So what is ‘fiscal responsibility’?
There has been some arguing about the dangers of federal deficit spending (little said about the huge private sector debt levels except on econoblogs), but Kevin Drum on Mother Jones notes in a post how the argument appears to be framed in the public’s mind no matter which party or movement is involved:
Ah, the American public. God love ’em. The Economist asked if they’d rather tackle the federal deficit by cutting spending or raising taxes, and the runaway winner was cutting spending, by a margin of 62% to 5%. So what are we willing to cut? Answer: pretty much nothing.”
[snip}
Beyond that, there were only four areas that even a quarter of the population was willing to cut: mass transit, agriculture, housing, and the environment. At a rough guess, these areas account for about 3% of the federal budget. You could slash their budgets by a third and still barely make a dent in federal spending. I suppose one of these days everyone’s going to have to figure this out. Apparently no time soon, though.
Now the comments at The Economist didn’t appear to be much different in tone and content than other sites. However, my bet is he who frames successfully for the moment’s advantage will win, and the budget itself will remain less relevant.
Calling all tax research experts! If there is any such animal.
Are there any recent polls regarding the general public’s attitude toward taxes which breaks the question down a bit so that people can express a greater variety of opinions on the issue?
For example, is the question asked relative to income groups ie, Do you object to a tax increase for people earning a) less than $35,000 per annum, b) less than $75,000 per annum, c) lelss than $125,000 per annum and d) more than $300,000 per annum? Note that a change from “less than” to “more than” is likely to skew the answers. But why not fudge the data?
Also, do such tax question polls break down respondents into groups? It seems unlikely that all Americans would agree on the issue. It seems even less likely if respondents are given the chance to choose income groups whose taxes should be increased, or decreased.
Fiscal Responsibility is keeping government spending at around 19 percent.
The private economy spends on the items below. So what should be cuts to pay for taxes?
Retirement saving
Personal security
Medical Care
Charity to the Poor
Benefits and programs for soldiers
Health Research
Education
Tansportation vehicles
Foreign Investment
Savings for periods when unemployed
Science and Technology
Ariculture
Housing
The environment
I find this percentage of Americans who do not want tax hikes surprisingly small. With the unemployment rate staying at elevated levels and the economy struggling, approximately 49%–nearly HALF– of all Americans will pay no federal income taxes at all for 2009. This is an amazingly high number and implies that in a room of 100 average Americans, 49 of those people will not pay federal taxes this year and a mere 5 of them would rather cut spending than raise taxes.
Talk about rational choice! Half of the room would stand to benefit from increased government spending and an increased tax burden on the economically well off. Put another way: It would be in the economic self-interest of a non-taxpayer to want both increases in the tax rate and increases in spending, yet somehow they prefer neither option.
http://alatazerka.wordpress.com/2010/04/08/polling-americans-on-the-deficit/
Elliot,
It would be in the economic self-interest of a non-taxpayer to want both increases in the tax rate and increases in spending, yet somehow they prefer neither option.
If half of all Americans don’t pay taxes and more than half don’t support tax hikes it must be because many see raising taxes on other people not in their own self interest. For instance a craftsman at a small private boat building business may not want either a special luxury tax on the boats he’s building or much higher taxes for the customers that are likely to buy his company’s product. If they tax the rich and indirectly you lose your job or think you might it would make sense that you would not support tax hikes on the rich. On top of this you might not benefit from the increased government spending that the tax hike is going to pay for. There are very few true paradoxes in this world.
Shake:
If as you say, fiscal responsibility is keeping government spending at around 19% (I assume you mean as a % of GDP here), then it is not rational to think that the government can reach that level without BOTH cutting spending and raising taxes. It is not rational that 71% of Americans agree on cutting foreign aid is a viable way to have any impact at all on government spending as a percentage of GDP. If we were to cut ALL of spending on foreign aid it wouldn’t even amount to 1% of our total government’s budget. The only conclusion one can draw from this poll is that in aggregate, people are totally irrational and largely inconsistent with what they want and how they want to achieve it.
