Just North of Something Important

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Feb 13

Take these three results together, and you get the problem we have in this country with taxes, government, and public opinion.

  • It’s bad fiscal policy to have a tax system where taxes are charged for certain programs. If you just pay all (or most) taxes into a single pot, then it’s a lot easier to respond to changing conditions, moving funding from one area to another. If you pay certain taxes only for roads and other taxes only for education, you quickly end up with a situation where one area has more money than it needs and the other has too little, and no legal way to rectify that imbalance.
  • But: people are much better informed about fiscal matters if they know exactly where their taxes are going. That’s the first result here. Even though Medicare is the thing that’s going to bust the budget, the area the most people think is a problem is “programs for the poor,” an area where people just don’t know how much money we’re paying out.¬†Combine that with the people responding “unemployment,” and 44% think it’s because we’re giving too much to the poor. That’s absolutely wrong.¬†
  • This wouldn’t be a problem if people trusted the government to allocate those single-pot tax dollars in equitable ways. But they don’t, which is the second result. 55% think they pay more in taxes than they get back, and 28% think it’s equal, even though only a small portion of Americans get more, or the same, than they pay.
  • And that’s why the third result is ultimately not as heartening as it could be. The #1 result, by some distance, for the best solution for fixing Medicare is to raise taxes. Maybe Americans would be willing to support such a move if they could see such benefits going directly to them, or if they thought paying more taxes in general to the government would get them more bang for their buck. But because we have to have a single-fund tax system, the only way the public is going to support revenue increases is if they trust the government to manage their money well. But they don’t.¬†

In other words, it’s not that we aren’t willing to pay more in taxes. It’s that we’re not willing to pay more in taxes to this government. Politicians are trying to get around this by making government more contractual, by saying “give us $X for Y and we will give you Z.” But ultimately, that just ties the government’s hands more. Without increased trust, policymakers won’t be able to make responsible long-term decisions - even if they wanted to.

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