We don’t need more justification for raising taxes. The reasons for doing so–not least of which are the needs of infrastructures upon which survival depend–have been evident for some time here. “What’s been missing all along is the political will to do so,” you might expect me to write next But it’s better to say that we’ve had too much political will insisting on this, that and everything else.
–For my part what’s missing are compelling details for (re-)allocating resources to and in public sector, including but not limited to tax revenues.
Political historian, F.S. Oliver, pointed out what was evident ages ago: “One of the discomforts of living in a progressive society is that new fiscal methods are constantly required in order to cover the rising expenditure. . .What weigh most, however, with Treasury officials, when they are seeking to balance a budget, are not so much considerations of abstract justice, as the knowledge that old sources [of tax revenue] will dry up if an attempt is made to draw too much from them.”
To adapt his point, what is missing are scenarios sufficiently granular to differentiate among fiscal instruments for shifting government expenditures across old and new budget categories. The aim of these (re)allocative mechanisms would be to ensure the productivity of infrastructures vital for both economic growth and human well-being. Without reliable market infrastructure, there wouldn’t be markets; so too for other infrastructures and the economic activities that depend upon them.
–To reiterate, the fiscal instruments necessary (sufficient?) for productive infrastructures will include, but are clearly not limited to, mechanisms for raising tax revenues.
Or to put the case from another direction, one key mechanism must be reducing illegal tax evasion and “legal” tax havens–a huge national and global issue though typically under-acknowledged or misunderstood. Contrary to public choice theory, such tax avoidance on your part is not free-riding on those of us who do pay taxes. Rather, the point remains that of Colin Strang, the philosopher, who long ago demonstrated that the real defect lies with those whose institutional—read infrastructural—duty is to prevent tax evasion of all sorts.
In other words, be on the look-out for how effective reducing ongoing tax avoidance is for the same governments wanting to raise taxes because of COVID-19 impacts. The capacity to implement one has something to do with the other, right?
Oliver, F.S. (1930, 1931, 1935). The Endless Adventure. 3 Vols., Macmillan and Company: London
Strang, C. (1970). “What if Everyone Did That?” in Baruch Brody (ed.), Moral Rules and Particular Consequences, Prentice-Hall: Englewood Cliffs, NJ