Revenue Blues: The Case for Higher Taxes

Source: Colin Gordon, Dissent, June 11, 2013

The tempest surrounding the IRS has cemented the view on the right that the American tax system is out of control. We are “taxed enough already,” Tea Partiers complain…. Much of the anti-tax rhetoric, of course, serves a “starve the beast” strategy by which diminished revenue yields budget deficits, spending cuts, impoverished public services, and demands for further tax cuts. But that’s not the way the argument is made. Instead we are told that the administration (or “Washington”) has engaged in an unsustainable orgy of taxing and spending.

This couldn’t be farther from the truth. As Dean Baker and others have tirelessly reminded us, the deficit is a creature of the recession (which placed new demands on public programs as it strangled revenues) and not of some willful spending spree. In fact, discretionary government spending, as a share of gross domestic product (GDP), has never been lower.

But the real howler here is on the tax side. There is no conceivable benchmark—in our past, or in comparison to our international peers—by which one could sustain the argument that we are taxed too much, or “taxed enough already.” Here are four ways of underscoring that point.

1.Tax rates are falling, for everyone….
2. Tax rates have fallen dramatically for the very rich….
3. Taxes have fallen even more dramatically for business….
4. We don’t collect enough money….