Tax Rates and Dogmatism

In a recent post about the claim that JFK was conservative, I addressed the point that he pushed tax cuts; I noted that his tax cuts left top marginal rates at 70%.  If direction is all that matters, that makes him conservative, I said, otherwise not.

Matt Yglasias makes a similar argument about a George Will column arguing that Kennedy was conservative, but he seems to suggest that direction doesn’t matter at all: “[Will’s column] remarkably fails to tell us what tax rate JFK favored…[After the Kennedy tax cuts, signed by LBJ,] the top marginal income tax rate went all the way down to 70 percent….That doesn’t sound all that conservative to me.”  But surely lowering the rate from 90 to 70 percent is a conservative action, as far as it goes.

Yglesias continues: “Or, rather, I suppose the fact that Will would think it’s conservative highlights what’s wrong with the way conservatives think about tax policy.”  Whereas liberals want to get the right tax rate, by the standard of revenue maximization, conservatives just want to lower taxes, at whatever level they are, Yglesias says; conservatives assume liberals are their mirror image and just want to raise taxes, no matter what, so in their minds, “liberals are yearning for a 100 percent tax rate so any admission that any rate—even 91 percent!—might be too high, suddenly turns JFK into Grover Norquist.”

So for Yglesias, conservatives view liberals as yearning for a 100 percent tax rate, and this shows their anti-empirical, absolutist way of viewing the tax debate.  But progressives automatically claim that opponents of any tax hike, or supporters of any cut, are “anti-tax ideologues” or “zealots” rather than applying detailed analysis to the question of the optimal rate of the tax in question for the locale in question.  Anti-tax dogma is behind any position on a directional change, under the progressive assumption; in other words, conservatives are “yearning for a 0 percent tax rate.” 

If you assume that any support for a tax cut, or opposition to a tax hike, is based on dogmatism, that must mean there’s no evidence for such a position, ever, which means you can support all tax hikes, and oppose all tax cuts, without looking at evidence- in other words, dogmatically.

If Yglesias were right, progressives would not take their bearings at all from the status quo tax rate, but simply apply objective analysis to figure out what the tax rate should be.  This isn’t true at all, on taxes or on the broader political debate.  Consider the way progressives talk about spending cuts, for instance. 

For another instance, note that progressives consider it prima facia evidence of unreasonableness that conservatives are unwilling to increase taxes in exchange for spending cuts in a budget balancing deal.  If they were just looking for the optimal levels of spending and taxation, this wouldn’t be the case.  Suppose we take in $5 of revenue and spend $7 each year, and we want to balance the budget.  If you take your bearings by the status quo, and the direction and amount of change is important, you will say we should spend $6 and tax $6.  But if you’re just trying to create an optimal budget, independent of such considerations, you might favor balancing the budget through only spending cuts, so that we take in $5 and spend $5; or you might even want to cut taxes, so that we take in $4 and spend $4. 

Supposedly sophisticated progressive policy wonks routinely parrot Democratic talking points about “tax cuts for the rich,” and being sophisticated they often call these “regressive” tax cuts.  But “regressive” cuts leave us with a progressive tax code.  If you weren’t taking your view of what is “normal” by the status quo, or the status quo ante tax cut, you would simply look at how the tax code distributes the tax burden.  Progressives also refer to tax cuts as costing government money, which implies either that they view previous rates as normal or (as Rush Limbaugh always alleges) that they view all money as belonging to government, with any we keep as ultimately a gift (in other words, that they yearn for a 100% tax rate after all, morally speaking, though as a pragmatic matter it may be necessary to allow greedy people to keep something in order to get them to work, or to install solar panels.) 

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