The Agenda

Why Are People Upset About Taxes?

My co-blogger Josh Barro makes an important point regarding growing anti-tax sentiment:

So, what should we make of a poll that says only 2% of self-identified “tea partiers” know the Obama administration cut taxes for most Americans in the current year? One obvious upshot is that they don’t know much about the content of the stimulus package. (Nor do most Americans, for that matter; only 12% of overall respondents said Obama cut taxes for most.)

But another take is that, as with most political issues, the public is operating in a low-information environment, and is reasonably processing the information it has. They see–accurately–that the Obama administration is expanding the government. That costs money, and will be paid for by taxpayers. As it happens, they won’t pay this year (unless they smoke or tan) but they will pay in the future.

And for those of you who’ve spent the last few days scrambling to file your taxes, he adds another important observation.

While Tax Freedom Day falls on April 9 this year, the Tax Foundation also does an alternative calculation, reflecting where it would be if we paid enough taxes to cover government spending in the current year. Unsurprisingly, given the massive federal budget deficit, this date is much later: May 17, reflecting that government spending now consumes 38% of national income.

Chris Hayes of The Nation has made the case that paying taxes can make you happy, pointing to a new study from the University of Oregon. But I’m not sure the study makes much of a case for improving the case for a higher tax take.

A three-member team – a cognitive psychologist and two economists – published its results in the June 15 issue of the journal Science. The scientists gave 19 women participants $100 and then scanned their brains with functional magnetic resonance imaging (fMRI) as they watched their money go to the food bank through mandatory taxation, and as they made choices about whether to give more money voluntarily or keep it for themselves. …

Researchers found that two evolutionarily ancient regions deep in the brain – the caudate nucleus and the nucleus accumbens – fired when subjects saw the charity get the money. The activation was even larger when people gave the money voluntarily, instead of just paying it as taxes. These brain regions are the same ones that fire when basic needs such as food and pleasures (sweets or social contact) are satisfied.

This, of course, is a familiar conservative argument: we derive far greater satisfaction through voluntary giving, which is one reason why many of us advocate a smaller government that can create more room for civil society. This isn’t the last word on the subject, of course. 

The notion that the expansion of the domain of choice is tied to happiness is also part of Second Demographic Transition (SDT) theory, a notion that seeks to explain changing fertility levels in post-industrial economies. And here’s where we enter thorny territory — where are the boundaries between positive and negative freedom, etc. In a paper on “The Unfolding Story of the Second Demographic Transition,” Ron Lesthaeghe, the dean of European demographers, writes:

But there was more behind the idea of the SDT than just these two considerations. Further in the background was the concept of a Maslowian preference drift. Stated succinctly, A. Maslow (and others before him) noticed that greater economic development produced a shift in concerns about material needs (subsistence, shelter, physical and economic security) to non-material needs (freedom of expression, participation and emancipation, self-realization and autonomy, recognition). With such a shift in needs, also a shift in the values structure would occur, with tolerance for diversity and respect for individual choices gradually taking over as prime values from solidarity and social group adherence and cohesion.

In the United States, liberals and conservatives tend to believe that one can slice off the social from the economic. Yet when respect for individual choices takes precedence over solidarity and cohesion, it seems entirely natural that one imaginable reaction would be skepticism towards a heavy tax burden.

One can easily imagine Lesthaeghe and U.S. social democrats disagreeing: an alternative model is what Fred Siegel has called “dependent individualism.”

In 1965, this changed. Liberal Republican John Lindsay was inaugurated mayor, ushering in what I call “dependent individualism.” This introduced the notion that the city had an obligation to support you, but that you had no obligation to help the city. 

Of course, this notion extends beyond New York city’s municipal welfare state to the logic of unconditional assistance. 

There is an alternative normative framework for the welfare state, which Amy Wax of the University of Pennsylvania Law School calls “conditional reciprocity.”

Most people accept collective responsibility for the poor but adhere to a moralistic distinction between deserving and undeserving recipients of public aid. They view entitlement to group resources as conditional on each person’s reasonable effort, consistent with ability, to support himself and his family. It was speculated that the widespread antipathy to “freeloaders” – that is, persons who depend unnecessarily on others – expresses attitudes that evolved over centuries to stabilize cooperative arrangements for mutual support that enhanced group survival. The popular expectation of a reasonable effort towards self-help defines the principle of conditional reciprocity. This principle continues to enjoy widespread assent in many societies. 

My sense is that this is the notion that undergirds a great deal of frustration that voters feel with the expansion of government — the sense that cooperative arrangements for mutual support have been badly undermined, and that the coming increase in taxes will finance a regime based on “dependent individualism” that effectively expands the freedom of one class of individuals at the expense of another.

Whether you agree or disagree, this is at least part of the story. And it hardly seems fair to malign people like me who worry about departures from conditional reciprocity as racists or ignoramuses. 

In an essay attacking the Cameron Conservatives, J.K. Rowling offers a different take on dependent individualism and conditional reciprocity. I find it pretty unconvincing, but it’s a good statement of the left’s anti-charity credo.

Reihan Salam is president of the Manhattan Institute and a contributing editor of National Review.
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