Cost and Consequences...

Shorter McArdle: If you cut taxes, people have more money. End of story.

If your taxes are cut, especially if you pay a high tax rate to start with, then you keep more of your income.  But is that really the end of the story?  Does getting a tax cut really mean you end up with more money?  It’s not so certain.  The tax money that didn’t go to the government ended up reducing the funding for some public program.  That might have many second-order effects which could offset the direct gains from your tax cut.  For example:

• perhaps road maintainence would be reduced. This would put more strain on your car which would require more frequent repairs, so you have less money. Or if you ship products it would be more expensive to use public roads for your trucks, so you have less money.
• perhaps public schools would be more strained and less able to serve the students in your area. If you have kids you might be forced to pay for private schools, so you have less money. Or if you are looking to hire workers for your business you would have to pay more since there are fewer qualified applicants. Or the neighborhood kids who might otherwise be in school turn to crime, lowering property values or stealing your stuff. Ultimately you have less money.
• perhaps police or fire services would be reduced. You could be affected directly or indirectly by fire or crime, either by having your stuff stolen or destroyed, or by having your property values reduced, or by paying higher insurance.  In any case you have less money.
• perhaps food or drug quality would be less accurately verified. You or someone you love could become sick or die eating tainted food or using untested drugs. You have lost your health, which is an even worse outcome then having less money.
  

I could go on.  The point is that any reduction in tax revenue has to be offset by a corresponding reduction in government services.  The question of whether you have a net increase or decrease in wealth in the long term after a tax cut depends on who you are and all the secondary effects that are very hard to calculate.  But anti-tax zealots never attempt to make a serious quantitative analysis. Instead (and unlike McArdle) they argue that reducing taxes will always mean an increase in personal wealth by one of three methods:

1. Supply-side economics.  This is the wacky notion that tax revenues would be higher if only the government didn’t charge such a high tax rate.  Uh huh. Yeah it makes about as much sense as it sounds, which is why even hard right-wing conservatives like McArdle have pretended that they never believed it in the first place.
2. Waste and fraud. Conservatives make a big production about government money spent on “indecent” art, or “worthless” scientific research, or “useless” public works projects. There’s no question that some government money is spent badly, but that’s also true of private money and in many cases more so. Is giving CEOs salaries of hundreds of millions really the most efficient way to run a business? If you really examine how the government spends money it's hard to find obvious waste, especially in the programs that conservatives would most like to cut.
3. Market efficiency. This is the somewhat more controversial theory that services provided by the government would be cheaper if provided by private enterprise. It’s hard to argue against in principle because for anything that really matters it’s never really been tried, but there are serious reasons to question the basic assumption. The main difference between public and private institutions that compete today is that the private versions can discriminate. Private enterprise can exclude any customers that would negatively affect their profits while public institutions cannot. So it depends on the person – you might get a good deal, or you might get nothing. With government services all are treated the same, which makes them cheaper (or at least existent) provided you are not super-rich to start with.

A philosophy of tax cuts requires justification, regardless of McArdle’s willingness to express the true conservative worldview that policies that reduce her personal tax burden are a good unto themselves. Justification demands something both quantitative and universal. So far nothing that the right wing – either Republican or libertarian – has been able to provide can rise to any objective standard. There might be good reasons to alter current tax rates, but it’s got to be more than simple ideology.

- jack*

Comments

"A philosophy of tax cuts requires justification".

I think a philosophy of taxing, or taking other peoples money ,with the backing of force I might add, requires more of justification. I have no problem with people giving money, it's often times in their best interests, but what is the justification for taking peoples money without their consent?

The problem is that there is no easy way to opt into certain things and opt out of other things. But just because it wouldn't be a easy thing to implement doesn't mean one should ignore those who differ in the choice to opt in or opt out.
I'm not a big fan of the majority should be able to tell you what to do because it's in their better interests. With no granular control left to the individual to choose to opt in or opt out its going to be a sucky system for some.
I'd agree there are going to be second-order effects, however one should be allowed to be clubbed over the head with them if they want or to join the band wagon if they'd rather.

