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A Taxing Argument
Republicans think they'll revive their party by repeating the refrain of "small government, lower taxes." Unfortunately for them, taxation isn't quite the problem they imagine it to be.
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Over the last few months, progressives have had a lot of fun ridiculing the right. New media stars like Glenn Beck and Rep. Michele Bachman of Minnesota bring before the public a spectacle of idiocy and craziness that is truly wondrous to behold. Then there are the conservatives who believe that when one of the last moderates you have defects to the other party, it's good news demonstrating that you're poised for a comeback. But wade through the silliness, and you find an important national debate going on about the fundamentals of politics and the role of taxation: what obligations the government owes to its citizens, where the limits of power lie, and how much a responsibility we each have for the common welfare.

Republican tacticians are struggling to claw their way back to relevance, and their strategies can be summarized in two competing positions: move to the center to win over moderate voters or double down on conservative principles. Many Republicans believe that if they just keep talking about reducing taxes and cutting the size of government, they'll find themselves back on top. To which progressives should respond, please do! Because three months into what could well turn out to be a transformative presidency, the public seems unmoved by the cries of "socialism" and the invitations to wave tea bags about.

It may just be that Americans are again realizing that not only do we need and want government (try to find a free-market solution to a flu pandemic), we actually pay pretty low taxes. And while we could be getting a lot more from our government, what we get isn't too shabby.

The tea-baggers' desperate cries notwithstanding, we have some of the lowest tax rates in the developed world. According to the Organization for Economic Cooperation and Development, the U.S. ranks 26th out of 30 developed countries in the amount of taxes its citizens pay as a proportion of gross domestic product:


(Credit: The Organization for Economic Cooperation and Development)

While the right warns that President Barack Obama's plan to raise the top income-tax rate from 35 percent to 39.6 percent would be a socialist transformation of our society, the top rate in most other developed countries is considerably higher. And just like all of our friends on that list, we get what we pay for. People in places like Denmark or Sweden pay a lot more in taxes than we do, but they're not just flushing that money down the toilet -- their high rates mean they don't have to pay for a lot of things that we do, like health insurance, preschool, and college.

We could examine each of these programs individually and argue about whether government should or shouldn't be paying for them. We might come up with different answers in each case. And we should keep arguing about these questions -- the debate over appropriate taxation is at the heart of the ideologies that compete for Americans' loyalty. But what makes no sense is to assume that government provision of a service is problematic before you even take a look at how it works.

Yet this is what so many conservatives do. For instance, they believe that paying taxes to government, and getting health coverage in return, is somehow more "oppressive" than paying money to an insurance company … and getting health coverage in return. Health insurance is just one example, but the point is that the potentially oppressive aspects of government spending are in the details. When we design policies, we can decide what they will look like and how burdensome they'll be. Coming up with the best policies requires one to offer more than the simple argument "Government is bad."

I'm hardly the first person to notice that when Republicans were in charge, criticism of government actions was commonly met with, "Why do you hate America?" But now that Democrats are running things, we're supposed to believe that any real patriot hates his or her government and, naturally, thinks taxes are too high. Not long ago, the Prospect's own Robert Reich demolished some of the most common tax myths and offered this illustrative story:

An acquaintance from law school, now a partner in one of Washington's biggest and wealthiest law firms, explained to me one day over lunch how he and his partners use tax rules to create offsetting taxable gains and losses, and then allocate the gains to the firm's foreign partners who don't pay taxes in the United States. That way, they keep the losses here and shelter their income abroad. I noticed he had an American flag lapel pin. "You're supporting our troops," I said, referring to his pin. "Yup," he replied, entirely missing my point.

As Reich's acquaintance failed to grasp, paying taxes is patriotic. And not just because of the direct benefits each of us get from the government, such as Social Security, cross-country highways, or police protection. When you pay taxes, you contribute to the well-being of your fellow citizens, and even other people around the world.

Let's take the example of just one federal agency. You are reading this article thanks to the magic of the Internet, which wasn't available to the public two decades ago. Like lots of other good things, the Internet was created by the United States government, more specifically by the Defense Advanced Projects Research Agency. DARPA's purpose is to develop technologies that at their inception sound almost absurdly like science fiction. For instance, it has a program that may one day result in a real live version of Wolverine from X-Men. DARPA is also developing a medical material called Fracture Putty and working on something called Mathematical Time Reversal (so classified it has no link -- let your imagination go with that one). DARPA runs the Programmable Matter program, which means to create "a new functional form of matter, based on mesoscale particles, which can reversibly assemble into complex 3D objects upon external command." It also has a whole bunch of different programs seemingly aimed at creating super-soldiers (this is an agency within the Defense Department, after all) and dozens of other programs which sound ridiculously, awesomely cool. While most of them will probably come to nothing, chances are there's another Internet in there somewhere, a technology that will radically transform human existence for the better. (We should also acknowledge that if our machines ever decide, Terminator-style, to revolt and exterminate all of humanity, it'll probably be DARPA's fault.)

Last month, 60 Minutes did a story on a DARPA-funded program to create the next generation of artificial limbs, which will act more like real ones than any other artificial limbs ever have. Obviously, we have an acute need for that technology at the moment, given how many Iraq and Afghanistan veterans have left limbs on the battlefield. When asked about the effort's $100 million price tag, Col. Geoffrey Ling, the neurologist who runs the program, said, "It's a huge number. But it does a number of things. Number one is, of course, it fulfills our commitment to these fine young men and women [for whom] the issue of money compared to what they have done for the service of the nation becomes immaterial. However, this is not a classified, military weapons system. This is an advancement in medical technology. And the beauty of this particular effort is that this is another gift of the American taxpayer to the entire world."

All of us can find things in the federal budget we wish the government weren't funding. But there are also things that only the American government has both the resources and the will to do. You're paying for those new artificial limbs for men and women who put their life at risk in Iraq, just like you paid to create the Internet. You're paying to support the retirement and health care of American seniors, and you paid to put a man on the moon. You pay for food inspectors to make sure kids don't die of e. coli poisoning, you pay for highways and bridges, you pay to train doctors, and you pay to give education grants so kids from low-income families can go to college. You don't have to enjoy paying taxes. But it ought to make you proud to be an American. Think about that the next time someone says he wants to get government off your back.

Paul  WaldmanPaul Waldman is a senior correspondent for the Prospect and the author of Being Right is Not Enough: What Progressives Must Learn From Conservative Success.
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