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Matthew Yglesias » Taxes and Mandates

by myglesias

Well, hold on a second, George. Here — here’s what’s happening. You and I are both paying $900 bucks on average — our families — in higher premiums because of uncompensated care. Now, what I’ve said is that, if you can’t afford health insurance, you certainly shouldn’t be punished for that. That’s just piling on. If, on the other hand, we’re giving tax credits — we’ve set up an exchange, you are now part of a big pool, we’ve driven down the costs, we’ve done everything we can, and you actually can afford health insurance, but you’ve just decided, You know what? I want to take my chances, and then you get hit by a bus, and you and I have to pay for the emergency room care, that’s…

What it’s saying is, is that we’re not going to have other people carrying your burdens for you any more than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase. People say to themselves, that is a fair way to make sure that, if you hit my car, that I’m not covering all the costs .

Not being a politicians, I can just note that we generally speak the English language in the United States and we’ve never previously taken the word “tax” to include all regulations that increase some people’s costs of buying stuff. Nobody says, for example, that a minimum parking regulation on new development is “really” a tax on non-drivers or that the Americans With Disabilities Act is “really” a tax on people who aren’t in wheelchairs.

That said, the kernel of a good point lurking in these question is that realistically the practical alternative to higher taxes is often more regulation. And in particular one major consequence of the extreme aversion to taxation embedded in the American political culture is that it creates large incentives for politicians to try to do things through regulatory mandates rather than taxes. One of the major sources of the political appeal of cap and trade is that it’s not a tax. Conversely, one of the major elements of the campaign against cap and trade is to try to insist that it should be called “cap and tax.” This is ultimately a very destructive way of talking about politics—it’s simply not the case that it’s in general preferable to do things through regulation rather than through taxes and spending. Oftentimes the most efficient way to have the government accomplish something is to just charge taxes and spend the money.

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