Robert Frank blames anti-tax rhetoric for preventing the government from raising more revenue:
Because of our inability to talk sensibly about taxes, the United States has been sliding toward second-class status in the world economy. Our national debt, for example, has increased by more than $3 trillion since 2002. Once the world’s largest creditor nation, we are now its largest debtor. We are currently borrowing more than $800 billion a year from the Chinese, Japanese, South Koreans and others — loans that will have to be repaid in full with interest. These imbalances have sent the dollar plummeting.
The situation is set to become worse. On the current trajectory, the national debt will rise an additional $5 trillion over the next decade. The retirement of baby boomers will require additional revenue to cover growing deficits in the Social Security and Medicare programs.
So why not cut wasteful spending? Frank explains quite circuitously:
Anti-tax crusaders say that these problems can be solved by just cutting wasteful spending. To be sure, Congress could help keep spending in check by adopting a strict pay-as-you-go standard for all new legislation. But most existing government programs have powerful constituencies, and programs that lack such strong defenders are not always the most suitable candidates for cuts.
So, according to Frank, cutting spending isn’t as simple as raising tax rates and therefore is not optimal. Huh? Entrenched interests in Washington are a red herring. If the problem is with the entrenched interests, one should seek to reduce these interests rather than work around them. The easiest way to do this is to maintain low tax rates and thus “starve the beast.” This forces the government to make tough decisions with regards to spending.
Further, there is no reason to believe that increasing revenue through higher taxes will lead to a closing of the deficit or a reduction of the national debt. In fact, it is much more likely that the government would use any increase in revenue as new spending rather than for deficit reduction.
Nevertheless, Frank proceeds, arguing ad absurdum and proceeds down a slippery slope:
One strategy would be to inform voters that the “it’s your money” argument is incoherent. Taken to its logical conclusion, it implies that it is illegitimate for the government to collect taxes. But if that were true, there could be no government and no army, in which case, the United States would have long ago been conquered by another country. Then we’d be paying compulsory taxes to that country’s government.
Frank clearly does not understand the “it’s your money” argument. This is an argument against taxes at the margin, not in total. Everyone recognizes that we need a government to provide some services. Even some of the most ardent libertarians maintain that the government should have the power to enforce property rights, which quite obviously necessitates the levying of taxes. Even more importantly, however, is that a rejection of the “it’s your money” argument does not necessitate an increase in taxes. It is not enough to argue against a straw man to prove your point.
Quite ironically, it is Frank’s diatribe that is long on rhetoric and short on an actual understanding of arguments for lower taxes and less government.