We don’t need more justification for raising taxes. The reasons have been evident for some time. You might expect me to follow on with, “What’s been missing all along is the political will to do so.” No, it’s better to say that we’ve had too much political will insisting this, that and everything else.
–For me, the call for more political will stops well short of the details for (re-)allocating resources–in our case, new tax revenues. Political historian, F.S. Oliver, pointed out the crux decades 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 the point, what is missing are scenarios granular enought to differentiate among fiscal instruments for shifting government expenditures across old and new budget categories.
–One under-acknowledged mechanism for new revenues and reallocation is reductions in tax evasion and use of tax havens. Contrary to public choice theory, this tax avoidance is not free-riding on those of us who pay taxes. The defect lies with those whose institutional duty is to prevent tax evasion.
Principal sources
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
WHEN COMPLEX IS AS SIMPLE AS IT GETS 