Steven Landsburg has written an excellent post, in which he explains why it’s difficult to honestly describe Mitt Romney’s tax plan as redistributing money from the poor to the rich. In fact, both his and President Obama’s plans are highly progressive.
I found this particular bit worth pondering:
Note, for example, that, contrary to the impression you might have gotten from Klein’s and Krugman’s posts, both plans place the highest percentage burden on the top 1%, and both plans place a negative burden on the middle quintile — though Obama’s does both of these things to an ever-so-slightly greater extent than Romney’s does. There’s room for disagreement about which plan is fairer, but no room, I think, for disagreement about which chart is relevant.
What I find interesting is the bit about the middle quintile. What it says is that the median income earner is receiving more in transfers than she pays in taxes. I find this problematic, as it increases the risk of making the state a tool for extracting resources from those that have earned them, rather than a vehicle for solving collective problems. Obviously, in practice, I am skeptical about the state’s ability to do the latter well, but it is important that such a thing remains the ambition, as it is otherwise difficult to justify giving up such tremendous power.
I fear that a government that is paid for by ever fewer will become more dysfunctional, as well as more tyrannical. It will narrow its focus to how the pie should be divided, encouraging voters to fight for a bigger slice, while ignoring the bakers. It is difficult to say whether it is currently a reason for why the U.S. government is functioning less well than usual, but I predict that it will be of growing importance.