heh redux
February 24th, 2008Will Wilkinson goes all reductio on Henry Farrell. Henry says that people not donating money to the general fund isn’t evidence that people don’t like to give money to the government.
Apparently, collective action problems with the provision of public goods cause there to be collective action problems in areas that otherwise wouldn’t have collective action problems. No wait. That can’t be it. Oh, here it is: people can identify when something is unfair, but they can only act to remedy that unfairness when they’ve convinced every one else to do so. Shoot. That can’t be it either.
Jeez, there must be some subtle argument that can muddy the issue enough to obfuscate the obvious message in the data.
February 25th, 2008 at 6:12 am
Comment #10 over on CT, posted by David W summed it up perfectly: “But that question answers itself: it’s easily worth $300 to me to increase spending on basic science by $6 billion, but it isn’t worth $300 to me to increase spending on basic science by $300. So I’m willing to vote for the tax but not to make the contribution.
Collective action problem. End of story.”
February 25th, 2008 at 12:37 pm
Here’s a question: do we judge fairness based on how much the other guy contributes, or on how much it costs him?
February 25th, 2008 at 2:09 pm
Barry, this is exactly what the data are telling us and paraphrasing McArdle: People don’t want to pay more taxes themselves, they want everyone to pay more taxes.
This means, of course, people don’t believe they’re individually paying less than their fair share (i.e. the percent of total taxes they pay is not too low).
Great question swong. Your take?
February 25th, 2008 at 3:11 pm
My take? Depends on who’s doing the judging. Fairness is highly subjective.
The rich in the US pay a lower percentage of their income in taxes than the poor. The rich contribute far more tax dollars than the poor. Both of these facts are true, but few people can reconcile them. Irrespective of the taxation rate, at least one party will feel persecuted.
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Right now would be a perfect time to look at campaign donation figures.
February 25th, 2008 at 4:21 pm
The rich don’t pay lower percentage of their income in taxes than the poor. See the very right column of the first diagram here.
February 25th, 2008 at 5:27 pm
Hm, one learns something new every day. Why this then? (Not trying to argue, just curious). Maybe the breakdown looks different when state/municipal taxes are considered as well?
February 25th, 2008 at 6:06 pm
Yeah, I was going to make a caveat talking about how you define rich… There’s a few people (the top .001% let’s say) that make a majority of their income on capital gains. This is taxed at much lower rates than normal income. (There’s actually a good economic argument for low taxes on capital…)
Actually, Buffet’s comments are what spawned all this talk. The point being this: if Buffet thinks he personally doesn’t pay his fair share then why the hell doesn’t he donate some amount that he thinks is fair to the general fund? And if he thinks his cohort of 400 or so gagillionaires don’t pay enough, I’d think he’s persuasive enough to have his friends put something in the hat if he were to pass it around. Better yet, he can offer to pay some portion of the rest of our tax bills.
The collective action explanation doesn’t answer the question: why doesn’t Buffet donate to the general fund?
February 25th, 2008 at 11:05 pm
Well, he does do a little philanthropy.
Yeah… cutting a check to the general fund probably doesn’t give the same kick as breaking ground on a shiny new museum or research institute or hospital wing. Too many straws in that milkshake.