I missed this earlier in the week: Jonathan Chait takes apart Amity Shlaes, who is apparently ready to junk the Constitution and give the Articles of Confederation another try. You might think that Chait is exaggerating, but, no, he really isn’t; she refers to the Articles as “our tradition” compared to the newfangled income tax.
Ah well. Chait is exactly right; Shlaes embrace of the Articles gives away the game, which has been about pretending (or, perhaps, ignorantly believing) that the Constitution was written to restrict the power of the federal government, when in fact exactly the opposite was true.
I’ll add one thing: the substantive point that Shlaes seems to be embracing is almost certainly wrong, too. She’s daydreaming about a scheme that would have the states raise tax money and then pass it along to the federal government, which she suspects would be a good idea because she thinks the US is suffering from “fiscal illusion” — that people aren’t aware of how much they pay in taxes because governments hide the true size of taxes from people. That’s something that theoretically could happen, but I’m confident that if anything what the United States has is the opposite. Surveys find that people always believe that taxes have recently gone up, even then they’ve been cut; while federal income tax is obviously not the only tax out there, we also know that a lot of people who feel oppressed by tyrannical levels of federal income tax actually pay none at all. The truth is that most people who take home a paycheck do in fact know about the tax bite out of that paycheck (even if they mistake exactly which tax it is), and that’s by far the bulk of federal tax revenues. Sales taxes (or even more so, a VAT) are far less obvious than a payroll tax or income taxes.
No, what really is “stealth” in the US system isn’t taxes — it’s spending, particularly spending done through the tax code.
Which is neither here nor there, anyway. We know what the American people want: less spending overall but more spending on practically every specific category; lower taxes for most and higher taxes on the rich, except when you actually do raise taxes on the rich they don’t like it much; and balanced budgets. I’m willing to place a strong bet that shifting who collects taxes, or even what kinds of taxes are collected, won’t do much to unmuddle that mess.
[Cross-posted at A plain blog about politics]