Taxes, Government, and the Good Life, Part 2
by Linda Beale
Taxes, Government, and the Good Life, Part 2
In yesterday’s post, Taxes, Government, and the Good Life, I noted the “long-term position of the GOP” in favor of downsizing government, which can be seen, at least in part, as a way to justify the GOP obsession with cutting taxes on the wealthy and on corporations (mostly owned by the wealthy). Worth exploring in that context is Eduardo Porter’s article entitled “The Case for More Government and Higher Taxes,” NY Times (Aug. 2, 2016).
Porter starts by noting the radical shift in the way Americans think about government. “Americans once appreciated the government that serves them. That’s long gone.” He draws on research by the Pew Research Center showing that 4 of every 5 (or more) voters have said in the last 6 years that government makes them feel frustrated or angry.
That anger with government has become extraordinarily visible in this election season as one of the candidates for president has seemingly fed on the distrust and hate of a government whose leader’s face is different from the majority white population. Most of us have seen this anger on the screen during the GOP convention, as Trump supporters–mostly white (only 18 out of almost 2500 delegates were black)–expressed their frustration with the societal changes that they see as leaving them behind and creating a world that they don’t like. On the right, that is, the frustration with government seems to morph easily into vitriol, as Trump supporters openly condemned blacks and used violent expressions to talk about the first female presidential nominee of a major party, Hillary Clinton. (See, e.g., the video below “Unfiltered Voices from Donald Trump’s Crowds”–warning: there is offensive speech here.)
Americans once understood that government allows people–through taxes, through voting, through volunteering–to create public institutions that could never exist if each one of us had to do it alone. Through government, we citizens as taxpayers can accomplish projects much larger than ourselves.
But the shift that Porter mentions has occurred over the last few decades, due, in large part, to the funded effort by various “think tanks” and high-powered, wealthy individuals in support of a larger goal of maintaining very low regulation on Big Oil, Big Pharm and other Big Business and ensuring very low taxation on rich individuals and the corporations they own and manage. The constant repetition of mantras that denigrate government persuade Americans that, as Reagan said while serving as the most powerful government leader in the world, “Government is the problem” or, as Rush Limbaugh said, it should be downsized until it can be drowned in a bathtub (paraphrasing). We constantly hear from the Fox News bloviators that the growth of government stifles the economy, that private enterprise is ALWAYS better than government at doing any job, that public employees should be fired–or at least not allowed to form unions that give them strength in negotiations, etc. Most of these statements appear without support–those on the right simply presume them to be true and are not very willing, in my experience, to delve into the actual facts to see if they support the presumption. And the push for deregulation and tax cuts for the benefit of the rich continues apace.
As we approach this November election, though, we should ask ourselves what evidence there is to support that mantra. Is it just a way to ‘brainwash’ voters into voting against interest? Is it just a way to ensure that the elite 1% continue to be able to get Congress to enact laws that favor them? Is it just a way to convince Americans that regulation is bad because the 1% doesn’t want their ever increasing profits to be reduced one whit by fair wages sharing productivity with workers, or regulation that would protect the natural beauty of this great country while providing for a more sustainable economy?
Porter suggests a new book as a worthwhile reference on the topic: How Big Should Our Government Be?, by Jon Bakija, Lane Kenworthy, Peter Lindert, and Jeff Madrick. The authors, he notes, make clear the value of government and suggest that there are four important tasks for government facing us now.
“A national instinct that small government is always better than large government is grounded not in facts but rather in ideology and politics,” they write. The evidence throughout the history of modern capitalism “shows that more government can lead to greater security, enhanced opportunity and a fairer sharing of national wealth.”
“The scholars laid out four important tasks: improving the economy’s productivity, bolstering workers’ economic security, investing in education to close the opportunity deficit of low-income families, and ensuring that Middle America reaps a larger share of the spoils of growth.”
The article includes a good graphic, available here, showing the importance of government to quality of life. Countries that have increased tax revenues as a percentage of GDP have achieved better GDP growth than the United States, which has enacted numerous tax cuts and kept government extraordinarily small (and also less innovative). As the blurb for the graphic says,
“Despite arguments that Big Government hinders economic activity, many countries where government has grown the most have also experienced stronger economic growth. Governments have grown across most industrialized nations — raising more taxes over time to offer more public services. In the United States, by contrast, the government remains virtually as small as it was 50 years ago.”
