Too Much Transparency?

It is easy to understand why conservatives and conservative-leaning moderates are enthusiastic about voting this year. They see the election as a stark choice between two competing value systems. But if that choice is so clear, why aren't Democrats equally enthused about defending the policies of Obama, Pelosi and Reid? Did Obama do a poor job of explaining his achievements and his philosophy of government? Or is the real problem that he has been too articulate? To use an overused expression, have the goals and philosophies of his administration become too "transparent?" That term has two different meanings, of course, one generally positive and one generally negative. A process of government whose internal operations are entirely visible is generally viewed as preferable to a so-called black box, where the covering is opaque and nothing is visible but the raw inputs and outputs. It is quite another thing for the purported rationale or explanation for a government policy to be transparent. The connotation there is that of a "cover story" that can be seen through, with the result that the underlying reality is understood for what it is. In both cases the underlying reality can readily be seen. The difference is the nature of that reality. To the cognoscenti, there has always been a redistributive element at work in the progressive income tax, but it has been hard to see or pin down. The actual operation of the tax system is difficult for many to understand. But even with a simple, straightforward example -- one person earning wages of $50,000 and another earning $250,000 -- it is hard to argue with any scientific precision that there is any single point at which a given level of progressivity actually constitutes a redistribution of income. Even if the entire defense budget were funded by a special tax imposed exclusively on Bill Gates and Warren Buffet it would still be possible to argue that they were only being asked to pay their fair share. Who can say how much a billionaire benefits from the Department of Defense -- or for that matter any other agency providing a more or less essential governmental function? But that is the unfortunate failing of the progressive income tax as a method of redistributing income or wealth. One quickly enough comes to the point where a significant mass of people is simply exempted from income tax because sufficiently high rates are imposed on those with higher incomes. At that point, if you are out of the system, now and for the foreseeable future, the system's potential to redistribute economic benefits to you has been exhausted. Once all burdens associated with funding the government have been lifted from your shoulders, there is no more help that can be provided to you -- without clearly and expressly taking income earned by one person and giving it to another. That, of course, would be simply too transparent. The solution for those of a progressive mindset, of course, is to create more government. If Washington starts providing the necessities of life and that is accepted as a legitimate and natural function of government, then we can get back to arguing that those who are better off are simply not paying their "fair share" of the cost of government. That's a better place for progressives to be than arguing over whether any particular service -- medical care, transportation, housing -- is a proper function of government in the first instance. This is where the argument over the size and scope of government becomes so important. Social security represents the ultimate in "big government" -- transfer payments for the necessities of life. But it is funded by a flat tax where everyone pretty much gets back what they put in. In effect, it is a forced savings program. But if huge government benefits are paid for the necessities of life, and they are funded by a progressive income tax, that is something entirely different. It is the combination of unlimited government and a progressive tax system that can facilitate the move towards a government that takes from those according to their perceived "ability to pay" and gives to others based on their perceived "needs". If that is one of the underlying themes of the Obama administration's economic policies -- spreading the wealth -- why isn't this philosophy of government more popular among those who would ostensibly benefit? The answer, I believe, is that even for those who might be potential recipients of new Federal entitlements, the thought of moving closer to a welfare state is disheartening. To draw an analogy, someone who benefits from affirmative action, even if it is non-race based, would rather believe that the SAT tests are biased against them and don't truly reflect his or her abilities, than believe that he or she is simply getting a hand-out, a place he or she doesn't really deserve on their individual merits. That's why guaranteeing state university slots for anyone who reaches the top decile of their high-school class may be more popular with students than affirmative action, even if it is affirmative action based entirely on economic factors such as family income. It is a benefit they have earned as individuals, not one that is handed out based on their status. Similarly, even if you are a potential beneficiary of a policy of redistribution, supporting a system of taking from some and giving to others isn't as much fun as fighting "injustice" or "fraud" or "wrongdoing". Redistribution just doesn't have the same ring to it. That's why -- in the waning days of this election campaign -- Obama has spoken less about spreading the wealth and has gone back to criticizing Republicans for not eliminating tax breaks that supposedly subsidize the practice of exporting jobs. The mantra has changed from a positive call for "tax breaks for the middle class" to a negative call opposing tax breaks for those who do bad things. Yes, the budget deficit is given, as well, as the reason given for opposing expanded government. But I also think there are many who simply cannot get enthusiastic about being the beneficiaries of redistribution in the name of "social justice." There may have been too much transparency about government in the age of Obama.