The vicious circle of taxation rhetoric

Ah, spring. The buddling of the trees, the blossoming of the daffodils, the abrupt transition from shoveling snow to tending the yard.

And the annual flowering of complaints from conservatives, businesses, and Peter Shumlin about how Democrats want to tax everything. Look at all these tax proposals: sales tax on services, new limits on tax deductions, sugary beverage tax, candy, tobacco, payroll tax, development fees and farm-fertilizer taxes, plastic bag fee, fee hikes for various professions, tax on vending machines, and I’m sure I’m missing a few others.

Take them all together, and you have a picture of Montpelier liberals trying to squeeze the lifeblood out of our economy by taxing everything in sight.

There’s a problem with that. Nobody in Montpelier wants to “tax everything.” Not a single Democrat, not a single Progressive. Here’s the reality.

As we have previously documented, Vermont has a structural tax problem. Income tax revenues are stagnant, thanks to our wonderful jobless economy* that’s rewarded the wealthy while screwing the middle and working classes. Public sector programs are expanding, thanks to our wonderful jobless economy that’s creating more and more marginal jobs; people are working hard, but barely getting by and/or qualifying for government programs in spite of their full-time employment. And sales taxes are taking a double hit because (1) the Internet and (2) the fundamental shift from goods to (untaxed) services. We used to be roughly 2/3 goods and 1/3 services; now it’s the other way around.

*And don’t go blaming the economy on Vermont Democrats. It’s the same thing pretty much everywhere, and the primary cause is the concentration of wealth at the top. Corporations and the wealthy are sitting on mountains of cash, which is NOT being plowed back into economic growth, it’s just sitting.

Also, thanks to our wonderful jobless economy, most people have less money to spend so they’re buying less stuff. (For those wondering, the wealthy are not the “job creators”; that’d be the working people who buy stuff and create the “demand” side of our “supply and demand” economy.)

The combined effect: Rising demand on public services and structurally falling revenues.

So the governing party tries to close the gap, because the alternative is drastic cuts in government. They suggest a way to enhance revenue; business groups and conservatives say “no.” They come up with an alternative; business groups and conservatives say “no.”

Lather, rinse, repeat, over and over again. What have you got? A laundry list of tax ideas, proposed sequentially in an attempt to find a palatable alternative.

The Democrats’ reward? They’re accused of “wanting to tax everything.” Which is false. They want to find a way to sustainably pay for the government that Vermonters want. (Even conservatives have trouble identifying specific cuts, because specifics are unpopular. Generalities are safe.) The Dems tried one plan, then another, then another, then another, etc., etc. Each plan was knocked down in sequence. And then the folks doing the knocking-down accuse the Democrats of wanting to enact every single one of those plans. Which they never did!

It’s a nice little rhetorical gimmick. Nasty and mendacious, but effective. You can tell it’s effective because even our Democratic governor has bought it.

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4 thoughts on “The vicious circle of taxation rhetoric

  1. Dave Katz

    Grover Norquist gave these troglodytes a meme and the bastards are gonna do it, and, really, damn the consequences. Radicals, the lot of ’em. As a one-time historian, I’d wager whatever progeny is still standing in the ragged tatters of Gem Of The Ocean a half-a-century from now is going to treat this era very harshly for its disastrous short-sightedness and willful ignorance, also known far and wide as stupidity.

    Still begs the question, why, oh why, does The Loyal Opposition have to trip over themselves in their eagerness to f’in help the Radical Lemmings?

    “What is more difficult for many academics to recognize is that progressivism has its own distinctive dangers and defects. Unfortunately, these tend to be less visible from within a progressivist sensibility. They include elitism, paternalism, authoritarianism, naivete, excessive and misplaced respect for the “best and brightest,” isolation from the concerns of ordinary people, an inflated sense of superiority over ordinary people, disdain for popular values, fear of popular rule, confusion of factual and moral expertise, and meritocratic hubris.*” Hmmm. Sound like anybody we know?

    *attribution: Jack Balkin, here:
    http://www.yale.edu/lawweb/jbalkin/articles/popprog1.htm#N_42_

    Reply

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