Emphasis Added

Sunday, December 08, 2002

Double Trouble

I�ve been hearing the term �double taxation� a lot lately as the business punditocracy is trying to figure out how to solve the current economic crisis without imposing any additional burden on the wealthy. Many are pushing for a repeal of the tax on corporate dividends because this is a �double tax� � e.g., the money was taxed once as corporate profits, then again when it is distributed to shareholders. The estate tax is a �double tax� because the money in the estate was already taxed when it was earned, then is taxed again when it is distributed to the heirs. This argument is supposed to suggest that it is illegitimate to tax dollars more than once, even when the so-called double taxes in question happen to hit only the very top of the income brackets.

I don�t understand why this makes any difference. Everyone pays double taxes all the time. My income is taxed once when I�m paid, then again by a sales tax when I spend it. The money I used to buy my condo would have been tax-free (except for the interest) if I�d left it in the bank, but because I spent it on real estate, I have to pay property taxes on the full value of my place, including the considerable part that I still owe the mortgage company. I�m sure you could think of dozens of other examples. This seems to me to be just another part of the tax system, no more or less onerous than any of the rest of it.

The only way to avoid double taxation altogether is for the government to tax money at the source: e.g., every time the Fed issues three dollars into the money supply, the government prints a dollar for its own use. Presto! The government ends up with buying power equal to 25% of the money in circulation, every dollar is "taxed" equally by inflation, and we can do away with the entire formal tax system, lock, stock and barrel. Any amateur economists out there want to shoot that one full of holes for me?

3:55:51 PM

Emphasize This! []

Rush to Judgment

Last week in response to a particularly Limbaugh-like blast from one of my commenters, I bemoaned the pathetic signal-to-noise ratio in our current political debate and suggested that high-pitched rhetoric from both sides makes it impossible to reach the kind of consensus necessary to solve our increasingly-complex policy problems. Amy Sullivan offers a similar piece in this week's American Prospect, concluding that "Even Rush Limbaugh should be able to do better than equating political opponents with Satan -- and even his listeners should be able to do better than passing off name-calling as political discourse."

The problem is, I'm not so sure anymore that these people can do better, or would want to if they could. Let's accept for a moment that there may be an attractive element to conservative principles on a theoretical level, and that this theory is worth arguing over. Fine, but the most self-serving and broadly objectionable elements of the conservative program (and those most important to the backers) are in the details. It is no accident that right-wing propaganda so desperately tries to keep the focus on the broadest possible view of the issue: �good vs. evil,� �homeland defense,� �economic freedom,� �tax relief� - while avoiding at all costs a discussion of the practicality of their specific proposals. These details are precisely what would come under scrutiny in a reasoned policy debate using effective, systematic analysis, and would likely meet with little support from the vast majority who do not benefit from them.

Extremists understand that an emotionally-charged atmosphere is more favorable for the outcomes that suit their narrow interests. Consequently, they cloud the air with personal attacks and slurs that distort the positions of their opponents, disparage the very idea of compromise and consensus, and subvert the fundamental elements of rational analysis while perversely suggesting that theirs is the reasoned, logical position. Liberal-minded people (including principled conservatives) who are conditioned to respect the process of deliberation are fooled into taking these kind of pseudo-arguments seriously as contributions to the public dialogue, when in fact they are put forward to deliberately confuse the public about the issues and the proper means of analyzing policy proposals. Arguing with Rush and his ilk is therefore worse than futile � it is playing right into the hands of the enemy.

That�s because the hard-core right-wingers behind this coordinated effort don't want to win the argument - they want to win the war. The result is a kind of two-tiered system where most of society is earnestly engaged in an irrelevant debate over theory while ruthless operatives are busy hacking their way through the underbrush to secure power, privilege and wealth for themselves through the most narrow, self-serving and short-sighted public policies imaginable.

12:03:11 PM

Emphasize This! []