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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

William Voegeli on Ryanism



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William Voegeli, author of the superb Never Enough, has written a thought-provoking essay on the larger ideological implications of Ryanism. His core point is that Ryanism calls on the U.S. center-left to acknowledge the cost of its policy ambitions. In one particularly illuminating passage, Voegeli illustrates the intellectual challenges facing the U.S. center-left by contrasting it against the European center-left:

In Europe’s social democracies, leftists have addressed that problem by offering a package deal: “The welfare state we want to build will have to be extensive and expensive to address our serious social needs. It will be so expensive, in fact, that we cannot possibly finance it without taxes that impose real sacrifices on most of our citizens, not just the wealthy. A robust, well-funded welfare state will do so much to improve the quality of life that our citizens would be demonstrably worse off with the higher take-home pay they would enjoy as a result of combining a big tax cut with proportionate reductions in social-welfare programs.”

And that’s pretty much how the Left governs. In Sweden, for example, the world’s most comprehensive welfare state, the most affluent tenth of the income distribution pay 26.7 percent of all taxes. This is virtually identical to their percentage of “all market income,” which is 26.6 percent. (See “Growing Unequal,” a report by the Organisation for Economic Co-operation and Development.) In the United States, by contrast, those in the top tenth pay a portion of all taxes, 45.1 percent, that is a third larger than the portion, 33.5 percent, of the total income they receive. Other famously generous welfare states, such as France, Germany, and Denmark, resemble Sweden, having tax systems far less progressive than America’s.

Why? Because America’s party of the Left must contend with our Don’t Tread on Me Jeffersonianism. To reassure voters more likely than Europe’s to fear ambitious government, the Democrats offer a different package deal: “We’ll build a welfare state that gives things to you, does things for you, and — best of all — someone other than you, someone richer than you, will pay for it.” Thus, Barack Obama promised (as did Hillary Clinton, his 2008 Democratic rival) to expand old social programs and launch new ones without raising any federal tax on any family with an income below $250,000. Having met the easy political challenge, persuading voters to accept government largesse, Democrats have voted “Present” when confronted with the hard part, persuading voters to pay for that largesse. The hard part, however, determines the fiscal feasibility of the easy part.

One of the reasons I like Voegeli’s analysis is that it also clarifies challenges for the political right. As Voegeli explains, Ryan aims to keep tax revenues between 18 and 19 percent of GDP, its average level since the Second World War. Keeping federal public expenditures at roughly 20 percent of GDP, which is to say almost but not quite in balance with revenues, requires steep reductions to the growth of Medicaid expenditures and discretionary spending, even if we assume that Medicare premium support is a success. These reductions are steep enough that it is easy to imagine voters preferring a somewhat higher tax take of GDP over the kind of changes in Medicaid and other popular programs that might be necessary.

So Ryan isn’t just asking the center-left to “put up or shut up.” He is also explaining roughly what it will take to keep tax revenues at their postwar norms — and it might be enough to make voters balk. The problem, however, is convincing voters that if the tax take must go up, limiting tax increases to the top 2 percent of households won’t do. This is why, not surprisingly, I find the conventional center-left discourse on taxes so corrosive: my impression leading Democratic politicians have tried to convince voters, explicitly and implicitly, that raising taxes on millionaires is enough to keep federal spending on roughly its present trajectory. This, as a number of our center-left interlocutors have acknowledged, is highly misleading, and it undermines the seriousness of the case for affirmative government. 



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