Progressive Agenda Tip #1: Pay Your Taxes

With another report of a senior administration official charged with failure to properly pay taxes, I feel the need to state the following very obvious point. The hopes and promises of a progressive agenda rest on American's collective willingness to pay taxes to support the enactment of the proposed reforms.

Of course, this "tax underpayment" problem is not unique to the Obama administration or even to Democrats. In fact, in most cases these mistakes seem to stem from overly-complicated, burdensome, and technical tax rules. But regardless of cause or intent, these tax problems pose a particular challenge to a progressive agenda built on the the belief that collectively - through coordinated government action - we can provide a greater level of well-being to our citizens than if we allowed individuals to pursue their independent self-interest in an uncoordinated market setting.

This is a really big claim.

Any hope of proving this claim to be true (or even getting people to agree to try it out) needs to overcome two problems inherent in collective action problems - meaning situations in which our individual self-interest (e.g., I really don't want to pay taxes on that small consulting fee that I already spent) contradicts with our collective self-interest (e.g., I really want the government to be able to afford to pay me unemployment insurance in case I lose my job.)

The first problem is the risk of free riders: those who benefit from the collective outcome (e.g., willing to use unemployment insurance if needed) but do not contribute (e.g., don't report consulting income). The second problem is the requirement that those individuals designing the government action must work on behalf of the collective interest, which involves making the hard, complicated, and technical choices necessary to maximize American's overall well-being rather than considering the specific effects of their action on themselves, their friends and family, their district/state, or their party.

Reports of tax problems highlight how both of these problems can stand in the way of attaining the collective action needed to enact any part of the progressive agenda. When our leaders, or even our potential leaders, fail to contribute (in any way) to the collective good, it feeds our lack of faith in them as stewards of the incredible coercive power of government. Further, and potentially more troubling, it reinforces the notions that collective action does not work, that people will always free-ride, and that our government can not generate collective solutions. As we know, this lack of faith in government action underscores much of the "it will never work" criticism of progressive policy proposals.

You know the old saw that women (or African-Americans or immigrants or...) must be twice as good, twice as smart, twice as effective to be just as successful? I feel the same way about those pushing the progressive agenda. If you really want the country to believe us that collective, governmental solutions can make us all better off, you have to be extra-scrupulous, extra-honest, extra-hard-working, and extra-careful when paying taxes.

Following this advice might require paying taxes on things in which the tax law can be interpreted two ways, or is otherwise vague. Consider this "over-payment" an investment in our collective good, as well as an annual insurance premium in case you are ever appointed to a high-post in a presidential administration.

Excuse me now, I am off to double-check my 2008 (and 2007 and 2006 and...) returns!

Comments

[Elizabeth Rigby - Huffpost Blogger]

Update: NYT has a great article providing real tips (and a little perspective) on how future-adm­inistratio­n-appointe­es can avoid tax problems by taking the appropriate steps now. Just in case, I am going to take their advice to heart.

Here's the link: http://www.nytimes.com/2009/02/04/your-money/04money.html?_r=1&ref=business

[timezone]

Amen, Dr. Rigby.

[MrScopes]

I remember trying to get my mother-in-law to take some perfectly legal measures to reduce her taxes.

'I'm not sure about that,' she said, 'I want to pay my fair share.'

Of course, she was an ex-communist who believed in big government.

[Elizabeth Rigby - Huffpost Blogger]

Great story!

[SemperLiberi]

All these wonderful "Progressive" programs to help the poor, disadvantaged, uninsured..etc. etc. require TAX DOLLARS. When the President's nominees for high office are found to have not paid their taxes, it looks (and is) really really bad. At the very least it provides ammunition for Rush Limbaugh! How hard is it to know you need to pay taxes on a car and driver provided gatis by someone else? What the hell is wrong with Obama's vetting team? Or is it true that Republicans and Democrats are basically the same?

[BarryS]

of course god forbid we do the right thing and make it easier for employers of home workers. There are probably dozens of forms to fill out every year each with their small payment. all due quarterly, to different entities, at different addresses, requiring bizarre entries in order to give tax breaks to the politically connected. How about one form, one payment at a fixed percentage of the pay. let the central computers divvy it up. what a crock.