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Don’t Mess With Taxes

A moral defense.

Elizabeth Warren, the Harvard law professor now running for U.S. Senate, is getting a lot of attention for the video of a speech she made recently. It wasn’t just because she was taking on Republican talking points more forcefully than most Democrats do these days. It was also because she was defending an idea almost nobody in American politics dares to champion anymore, at least explicitly: She was defending the idea of taxes.

In recent decades, Republican politicians and key allies, most notably anti-tax crusader Grover Norquist, have succeeded in demonizing taxes, as if the very concept of a tax itself were immoral. You can see it in the way the GOP conducts itself in Congress, refusing budget and spending proposals if they raise so much as one cent in new revenue. And you can see it in the party’s field of presidential aspirants, who have said in debates that they hold the same position.

But there is nothing wrong with asking people to pay taxes. On the contrary, there is something very right about it. Nobody questions whether society can require people to serve on a jury or, in times of war, to enlist in the military. So why do we question whether society can require people to pay for the government whose services, and protection, they enjoy?

The moral case for taxation rests on two separate, but related, principles. The first is distributional. History teaches us that capitalism is an excellent economic system for generating wealth. But history also teaches us that capitalism will create losers as well as winners, often because of forces beyond any individual’s control. Whether it’s accident or illness, mismatched skills or misallocated resources, large numbers of people will inevitably find themselves in financial difficulty—without a job, without savings, and without enough money to pay for the basic necessities of life. It can be crippling for them and crippling for their children, so that poverty, like affluence, becomes its own sort of inheritance.

A civilized society recognizes this problem and vows to mitigate it. If capitalism does not offer everybody at least some realistic hope of upward mobility, it cannot survive. Here in the United States, a part of our solution has been to enact government programs that offer the needy minimal allotments of sustenance (food stamps) and shelter (housing choice vouchers), that provide the less affluent with cash (Temporary Assistance for Needy Families) and college tuition (Pell Grants), and that guarantee all citizens pensions (Social Security) and health insurance (Medicare, Medicaid, and the Affordable Care Act). These programs cost money. And the money has to come from somewhere.

The second reason we need taxes isn’t about the least fortunate; it’s about public goods. You’ll frequently hear conservatives argue that taking money from people, particularly successful people, is unfair because they, not the government, earned that money. But that’s not quite right, for reasons Warren explained very well in her monologue. Behind every successful individual is a set of public investments that past generations made. Could Bill Gates have made his fortune without government-financed education and technology? Could Sam Walton’s stores have spread across the country without government-sponsored roads on which goods and customers travel? “You built a factory and it turned into something terrific, or a great idea?” Warren said. “God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

President Obama, to his credit, later echoed these very sentiments. But the point should go further than even they suggested. The importance of public goods is not simply an argument for progressive taxation—that is, asking people who’ve been extremely successful to support things like roads and education, from which they and their businesses benefit. It’s also an argument for taxation in general. The rich should pay more, yes, but everybody who can pay something toward the cost of financing government should do so. And that includes the middle class.

Arguments over how much to tax are still fair game. It’s reasonable to question whether taxes are too high, on one group or on the country as a whole, particularly if there’s evidence the money is poorly spent. Of course, it’s also reasonable to question whether taxes are too low, particularly if there’s evidence (as there is) that we need more revenue to pay for existing services and if there’s evidence (as there is) that higher taxes won’t hinder economic growth. But, on the morality of asking people to pay taxes, there should be no debate at all. Taxes are an act of citizenship. We should all be proud to pay them.

This article appeared in the October 20, 2011, issue of the magazine.