Do you think the average American is really sitting there and contemplating complex economic theories (which there is much evidence that supply-side/trickle down does not work) in reaching these conclusions? Or, do you think it’s more likely that the polling sample was flawed and/or that people just buy into the scary rhetoric around them about spending getting out of control without ever contemplating that taxes got too low for our level of spending long ago?
Not surprising at all. I have always been of the belief that if it was up to the tax payers there would be a 1 percent tax and the goverenment would spend much more than they already do. Even the question of Foriegn Aid if you go deeper than a generic question and asked how much we should spend the number would be much higher than what we actually spend. The ignorence on the budget is possible the single biggest problem in politics because congressmen and women get elected on the promise of magic beans that magical do everything because of course spending on there district is the good spending its the money over there that is the waste.
What is fiscal responsibility?
First, spending wisely.
Second, remember the story of the Seven Fat Years and the Seven Lean Years. Tax enough in the Fat Years and spend enough in the Lean Years.
And do not get the two confused. Guess where we are now. (I would say grin, but there are so many people trying to get us to act like we were in the Fat Years. It is no laughing matter. People are suffering needlessly.)
Jim: “if you go deeper than a generic question and asked how much we should spend {on foreign aid} the number would be much higher than what we actually spend.”
Good point. For some time research has indicated that people understand such questions better in terms of absolute numbers, instead of verbal comparisons or rates. 🙂
Shake
calling an arbitrary number “fiscal responsibility” makes me think you haven’t thought about this very hard. very likely there is government spending that i don’t think is necessary, but… and this will shock you…
if the government spent 99% of GDP and it left me with good housing, good food, free time, a job that was interesting, and an otherwise meaningful life… including lots of time for what matters to me… i’d consider that “fiscally responsible.”
now i don’t think any government can actually deliver on that, so i am happy that there are people keeping a close watch on that spending. but try to remember it’s not some arbitrary number that matters, it’s the quality of life, and yes, “freedom” that comes at the end of the day that matters.
Anyone who thinks half the country doesn’t pay taxes should get themselves a copy of Turbotax and run some “what-if” scenarios.
I just ran one for a single, no deductions, taxpayer making $20K, which I figure is probably the minimum you’d need in mid-priced parts of the country and still expect to live indoors.
Your Federal Income Tax is $1800.
If there is a problem with the median income household of $55K not paying taxes, it would be a problem with TAX DEDUCTIONS.
Then it took a Nobel Prize Winner, Paul Krugman himself, to astutely point out that we pay more kinds of taxes than just Federal Income Tax.
Good job Professor Krugman, I promise to never make fun of economists ever again!
When you evaluate the claim that half the country does not pay taxes remember that only 58% of the population is employed.
Moreover, this is down from 64% in 2000.
So is the real problem taxes, or a lack of jobs?
Most taxes are local anyway, even for people who federal taxes. Start with property taxes.
purple
like most people, i think a lot of my taxes are wasted. i don’t get too upset about it because i am pretty sure even the wasted money comes back to me in the form of economic opportunities that would just not exist in a low tax economy.
and i insist that Social Security is not even a tax, except in name. Because that is money that comes back to you, with interest, when you need it most.
unfortunate use of the same phrase to describe two different things. general tax money comes back in terms of the overall prosperity of the country. social security taxes come back directly… there is a chain of ownership.
I think if they were decreased, automatically the unemployment problems would be resolved..
Silly cyprus….what are corporations doing with the 1.5 trillion in cash they already have in their wallets? And what program spending is not sacred to your point of view?
I remember during the Clinton years when things were looking great and our future was looking great, most Americans didn’t want a tax cut, but instead, pay down the national dept. I tried to find the exact poll but only found lots of references to “Poll’s” stating most Americans did not want a tax cut, but did want dept reduction.
We have come a long way, haven’t we.