Readers will want to look at the graphs accompanying the Porter article, available here, showing GDP growth versus tax revenue as a share of GDP from 1960 to 2013, and the change in tax revenue as a share of GDP from 1965 to 2014 for most OECD countries. (I was unable to reproduce them here, though the black point in the left graph below is the United States, and the thick black line in the right graph below is the United States.) These figures clearly show that the economic growth that the right claims to want to produce is in fact highly correlated with more government spending and higher taxes as a percent of GDP. Of course we want the taxes to be reasonable and the spending to be the right kind–public infrastructure and human capital, basic research that supports biomedical, technical and other innovations, etc. But blanket statements that smaller government is always better, that private enterprise always does things better than government, or that ordinary Americans are better served by “getting rid of” regulations developed to protect people and our environment–those kinds of ideological dogmas are simply ungrounded in fact.
I think it was Grover Norquist who first proposed drowning government in a bathtub. One of the obvious ways government helps the economy and, by extension, American workers, is by creating demand for work that the private sector does not provide.
This hated for Government has been decades in the making. Read the “Powell Memo” for the start of the Official campaign to subude/convert Government to and for Business’s purposes.
the Think Tanks were created by rich white Men to brainwash the American public on how bad “Government” along with a general undercurrent of poor whites mistreat by Government as a meme through the American experience.
with such fertile soil, the hatred towards Government, and Society as an aftereffect is why the destruction of Government succeeded by those Demagogues like Thatcher and St. Reagan. Being an actor was the perfect “training” for St.Reagan to sell us out to the Rich/Business. True Fascism= Business/Government Monster.
Just like the “Better Dead than Red” propaganda that started after WWII, Americans have been bombarded with the “right memes” for decades. and nowadays with 6 Corporations “feeding” us the so-called news they want us to hear, how could be feel or know otherwise than what we are told. like good “children”. lol
Read Joe Bageant’s “Deer Hunting with Jesus” to get a clue of how successful the brainwashing of these Right wing think tanks are. of course, the Left could have done something like that, but the Left is like Will Rogers’ Democratic Party/ aka “trying to herd a bunch of cats”.
the efforts of the Right to limit voting, create a “boogie Monster of the Left”, and fund the dissolution of the Middle class have given us what we now call as “Globalism/ Austerity for the Poor/Everything for the Elites. Neoliberalism, in other words. and both sides of the Political Party, aka RNC/DNC are spokesmen for the Elites now.
used to be there were complaints about Congress and Pork Barrel projects, like the Bridge to Nowhere in Alaska. Now Congress is Owned, Directed and Certified by the Elites. that’s we got Citizens United and unlimited Robber Baron Rule.
this Powell Memo was the result of the turmoil of the 60’s. Just read the Memo. it explains it in much better detail and refutes any denial otherwise.
Since Money talks, Globalism/Neoliberalism will have to come crashing down, as we see in the banking system today, before anything really changes. the TINA, There is No Alternative is Austerity’s reply.
to expect any kind of changer otherwise in today’s world is to look for gold in a silver mine.
Propaganda works. just like it did in the Weimar Republic. Or America today
And when those workers receive a paycheck for rebuilding America they are more able to spend on the product of private industry thereby helping to grow the American economic pie yet a bit larger.
Well that settles it, if we want a per capita GDP on par with that of France, we will have to drastically raise our tax revenue as a share of GDP.
Spain or bust?
I’m a bit confused by those side-by-side charts at the end. You have four countries compared to the US — France, Sweden, Canada, and Australia. All have increased their tax revenue (as a percent of GDP). Some have done so significantly.
But only France has a significantly better GDP growth rate since 1960. Sweden’s is marginally better, while Canada and Australia lag.
Meanwhile, they are all still behind the U.S.
In 2010, the OECD reprts that the U.S had a median disposable income of $29,100. Canada, $27,700. Australia, $27,000. Sweden, $24,300. France, $23,300. And for the OECD as a whole, $20,400.
That does not sound like a glowing endorsement of more government spending.
Linda, I am with you. I am not an intellectual just an old white guy who believes that beginning with Reagan the right has convinced white working Americans that their real enemy is people of color not the capitalists who have exploited them and refused to pay their share of the costs to support the country that has allowed them to get so rich. A secondary theme is that young white men when I was a young white man thought that women should be happy to bestow sexual favors on them. Obviously LGBT people screwed that up, women being the breadwinners screwed that up, no meaning no screwed that up, etc. So who screwed it up? Politically correct liberals that who. So racism and sexism has allowed the rich to oppress the masses. Of course the lunatics on the left have not helped eithet
“But blanket statements that smaller government is always better, that private enterprise always does things better than government, or that ordinary Americans are better served by “getting rid of” regulations developed to protect people and our environment–those kinds of ideological dogmas are simply ungrounded in fact.”
To me this is a self-evident truth, but I’d have to do a year of research to prove it.
Health care coverage is a shining example of “Private Enterprise” being far worse, and that’s an easy one to document.
