You Get What You Pay For: An April 15 Meditation

I don't know exactly when it happened, but at some point over the last generation or two Americans began to think of themselves less and less as "citizens" and more and more as "taxpayers." The implications of that subtle shift of identity have been enormous at all levels of government. In a nutshell, Americans have been persuaded that we pay too much in taxes; that taxes should always be reduced; and that government spending of our taxes is wasteful. A shrunken sense of shared obligation, an inflated sense of righteous entitlement.

The debate over taxes has been framed this way, and those on the liberal and left side of it have been reduced to saying, in effect, Americans don't really pay that much - not as compared to Western European countries for examples. It hasn't been a compelling argument.

But this is exactly the wrong way to think about taxes. We don't pay "too much" or "too little" in any absolute sense, of course, but only in relation to what we expect those taxes to do for us. In fact, Americans - especially those in the tax-cutting Red states - have made steadily more demands on the public purse even while insisting that they shouldn't have to pay for those things (see: the Federal balance of payments). If we want our roads paved, our police to show up when we call, our food safety monitored (and we do), then we have to fund those things. Americans consistently report that they want Cadillac schools for their kids, but they want them at Hyundai prices. The first rule of economics is: you get what you pay for.

Looked at this way, I do think we are paying too much in taxes - because what we get in return for them, more than anything else, is the Defense Dept. Since the end of WWII year in and year out roughly 50 cents out of every dollar of Federal discretionary spending goes to the Pentagon. Which means that the other 50 cents has to pay for everything else. And let's face it, most of us don't get that much for all that military spending - not better roads, not better schools, not better health care or cleaner air etc. etc.

The easiest (and I realize that it is anything but easy) way for us to pay for the ambitious programs this nation so desperately needs - from health care to public transportation - is to hack the Defense budget mercilessly. Shrink it to even twice the percentage of the British or the French and we'd be rolling in cash to pay for more useful things.

As it happens, I'm writing this from Washington, DC, a city whose cultural magnificence is available to me for free (thanks to taxes). I'm sitting in the glorious Main Reading room at the Library of Congress (more tax dollars at work) and thinking that we really can get great things for our society if we re-order the priorities of how we spend our taxes.