Democrats’ efforts to impose significantly higher taxes on the state’s businesses and wealthiest individuals is but the most recent incarnation of the tyranny of the majority prophesied by leading thinkers in our nation’s founding. The concept that a majority can abusively (or tyrannically) take the property of others for the interests of the many has long been the focus of constitutional scholars and philosophers in our society.
And yet the desire to dramatically fine narrow segments of our society to fund the general government, at the exclusion of others and, in many instances to subsidize others is one of the common mantras of state and local finance. Today the legislature pursues businesses and the successful to fund a government whose spending is accountable to no one.
It happens at all levels of government. Local governments tax hotel residents to fund local programs like parks and senior centers. Senator Obama proposes a new shift to a more progressive federal tax system that would eliminate the tax liability of some ten million Americans. The state legislature targets a narrow group of people who already account for a disproportionate share of the state budget.
And why shouldn’t they? These folks don’t have enough votes to stop the legislators in question, and depending on the scenario, these folks may not even have a voice in the legislative process that imposes the tax. But there is a more fundamental problem with this whole approach.
Such a system of taxation goes directly against the interests of democracy and accountability. Not progressive taxes, but a system of general taxation that so narrowly focused and targeted that only a few individuals and organizations are asked to bear the burden for all of society.
Consider the concept that someone offers to give you a brand new car (and pay its expenses) for no cost to you at all. You only have to drive it and enjoy it. You rightly feel that you have no real voice to decide the type of car, the quality of the car, or even its features and preferred attributes. You also don’t have any major incentive to care for it and preserve it. Why? Because you didn’t and don’t pay for any of it.
Similarly, if all government services (say schools) are free to you, you really don’t have any standing to complain about their quality, their effectiveness, their value, or even their products—you didn’t pay for it anyway. It’s like that free radio you got in the mail for subscribing to the magazine—you didn’t expect much and that’s what you got.
It is a terrible model for public finance and the government, if it can give enough people “free” services, eventually undermines the accountability that its customers should impose. Instead, government should strive to make everyone pay their share of government services as a way of ensuring the maximum level of engagement and accountability.
Instead of narrowing the tax base further, we should be looking at a public finance system that calls for everyone to pay, so that we can make sure that everyone will care about who is reaching into their wallets and why. While I must admit I was skeptical about flat tax systems at the outset, such a system would do the most to engage the most Californians in the conversation about what and how their money is spent.
People must understand that the higher salaries they pay to their employees must come from their pockets, and that the investments made in infrastructure through the state’s recent bond-funded shopping spree come at a real cost. Eventually the credit cards come due.
Sharing in the burden promotes a sense of ownership and pride that will encourage taxpayers to engage the political conversation and voice their priorities, both in the blogosphere and at the ballot box. Civic engagement can only be fostered by a populace who realize that they are active participants in the problems and the solutions.
If taxes must be raised to balance the state’s budget and provide services for all Californians (a case not yet fully or adequately made to taxpayers), then the burden of the solution should also fall on all of their shoulders, not just the narrow shoulders of a few targeted minorities.