Military spending is totally out of control, for it too has been “privatized”. The Revolving Door permits industry people to go to government positions for a while, arrange a USS Ford or an F-35, then go back to reap the rewards. Bribing Congress doesn’t hurt either.
And then there are the Bankers. A family adjoining my place was literally destroyed when their home was stolen during that crisis. Government regulation was totally removed, and one of the largest crimes in US history happened. Keeping the nation from shattering is a large reason the US debt is now in the trillions. Again, a corrupt Congress was largely responsible.
You attack a symptom rather than a cause. Insurance is not the problem, banks were given power long before 2008, and the military did not suck up funding by itself.
I don’t know how to do that “reply” format you used, so here is the standard box way.
I have no idea when the banks had their regulations zapped, only that after it happened the crisis wiped out a way of life when it hit. The old regs need to be reinstated – pronto.
I don’t understand your remark about the military. My claim is that all the services are getting way too much money, and a huge proportion is wasted. As in going into Big Weaponry pockets without anything to show for defending the nation.
Insurance isn’t the problem? That’s news to me. An expensive middleman who makes even more money by denying care has always seemed to be the ‘biggie’ to me. If insurance middlemen aren’t the problem with the world’s most expensive medical care yielding at-best middling results, kindly tell me what is?
Banks: Then how can you make the statements you made? I would think you might know some of the detail.
Military: So whose fault is this issue?
Insurance: By Law 15 and 20% are allowed for administrative and profit. Medicare does not put much effort into tracking fraud the same as commercial, hence higher costs. By law care can not be denied based upon prior incidents. Healthcare insurance is not healthcare. Again study the issue or pull up some of mine or Maggie Mahar’s posts on healthcare and healthcare insurance. Your attack on the poster child (insurance) for the rising cost of healthcare is superficial.
“[The] military did not suck up funding by itself.”
Since 1960, the military has gone from just under 50% of U.S. government spending to under 20%. Meanwhile, social welfare programs have gone from under 20% to about 50%.
“Health care coverage is a shining example of ‘Private Enterprise’ being far worse, and that’s an easy one to document.”
My mom used to pay out-of-pocket for private doctors, rather than taking us to Navy doctors. Our neighbor had surgery performed on the wrong leg by a Navy doctor. He could not sue.
VA patients wait months for an appointment.
This is the level of care you want everyone to have?
You were probably going to base doctors and not the VA.
You wait months for visitation to commercial healthcare. EOM July I am told my PCD is taking appointments in September. VA can not exceed 30 days and my VA sticks to it. I do not need to see him and he is drumming up business. University of Michigan increased co-pays and claimed Medicare did it. Not really, Medicare still pays 80%. U of M just wanted more money from established patients and created a new tier for new patients. Commercial healthcare is far more expensive than Medicare, Medicaid and VA care.
Finally, if you think the VA has issues then I invite you to pull up Public Citizen and malpractice. http://www.citizen.org/congress/article_redirect.cfm?ID=9125 and here: https://www.google.com/?gws_rd=ssl#q=public+citizen+medical+malpractice The VA is under a higher level of scrutiny than the commercial healthcare system.
Your comment is anecdotal. Do not take this as an opportunity to post a bunch of comments in this thread either. Nest them or I will delete the extras.
I never saw anyone who could be so wrong about so many things enjoy throwing out trite little half truths and thinking they are gems.
No reason to talk to people this obtuse.
“Your attack on the poster child (insurance) for the rising cost of healthcare is superficial.”
In light of what you say here, what is your position on Single Payer?
I will tell you the same as I tell most people single payer is BS in the manner in which they believe. It is not a magic bullet. Most countries are two tiered public and private. Then too, insurance is not the issue. Think about it. Insurance is only the symptom.
I didn’t ask about “most people”, but rather for your opinion. I assumed you’d understand that “two tiered”, “private”, and “insurance mandate” systems weren’t part of the query. (2014 mortality, 2011 cost)
I made a quick lookup of plans with easily found data. The date is when the plan began, the second number is infant mortality, the third is life expectancy, and the last one is the cost per capita.
Norway 1912 2.48 81.6 $5,669
Japan 1938 2,13 84.5 $3,213
UK 1948 4.44 80.4 $3,405
Sweden 1955 2.6 81.9 $3,925
Italy 1978 3.31 82.0 $3,012
US ———— 6.17 79.6 $8,508
It seems to me that the single payer nations have fewer of their babies dying, they live longer, and pay a LOT less than the US.
Now back to that question of mine….
Sweden is a two tiered healthcare nation. Sweden doe not pay 100% of healthcare and insurance does exist there.
Japan is also a two tiered nation for healthcare
Norway is also two tiered.
UK is socialized medicine. Everyone works for the Gov.
Italy is a two tiered system