Academic

Skin, financially and literally

By Tung Yin

Since today is April 15, there's been extra focus on the fact that about half of the population pays no federal income tax.  Megan McArdle has a typically clear-headed post with thoughts on the ramifications of this observation, and the Oregonian has a guest editorial largely about my colleague (and Senate candidate) Jim Huffman's views on the subject.  At the risk of oversimplifying, one might say that there is a fiscally conservative argument that, even with a progressive tax system, all taxpayers should have some stake in the system, such that tax increases are felt by everyone -- "skin" as it has been called.  Otherwise, the argument goes, you could have a situation where a majority of people don't pay taxes but vote to increase them on the minority who do.  (Of course, the situation is more complicated, because the working poor do pay Social Security and Medicare taxes, and possibly sales taxes, though not here in Oregon, since we have no sales tax.)

What strikes me as fascinating about this argument, with which I have some sympathy, is that it is usually rejected by progressives, who point out the aforementioned other taxes and the like.  However, notice the similarity between the tax "skin" argument and the real "skin" argument about why we should have a draft.  It's a common progressive argument that the professional all-volunteer military has been bad for deliberative process regarding the waging of war, because the human costs are borne by a small subset of the population (and often thought to be less affluent).

That's the same argument, basically, as the tax one!  So it's interesting to me that there isn't complete alignment of views on the two issues.  (I'm sure that some people are consistent on both points.)  If we think that everyone should feel the pain when taxes are increased, then everyone should feel the pain when we go to war.  Whether that means a draft, or some special "cost of fighting" tax (for which members of the armed forces would be exempt), we should all understand the cost of using military force.

Yet, it seems like we have the worst of all possible outcomes: a tax system in which not everyone has a stake, and a military in which not everyone sacrifices something.

Full post as published by The Yin Blog on April 15, 2010 (boomark / email).