The anti-tax crusader pulls out of his driveway in his Porsche, hoping that the neighbors are watching. Hes proud that its the most expensive car on his block. Thats the greatness of America, he muses. Thats what we should celebrate on July 4! I spend money so much more wisely than government.
Three blocks later, Babbitt, as well call him, swerves to avoid one pothole and lands in another. Theres a sickening thud. With a sinking heart, Babbitt gets out to examine the damage.
*@#% government! he curses. They cant even fix the roads. Now Ive got a flat, and my rim is bent! Whats the point of owning a hot car when the government cant even fix the roads?
Babbitt calls a tow truck and gets to the office two hours late, missing a meeting with a client. The government is like George III, he moans. Robs us blind and doesnt do anything for us!
Voters like Babbitt will play a major role in this years elections, and politicians are often too timid to point out the blunt truth: Sometimes money is better spent by the government than by individuals.
Indeed, it seems to me that were at a point where we would be better off as a nation paying a bit more in taxes and in exchange getting better schools, safer food, less congested roads and, overall, a higher standard of living.
Americas infrastructure is now so wretched that, in some areas, the only people who drive straight are the drunks. Anyone who is sober swerves to avoid potholes.
In New Jersey, the gas tax hasnt been increased since 1992, and two-thirds of the roads are now evaluated as in poor or mediocre condition. The upshot, one study found, is that the average motorist spends $601 per year in repair costs. It sure seems as if society would be better off spending a little in taxes to improve roads and then saving on car repairs not to mention in injuries and fatalities averted.
The American Society of Civil Engineers gives America a grade of D+ for infrastructure and estimates congestion on highways costs the economy $101 billion annually in wasted time and fuel. A study of American bridges found that more than 66,000 in America are structurally deficient; laid end to end, the deficient ones would reach from Canada to Mexico.
Yet on the campaign trail, its a brave politician who acknowledges that taxes have their uses. Around July Fourth, we should be able to celebrate that some of our greatest national achievements arent tax cuts but public investments:
America was the first country to invest in mass elementary education for boys and girls, then in high schools, and then in widespread college education. As Claudia Goldin and Lawrence Katz of Harvard have argued, this may be the best explanation for Americas rise to global pre-eminence.
The United States invested in the electrical grid, with public projects like the Tennessee Valley Authority and rural electrification. These hugely raised living standards and economic output.
President Dwight Eisenhower, who had been part of an army convoy that took 62 days to cross the United States on wretched roads, invested in the 1950s in the interstate highway system. The interstates knitted together the country and created huge economic efficiencies.
These were visionary schemes that, if newly proposed today, might not get off the ground. Our schools have tumbled by global standards, we havent ensured access to the Internet the way we did to the electrical grid, and our highway trust fund is almost broke.
So, on Independence Day, lets celebrate a heritage not just of opposing taxation without representation, but also of wise public investment. In the 1790s, President George Washington and other patriots crushed the Whiskey Rebellion, a progenitor of modern anti-tax crusades. Its time for patriots again to defend reasonable taxes.
The ratio of tax to GDP has changed little in the United States in the last six decades. Other countries, as they grew richer, chose to increase taxes and services, but the United States has resisted that trend and is now near the bottom of the pack of industrialized countries in taxation levels, notes Andrea Louise Campbell, a political scientist at the Massachusetts Institute of Technology.
The wealthy, in particular, pay low income taxes in the United States. And loopholes mean that the corporate tax burden is lower in the United States than among our peers.
So as we celebrate July Fourth, lets get real about government. Sure, tax money is sometimes squandered, as is money in business. But what strengthens us as a nation is often investments in public goods that benefit all Americans and, after all, theres not much point in saving on taxes to buy a Porsche when the roads all have potholes.
Our schools have tumbled by global standards.