[jack*]

A full answer would require it's own post, but the simple answer is this: we all enjoy the benefits of public programs, so we all pay for them. There is no way to factor how much any one program has contributed, directly or indirectly, to your income or happiness. Allowing each person to decide for themselves how much they want to pay for any program would result in rampant freeloading.

The old libertarian "yer takin' ma money with threat of force" canard is foolishly simple-minded. We all have the same access to representation in state and federal government which fully justifies their power to tax. That taxes are extracted by threats of violence is no different, and no less defensible, than the methods used to enforce of any other law.

"we all enjoy the benefits of public programs, so we all pay for them."
I don't have any kids and I don't plan on having any, should I pay taxes for schools?
Not sure if this is a valid example anymore?(but believe it used to be and still may be that real estate taxes were partially used to pay for school systems.)
I prefer user fee's or purchase taxes tied to specific needs wherever possible.

"would result in rampant freeloading." - Not if the program had a non-freeloaders checking system involved. Seems to me that this is just the same as someone saying people can freeload off the current existing systems. Maybe your just saying its more likely? Either way one needs to have a system in place to prevent freeloaders if it has a high chance of being abused.

Money is being taking by force may be " simple-minded.", but it's either True or False.
I think your agreeing it's true? And I think you are saying it's not defensible but justifying a need for it because the majority benefit?

[jack*]

Actually it's the children themselves who are the beneficiaries of public education, not the parents. If you grew up in this country you also were entitled to a free primary and secondary education, same as everyone else. We all also enjoy the benefits of the high standard of living that goes with having an educated citizenry, and the only way to opt out of that is to immigrate.

Of course it's true that taxation is backed up with threats of force. The government also relies on threats to enforce the posted speed limit, or to assure that you show up for jury duty, or to prevent public nudity. Any law may be more or less justifiable, and you may agree or disagree with them, but they are all backed ultimately by state-sanctioned violence. Taxation is no more and no less justified because of the threat of force behind it. That's just now governments work.

I think you are right. I wonder how much I still owe?

Then I think, if I had an amount to pay back , that that would be a good thing and I wonder if I did have kids if I would put them through the same system or try to change it or put them through something else(ie private school.
I'm leaning towards it being the parents responsibility who should opt the child into school or not, and probably not the government, although I might consider it a form of neglect if they did not and a good thing for people who don't have the funds to be able to get a education. Probably a hole other debate.

Maybe it's my naivety, but I think I would prefer a system that is voluntary then compulsory and to work towards such a system.

[Ma'at's Feather]

"Maybe it's my naivety, ..."

Well, frankly, yes it is.

Consider the insane complexity of of 150,000 choices just for local government. "Do I want to give $0.000005 to pay for the person who photocopies the council reports for the file?"

We are social creatures who live in a society and choose some form of government. That might be a democracy, or a totalitarian state, or something else. We can disagree with choices, move, opt-out, protest, etc. But of all possibilities, the 'menu' system of government is the most ridiculous.

I actually see more problems with my "theoretical" opt in and opt out in larger scale things than in the possibilities of complexity in getting bogged down in choices and minute decisions or the trivial things. You could opt to have someone do the thinking and making your money choices for you and the people providing the service could opt to allow fine grain choices or not. And there could also be a bit more of a high tech solution to the matter that would take some pages to expand upon. I've thought a little bit about it and perhaps can get around to writing it up one day. Yes it has the "potential" for being the most ridiculous form of government and there are alot of other problems it "could" have if implemented but as far as I know no one has tried it. I don't really want to get to deeply sidetracked into that theory but it's motivated me to start writing my ideas down in a concrete form on how I think it would/could work. Right now its just a side hobby idea in my head that pops up now and then, When it's done I'll throw it up. The main reason I put it down was because , ridiculous or not it still seems to me that voluntary beats compulsory in terms of trying to justify things.

Yes as a society we do have dominance hierarchy alpha ape syndrome, while it helped insure our existence in the past I don't necessarily agree that is the only road to continue down future. You can try to justify the taxation in a moral sense or a pragmatic sense but so far I still see it as boiling down to people and what each one values type of proposition and how each one goes about their justification. I'm still inclined to see "a philosophy of tax cuts requires justification" as needing less of a justification than a philosophy of taxing. How does one justify a taxation if the person does not want/value/get a particular benefit?