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July 17, 2003

Trying to Tolerate Tax-Whiners

Filed under: pre-06-2006 — David Giacalone @ 4:43 pm


There were recent postings at the Volokh Conspiracy and Benefits Blog concerning the famous quote by Justice Holmes that “Taxes are what we pay for civilized society” (Philipine Tobacco Company opinion). Their blogging got me thinking about Tax Whiners and, although it’s a topic of civic rather than legal ethics, please indulge me briefly in this pet peeve.


As a good American, I recognize my civic duty to tolerate the constant complaining of Tax Whiners (who have never seen nor imagined a tax they would pay without some expression of pain, resentment or suspicion).  I wonder, however, if said Tax Whiners will ever recognize a reciprocal duty on their own part to cool it once in awhile, and stop spreading their misery to everyone else within eyeshot or earshot.  I realize this might be too much to ask, as most Tax Whiners (like sulking teenagers) seem to lack any notion of social interdependence, instead asserting an absolute entitlement to all they have and all they receive.   As I wrote in the Albany (NY) Times Union (March 1, 1998):



“Through a mind-numbing misunderstanding of morality, political science, economics and human nature, Tax Whiners have convinced themselves that they hold the moral and intellectual high ground and will listen to no other opinions.”


But, I digress. What increases my concern right now is that even the estimable Professor Volokh stooped to a bit of tax whining this week.  Although he admits that his hero Justice Holmes has not been taken out of context, and did indeed mean that taxation is a fair price for civilization, Eugene Volokh just had to add this whine to his July 13th posting [bold emphases added]:




The interesting question, I think, is what the aggregate tax burden (federal, state, local, and territorial) was in 1927. My guess is that it was a lot less than the 35% or so that it is today. (I’m speaking here of the effective tax burden, which is basically revenues / gross domestic product, not the top marginal rates, which strike me as less telling.) If Holmes were alive today, would he think that civilization was gouging?


With all due respect, it seems to me that the question is not one of mere percentage numbers and effective tax burdens.  Beyond having a far more just society than in Justice Holmes’ era, the individual pieces of economic pie that we are now sharing with the government through taxation are inarguably larger at all levels of society, with the average leftover portion we each get to consume, invest or save surely greater than it was in absolute terms when Holmes lived.  Not to mention: despite all the cries of tax-gouging, the USA has been the mightiest and wealthiest nation on the planet for decades, with no end in sight (unless we let our infrastructure rot through lack of public investment). 


I doubt that the argument could be successfully made that keeping overall taxation at the rates that existed in 1927, would have resulted in the social and economic investment, stability and infrastructure that is the basis for our current wealth.



  • As Holmes stated, and BenefitsBlog quoted (July 16, 2003), you need to look at taxation, not just from the perspective of its immediate effect, but also from the perspective of its “organic connection with the whole.”

Also, if we believe that our marketplace is workably competitive and our investment system reasonably rational and efficient, we should also believe that income levels are adjusted to take into account the size of our aggregate tax burden. Just as nontaxed bonds come with smaller interest rates than taxable ones of similar risk and value, salaries and wages (as well as the return demanded by investors) would surely be readjusted downward in a relatively short time, if the overall effective tax burden were significantly lowered.   E.g., employers would pay workers less if workers had significantly less to pay in taxes. [Take a look at the average wages, and cost of living, in states that have no or low income taxes or property taxes.]


Therefore, Tax-Whiner Heaven — a place with no taxes of any kind — would certainly give Tax Whiners something else to complain about:  Relatively speaking, they wouldn’t be any richer than they were under the current “gouging” system.  And they wouldn’t have all the psychic payoff they apparently get from anger over taxes.


Okay, I’m getting sarcastic, so I better stop. Let me take a few deep breaths and get back to the arduous task of tolerating Tax Whiners, and complaining about the sorry state of legal ethics.


 


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4 Comments

  1. Something must be wrong…we’re in agreement on something!!

    SL

    Comment by Stuart Levine — July 18, 2003 @ 10:54 pm

  2. Nothing’s wrong, you’re finally right.
    [;-)]

    Comment by David Giacalone — July 19, 2003 @ 12:30 am

  3. Dear David: I am in 100% agreement with you on this one; and I have loved that quote from Justice Holmes since the first time I read it.

    Justice Holmes, after all, not just talked about civilization, he bled for it in the civil war.

    Comment by Deborah Sirotkin Butler, Esq. — September 20, 2003 @ 8:47 pm

  4. Holmes was undoubtedly right in a directional sense. Unfortunately, his view provides little in the way of a gauge by which to evaluate the rightness of any specific tax level. Tax levels set at different rates might contribute, in different circumstances, to a hegemonic government that harmfully consumes private earnings, or to an underfunded government that deprives a people of sufficient public investment to sustain a productive private sector.

    In short, while I admire short, pithy aphorisms, I find little guidance of value in Justice Holmes’ famous statement.

    Comment by Marvin McConoughey — January 22, 2005 @ 11:18 pm

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