Believers in Tax Cuts Rely On Emotion, Not Facts

Noah, at Noahpinion:

Back in the 70's taxes on the rich were high, but now they're quite low. There's no room to cut them any more without forcing the American government into default (and, in fact, the Bush tax cuts will probably do this if not repealed). Any economic benefit that we might ever have gleaned from trickle-down economics had to have been tapped out way back in the 80s.

So who is still arguing that taxes on the rich are oppressively high? Well, rich people who don't mind if the country is forced into default, for one. And also people who, because of their personal morals, just really, really, really don't like progressive taxation. The winnowing of the conservative raison d'etre is going to produce the kind of "echo chamber" that Krugman sees, as well as the increasing moralization cited by Yglesias. Conservatives won the policy debate, back when Matt Yglesias and I were in diapers. What we call the "conservative intellectual movement" in 2011 is a handful of corrupt, silly, or monomaniacal people trying (somewhat lamely) to replicate the victory their forebears won in the 80s.

But actually, I think there is something even bigger that Yglesias and Krugman don't mention. Specifically, the debate about taxation may have been an intellectual one at the elite level, but on the level that really matters - mass opinion - it has always been about morals and emotions, and never about elasticities or deadweight losses. The idea that progressive taxation "punishes success" is something my dad was hearing back in the early 80s; my history teacher gave me that line back in '97, and I suspect it was a common refrain a century earlier than that. The "fairness" argument is not new. And on an even broader level, it was stereotypes of "welfare queens" and lazy minorities that turned working-class whites against social insurance (and against government programs in general) in the Reagan years.

It was these emotional and tribal appeals that shifted much of America to the Republican camp. The average working- or middle-class Republican voter doesn't have a clue who Greg Mankiw is, what determines economic growth rates, or how trickle-down economic policies are supposed to work. But, in whole or in part, he has bought into a narrative that tells him that he does a hard, honest day's work, and that taxes and government spending are nothing more than a way of punishing him for that hard day's work (and, probably, rewarding some black or Hispanic person for a life of indolence).

This is extremely well-said.  The facts don't matter.  Bush's tax cuts have only widened the deficit substantially, and have done nothing when it comes to economic growth.  Ask people what percentage of the U.S, budget goes to foreign aid and you'll hear some huge amount, like 10 or 20%.  I saw a guy I know post on facebook that if the government only cut out "stupid studies" they could almost solve the budget deficit.  But the root of most opposition to taxes is that the money goes to undeserving poor people.  I'd be happy if most people could tell me what percentage of their AGI they paid in federal income taxes.  I would guess that for most of them it is under 15%.  I would also guess that they would say 25%.  They would really be steamed if they knew somebody who didn't have any earned income, but received $86,700 in dividends would owe $0 in federal taxes (income or FICA).  The Bush tax cuts work as designed.  That doesn't help the deficit at all.