Money

Justin Schwartz jkschw at hotmail.com
Mon Sep 3 10:00:04 PDT 2001


Well, no one likes _paying_ taxes, not even me. (Though my admin law prof, who described himself as an old style tax-and-spend liberal, govt is better when bigger, said that _he_ liked paying taxes!) People like the benefits they get from public spending, though in proper decision-theoretic fashion they would rather others paid for those benefits. That's why public goods provide a collection action problem, people prefer to free-ride. And of course, resentment of government programs varies with who benefits from them. Conservative, welfare-hating farmers think that farm support programs are great. Younger people don't see the point of Medicare. I myself don't like military spending.

But even when one does benefit, as with schools, there's a wince factor. In Evanston, the Chicago North Shore burb where I live, property taxes are very high because there is little commercial tax base and Northwestern University, a huge tax-exempt free rider, contributes nothing back to the community. Every six months,w hen my tax bill comes due, I wince. But I vote for new bond issues. Not, however, with joy.

I suspect that a lot of American anti-tax attitudes and hostility to gummint spending reflects the fact that, although out tax burden is comparatively light compared to the social democratic countries, so are the benefits we receive from the gummint. In Europe, where the gummint pays for your health care, much or all of your higher education, and so forth, there is relatively little pressure, compared to the US, to reduce taxtion. That's not the whole story of course. But if we got more, we'd like it better.

jks


>From: Doug Henwood <dhenwood at panix.com>
>Reply-To: lbo-talk at lists.panix.com
>To: lbo-talk at lists.panix.com
>Subject: Re: Money
>Date: Mon, 3 Sep 2001 11:53:52 -0400
>
>James Baird wrote:
>
>>But i think orthodox ideas about finance go deeper
>>than just fatcats on Wall Street. The average man on
>>the street now (and I imagine then) is always
>>complaining about the gummint wasting his tax dollars
>>(even if he doesn't pay much in the way of taxes) on
>>durnfool schemes.
>
>I suspect thinking on this was very different in 1937 than 1997.
>
>Also, if you ask Americans if government spending is wasteful, most
>will say yes. If you ask specific questions - do you like Social
>Security? Medicare? do you think government should help the poor?
>(without using the word "welfare") - they say yes.
>
>But why do people believe that (unspecified) government spending is
>wasteful? Aside from the usually present racial subtext, it's also
>that they've been hearing this crap from politicians and pundits for
>decades. And why to politicians and pundits say that? Because they
>get their ideas and money from the ruling class, which has a deep
>material interest in spreading that rancid gospel.
>
>Doug

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