distributional effects

In my previous post, I rather disparagingly wrote that "we want arguments with substance, but there are several reasons why we don't get them.  The first and most obvious is the increasing technicality of the problems."  I say disparagingly because clearly implied in the statement is the idea that most Americans would not understand even if the issue was engaged broadly.  A recent example played briefly on the news.  It was reported that the Tax Policy Center had just published a report that examined the Romney tax proposals and found that they favored those in the upper income brackets, and actually increased taxes for those in the middle and lower brackets.  The paper itself, entitled "The Distributional Effects of Base-Broadening Income Tax Reform," is quite technical, as one might imagine, it draws the following conclusion:  "This paper examines the tradeoffs among three competing goals that are inherent in a revenue- neutral income tax reform—maintaining tax revenues, ensuring a progressive tax system, and lowering marginal tax rates—drawing on the example of the tax policies advanced in presidential candidate Mitt Romney’s tax plan. Our major conclusion is that any revenue-neutral individual income tax change that incorporates the features Governor Romney has proposed would provide large tax cuts to high-income households, and increase the tax burdens on middle- and/or lower- income taxpayers."  


I will let those that are interested read the actual report (it can be found at www.taxpolicycenter.org) but I strongly suspect that those reporting on the report didn't actually read it.  Even had they read it, one suspects, they would not have been fully competent to examine with any sense of confidence the technical details of the report, and though I have read the report through, I have to say with some humility that I am not prepared to argue against the way in which the authors of the report -- Brown, Gale and Looney -- came to their major conclusion.  I do, however, understand the conclusion itself clearly enough, and one would suspect that it is bad news for Mr. Romney.  It plays rather directly into the principle stand of the Democrats -- that the Republicans, and American economic conservatism generally tend to play into the hands of the rich at the expense of those in the middle and lower ends of the income distribution.  Rather predictably the news media noted the report, noted that it played into Mr. Obama's hand, and out of fairness solicited comment from the Republicans.  Again, rather predictably, the Republicans questioned, not the report itself, but the bias of its authors and of the Tax Policy Center.  Within the Aristotelian schema, when confronted with a disconfirming and discomforting argument, one can attack the argument itself, its inherent consistency and accuracy, or one can attack the credibility of those advancing the argument.  By any measure, the latter is the easier course, and the road most traveled, but it really does nothing to advance "government by discussion," and it certainly won't lead to pragmatic solutions to on-going problems.  It does a good deal to deepen the predisposition divide.  Those predisposed to support Mr. Obama will credit the report, those predisposed to support Mitt Romney will chalk it up as another example of liberal bias, and we are no further down the road to a tax policy that makes sense for the problems confronting the American people today.  


Lest I be misinterpreted, and I am often misinterpreted, I am not advancing the sort of argument that would turn government over to technocrats.  To assume that the problems facing the American people are simply or only technical is to engage in utopian thinking, and the difficulty with utopian thinking, with any utopian thinking, is to assume that the solution to this problem, this particular problem, is the solution to all problems.  The particular problem will always exist in a context that is, as I have been suggesting all along, political and ultimately moral.  The argument advanced by the Tax Policy Center above, for example, was really an intellectual exercise, a thought experiment of sorts, because why would we assume "revenue neutrality" as a desirable goal in tax policy.  One could have tax cuts across the board, and the resulting loss of revenue would be acceptable because, ultimately, the intent is to reduce the size and scope of government.  If we reduce medicare, eliminate medicaid, privatize social security, abolish the department of education, and so on, there will be plenty of money left to sustain the department of defense.  The efficacy of dismantling the federal government in favor of state or private interests is one thing, the desirability of doing so another, and both are political decisions.  The effects of doing so will not be felt equally by all.  Some will benefit more than others, and ultimately politics and the resulting government are all about the distributional effects of policy.