Wednesday, October 27, 2010

Twisted Logic on Taxes

I always read Boston Globe columnist Jeff Jacoby because he usually writes effectively and makes the best possible case for his conservative positions. A couple of times each year, I actually agree with him. Last Sunday was not one of those times, nor did his article on halving the state income tax rise to his usual rhetorical level. If Jacoby cannot make the case, the case is not to be made.

First, he resorts to an ad hominem attack on the opponents of Proposition 3, which would reduce the state sales tax from 6.25% to 3%. The fact that the state's teachers, firefighters, and police officers are among those oppose the rollback is not -- in and of itself -- a reason to be for it. In fact, these are the people who best understand what is at stake, as they have seen local aid from the state cut to the proverbial bone in recent years. Further cuts to local aid amount to millions of dollars for most communities (see map).

From this classic logical fallacy, Jacoby moves on to a number of other errors. Drawing on several mythical analogies and metaphors, he claims that previous predictions about the damaging affects of tax cuts have not come true. False are the claims, he says, that cuts will lead to "ravaging police and fire departments, throwing the sick and poor into the street, and reducing public infrastructure to rubble." Of course, we are facing all of these as a result of Proposition 2-1/2 and the Romney-Swift cuts, but the last of them really caught my attention. If he does not believe the public infrastructure is crumbling, he has has been very selective in his automobile driving of late, and he certainly has not been in the parking garage under UMass-Boston in the past decade!

Even more problematic is Jacoby's division of the populace into "taxpayers" and "tax-eaters." I am both, and so is he. We all pay taxes precisely because we all benefit from public services.Even those services we do not "eat" directly, such as the education of the next-door neighbor's kid or the treatment of the addict around the corner, benefit us all. In Jacoby's view, the only beneficiaries of public expenditures are public employees. This is one aspect of an increasingly popular libertarian fantasy that places unwaivering faith in the superiority of the private sector.

Jacoby compounds the error by arguing that tough times require that the public sector cut back its spending. In fact, the tough times we currently face are the result of unregulated private-sector shenanigans that increase, not decrease, the need for public spending. Even if one doubts -- contrary to all available evidence -- that counter-cyclical, Keynesian spending carried the United States from the Great Depression well into the post-war boom, it is quite simply the case that recessions create greater demand for important services that the private sector does not adequately provide to unemployed people. Libraries, for example, are highly counter-cyclical, as people who never visit during economic good times find them a very useful place for enrichment, entertainment, and job-hunting tools during downturns.

Jacoby attempts a serious slight-of-hand when he asserts that Massachusetts has "one of the highest sales-tax rates in the country." He must know that this is not an apples-apples comparison. As his own paper has reported, "taxachusetts" is a myth, with the Bay State placing right in the middle of states when all taxes are considered. Not only does Jacoby choose not to consider other major tax categories, such as the Bay State's low income tax, he does not even represent the sales tax fairly. Even if he is correct that the rate is high, he should mention that sales tax is not collected on food or clothing. The former exemption is fairly common, but I know of only one other state that exempts clothing. After 13 years here, I am still surprised when I buy a pair of shoes or a jacket, and pay exactly what is on the label -- getting a penny back, rather than paying a couple of bucks in taxes. 

So Jacoby should be honest: Proposition 3 is about slashing public support for public education and other needs, in order to save a few pennies on the dollar on non-food (except restaurants), non-clothing purchases. The last point in his article is that this is needed to "send a message" to Beacon Hill about wasteful practices, such as the near-fraudulent games that have been played with pensions over the years. Some of those practices have already been curtailed; to eliminate the rest, advocates should write a proposition that identifies them and eliminates them. That would be a proposition -- an honest proposition -- worthy of support.

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