Arnold Kling  

A Whiff of Liberaltarianism from the Left

Your Taxes at Work... Asset Price Swings, Revisited...

Elaine Kamarck writes,

in the spirit of a new progressive incrementalism, here are three battles that progressives should fight in the next Congress to put our fiscal and economic house in order: create jobs by cutting the payroll tax and replacing the revenue lost with a carbon tax; bring the Social Security trust fund closer to balance by changing the formula for Social Security benefits so that, in the future, well-off people will get somewhat smaller benefits than under the current formula; and reduce the deficit by creating a tax expenditure budget.

This sounds liberaltarian-ish to me, and it comes from a former official in the Clinton Administration. That is refreshing, because otherwise I see liberaltarians as people who have defected from the liberty movement rather than from the progressive movement.

My problem with liberaltarianism has been my fear that it would mainly serve to divide and weaken economic conservatives. Meanwhile, the left appeared to be completely immobile. If you lose more free-market allies than you gain, then liberaltarianism is not a good move. I still have that concern, but the new issue of The Democracy Journal has a slight whiff of liberaltarianism--among some other, more malodorous pieces.

Cait Lamberton writes,

Promote the concept of tax choice. What exactly is tax choice? Simply put, it is a policy that would permit taxpayers to allocate a percentage of their income taxes to any portion of the discretionary federal budget. In a tax choice program, a taxpayer who wishes to support public education, for example, could send some of her income tax dollars specifically to that part of the federal budget, while a taxpayer who feels strongly about the military could allocate a portion of his income tax payment accordingly.

There is overlap here with some of the ideas in the widely-unread Unchecked and Unbalanced. I take the idea a bit farther, but Lamberton's proposal is a start.

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COMMENTS (5 to date)
Chris writes:

Tax choices seems interesting - but what I'd think you'd get are federal departments spending tax payer dollars on advertising to tax payers to give them more of their dollars.

Rent seeking to enhance renting seeking? blah.

conc writes:
Rent seeking to enhance renting seeking? blah.

You could potentially legislate against that, although add to this co-ordination problems and all the well-known issues with getting people to reveal their willingness to pay for public goods, and I struggle to see how this leads anywhere good.

(I guess tax dollars are fungible, so maybe it won't really lead anywhere at all, but then, what's the point?)

kebko writes:

I used to think that the tax choice idea might be good, but I'm afraid that since the dollar amount would be fixed, the disciplining effects of the market wouldn't be in play, and everyone would just use their allocation for social signals. I think there would be a lot of money designated for "for the children" and "green energy" types of vacuous programs. Maybe it would be better than what we have now, though. It would probably be hard for the corn industry to get taxpayers to pay up for various subsidies, etc.

Tom Dougherty writes:

Tax choice sounds like a gimmick to me. They should call it spend choice anyway, because you decide on spending not taxation. If it were tax choice, I choose not to be taxed. But I doesn’t work like that. But suppose no one choose to spend on the military. Do you think for a moment that choice would stand? Or what if the military got allocated too much money (as determined by the politicians). It would be quickly argued that the military weapons programs and other spending items were fully funded so the money could be allocated elsewhere. And what is the likelihood you could allocate your tax dollars to none of the above spending programs? Not to likely in my opinion. Also, the constitutionality of such a proposal sounds shaky to me give that the constitution gives the power of the purse to congress not directly to the people. I don’t suppose congress would stand idly by and let the people determine budgetary appropriations. Nor would it be good if governmental departments had large fluctuations in their budgets from year to year based on the whims of the people. I don’t see how any long term planning could be done under such a situation. Chalk tax choice up at best as a gimmick and at worst a bad idea if truly implemented.

Colin K writes:

The net result sounds like just a more atomic form of voting; instead of getting to vote once every N years for a very coarse preference (Republicans want to spend slightly more on defense) you get to vote every year on a finer basis. I think the results would depend on how fine people can get: would I be allocating my dollars between the DoE and DoD, or do I get to decide how many dollars go the F-22 program versus Head Start?

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