivity of the tax system.

            The argument for progressive taxation, Will writes, ultimately boils down to an “essentially aesthetic judgment about how people ought to value money or about the social value of expenditures by the wealthy and non-wealthy. But, quoting a 1952 essay by two University of Chicago law professors, Will argues that this “aesthetic” judgment, when codified in the tax code conflicts with the idea that “It is one of the virtues of a free society that, within the widest limits, men are free to maximize their satisfactions according to their own hierarch of preferences.” 

            From there, Will lapses into a densely packed thicket of nonsense:

It is, however, the nature of reality that burdens imposed on the wealthy minority can injure the majority by impairing economic incentives, thereby suppressing growth. Progressive taxation reduces the rewards of investments and the real rate of return on savings, thereby encouraging consumption over saving and hence over capital formation. When progressive taxation slows economic growth, it makes inequalities of wealth more durable by retarding the accumulation of new fortunes. And by encouraging constant tinkering with the tax code to perfect equity, progressive taxation gives a patina of altruism to rent-seeking by economic factions, whereby government enriches those sophisticated at manipulating it.

            He’s gotten the idea of progressive taxation mixed up with the more libertarian arguments against taxation in general.  It is a fact of all economic life that all taxation “reduces the rewards of investment and the real rate of return on savings, and hence over capital formation.”  Ditto for economic growth, the accumulation of new fortunes, and tax code based rent seeking.  Will’s not just arguing against progressive taxation.  He’s arguing against all taxation.

            Oh, and like someone who has had too much right-wing Kool-aid, Will seems oblivious to the fact that the last thing our economy needs is more savings and capital formation.  What it needs instead is more consumption and demand.

            Lurking beneath the main argument is an outlandish conception of the government as some sort of alien invader. “But who is to decide, and how are they to decide, the ideal spread between the top and the bottom of the income distribution?  The argument for progressive taxation must demonstrate this:  Such taxation does not do more harm by slowing economic growth would do by its distributive effects.” 

            Later on, he writes:

Because other arguments produce only “uneasy” cases for progressive taxation, this is the argument of last resort: All striving occurs in, and all success is conditioned by, a social context. Each individual’s achievement, like each individual, is derivative of society, which is entitled to socialize — conscript — whatever portion of each individual’s acquisition that society calculates is its rightful share. Because collective choices (provision of education, infrastructure and other public goods) facilitate individuals’ strivings, the collectivity, represented by government, can take as much of created wealth as it decides it made possible. Being judge and jury in its own case, government will generously estimate its contributions and entitlements.

           

            Well.

            In the first place, in a democracy, the people decide these things through their elected representatives.  There is no platonic ideal of perfection in real world government policy.  There is only the politically feasible, and that is the basic idea enshrined in the Constitution as explicated in Madison’s Federalist X.  If the people accept the judgments of their legislators, they reelect them; otherwise the people replace those legislators with others who promise to do what the people want.

            And, given that the power to make policy ultimately resides in the people, there is no requirement for legislators to demonstrate anything.  They implement their policy and they take the credit for success and the wrath of voters for failure.  That’s American democracy in a nutshell.

            Will’s solution? Apparently a flat or proportionate taxation in which “If taxpayer A earns 20 times more than taxpayer B earns, taxpayer A pays 20 times more dollars.” Leaving to one side the hardship that this would impose on the poor, flat taxes typically result in lower rates for the wealthy and higher rates for everyone else.  When they don’t do that, flat tax proposals increase the mismatch between federal revenues and expenses, resulting in larger federal budget deficits and more federal debt.

            Surely you can do better than this, George.  If not, then please, just focus on baseball.