How low should taxes go? A reply to Bill Voegeli

Last week I posed a question: What level of taxation do conservatives consider appropriate? I'm not sure that I expected much of an answer, but I got one from William Voegeli, whose book "Never Enough: America's Limitless Welfare State" I referenced in posing the question. It was a thoughtful and civil reply, and though Dr. Voegeli and I have philosphical/instinctive differences, I'm grateful he took the time to craft such a response.

In composing my own reply, I wrestle with a few issues. A) Much of Voegeli's reply occupies itself not so much with the question I posed, but with restating the argument from his book--that overreaching advocates of the welfare state in the United States have created and continually seek to create institutions that have grown unsustainably large. I'm not going to spend much time defending liberals in this post (there are several portions of Voegeli's post that seem to deserve their own replies) because I'm still principally concerned with the question of how much conservatives are willing to pay to sustain the government they do envision. B) When he does settle on an answer, it is so broadly reasonable that I (and, I think, most liberals) couldn't quarrel with it. But C) the daylight between Voegeli's conservative response and the actions of America's conservative party is broad enough that a response purely on Voegeli's points seems to omit a lot of real-world ramifications. We're going to have to talk about Paul Ryan here.

Enough throat-clearing. Let's take a look at a couple of key points in Voegeli's response.

My answer is that one way to describe the difference between liberals and conservatives is that liberals want government spending to be the independent variable that determines tax levels, and conservatives want government spending to be the dependent variable determined by taxes.

I think this is an oversimplication. A slightly different way of putting it, I think, would be this: Liberals want taxes to be determined by what they want government to do. Conservatives want taxes to be determined both by what they want government to do and what they want it not to do. (There is, after all, a whole discussion to be had about what the tax level would look like if we had a much, much smaller defense establishment.) That's still an oversimplication--and one that's very charitable to conservatives, as we shall see.

I'm not entirely comfortable with his "liberals want/conservatives want" framework, though, because it is so oversimplified. Put another way: Voegeli's half-right. He and his fellow conservatives want to determine the size of the government and the welfare state, lock it in, and throw away the key. But I don't think it's the case that liberals want to build their utopia now and then figure out how to pay for it. To me, there's plenty of evidence that liberals try to balance goals and resources; the welfare state we expect and hope to build in the United States is not the welfare state we would expect and hope to build in, say, The Solomon Islands. That's a bug to conservatives, I suppose—Voegeli: "One of the reasons to like a growing economy should be that it makes a smaller welfare state possible, rather than because it makes a bigger one possible."—but not to me. A richer society is more capable of providing a safety net; I'm OK with the idea that that increased capability creates something of an increased--though not unlimited--obligation to do so.

But hey: Suppose we were all in agreement about the size of government and the welfare state? That still requires an answer to my question: What level of taxation do conservatives think is the right level of taxation? The conservative answer in our politics always seems to be "a little bit less." Voegeli, bless him, sounds slightly more reasonable.

So, Mathis asks, how high should do (sic) conservatives want our taxes to be? High enough to pay for the things the government needs to do. Which are those? In a democracy, all the things the people feel the government really ought to do. I'm happy to abide by the outcome of the democratic debate over that question, but I think it should be conducted honestly. Honesty requires stipulating that the amount of government we get is no larger than the amount we're willing to pay for, as opposed to the dream-world welfare state we would build if wealth were limitless.

See? I don't think I can argue with a single point in that paragraph. I really can't. We should only build what we can sustain. Let's shut 'er down and go home--after all, not even Paul Krugman thinks we should consign ourselves to a future of ever-larger debts!

So maybe my argument here isn't with Voegeli. Maybe it's with the Republican Party instead. Because it seems to me that over the last generation, welfare-state-loving Democrats have always tried to find the resources to finance their additions to the welfare state--that is, to pay for the things they believed government should do. And Republicans haven't.

Just to cite the two most-obvious examples: Much of the effort in building and passing the Affordable Care Act--known, sneeringly, in some quarters as "ObamaCare"--went into making sure that the act is deficit-neutral during the first 10 years of its life. You can argue that there was some trickiness involved, or that the 10-year-shelf-life of the deficit neutrality is too short a window. Fine. But Democrats actually tried to expand the welfare state without reaching for the national credit card first.

Republicans? Well, back in 2003, A Republican Congress passed the Medicare drug benefit. The law was signed by a Republican president. It reportedly added up to $1.2 trillion to the deficit over a decade. And Republicans couldn't come up with one dime to cover the costs. If there's been a disparity between the willingness to grow the welfare state and the willingness to pay for it, I'd argue that disparity can be found primarily in the actions of America's conservative party.

And we're not even mentioning the unfunded wars of the last decade.

I hear the objections: George W. Bush wasn't a "real" conservative. The Republican Party has learned its lesson. The Tea Party will hold this generation of Republicans accountable.

Enter Paul Ryan. The Republican congressman has introduced one of the more radical budget proposals ever seen. It commands near-unanimous support from the Republican Party in Congress, and to criticize it on the right is conservative apostasy. It is the "rightward pole" in the budget debate.

So what does it actually do? Well it reins in domestic and entitlement spending, reducing the anticipated costs of Medicare, Medicaid, and discretionary spending by more than $2 trillion over the next decade. Presumably, this is what America's conservative party sees as a "right-sized" federal budget—or, at least the closest thing to right-sized that Republicans think entitlement-loving voters will accept.

So. What level of taxation is appropriate to sustain Ryan's budget vision? Well, uh...a little bit less.

It cuts the corporate tax rate to 25 percent. It lowers the marginal tax rate for top incomes from 35 percent to 25 percent. (This at a time when both the rates and the actual taxes collected are really, really low.) And so on. The result? Washington Post columnist Matt Miller gives us the overview:

“The spending spree is over,” Ryan said the other day, after the House passed his blueprint. “We cannot keep spending money we don’t have.” Except that by his own reckoning Ryan is planning to spend $6 trillion we don’t have in the next decade alone.

“We have too many people worried about the next election and not worried about the next generation,” Ryan added. So Ryan is expressing his concern by adding at least $14 trillion to the debt between now and when his plan finally balances the budget sometime in the 2030s (and only then if a number of the plan’s dubious assumptions come to pass).

In other words, America's conservative party has set out its plan for balancing government goals and resources, and it still can't bring itself to pay the bill.* But it can cut taxes. It can always cut taxes.

*President Obama's budget proposal doesn't do any better over the long term, admittedly. Tee up on that if you like. But my purpose here is to determine how conservatives are willing to act.

Now, this isn't William Voegeli's fault. I don't know if he supports Paul Ryan's plan or not, and I'm not inclined to hold him rhetorically responsible. (No more than I'm willing to defend LBJ's 40-year-old comments about "reducing boredom" that Voegeli cites in his reply.) But the "conservative" plan supported by the conservative establishment seems to me a betrayal of the core principle that Voegeli espouses, which is that our leaders should honestly stipulate "that the amount of government we get is no larger than the amount we're willing to pay."

Do Democrats want to strengthen the safety net? Sure. But their efforts in the last generation, while imperfect, have sought to balance goals and resources. Republicans haven't even offered that much. Voegeli, in his book, suggests that Democrats and Republicans can come to a grand bargain on financing the welfare state if Democrats agree to limits on the size of that state. It seems to me, though, that if Republicans take his advice they must also agree to some level of financial support for that state—and right now, that goal appears impossible. What's the right level of taxation for Republicans? A little less, always and forever.