In the Democratic presidential primary debate Wednesday night, some candidates turned Obama's famous 2008 slogan on its head. Instead of "yes we can," a visibly-vibrating Senator Amy Klobuchar and others lectured the other candidates about what America could not have.
For example, Klobuchar said she supports only a three-month paid family leave policy instead of a six-month version because "I just am not going to go for things... just cause they sound good on a bumper sticker and then throw in a free car." It's of a piece with her previous argument that she can't support tuition-free college because it costs too much. "If I was a magic genie and could give that to everyone and we could afford it, I would," she said.
It's an attractive pose for a certain kind of performatively austere moderate liberal, especially one from the Midwest. But it's complete nonsense. America could have the comfiest welfare state in the world. And Democrats really need to ditch this pathological and frankly bizarre unwillingness to hand out nice goodies to the American people.
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First, let's consider one actual example of paid leave. Washington, D.C. recently started collecting a new tax for such a program, which will provide eight weeks of state-funded leave for new parents, six weeks to care for a sick family member, and two weeks for personal illness. This is funded by a whopping employer-side payroll tax of ... 0.62 percent.
Now, D.C. is somewhat different from most states, but this gives a general rough sense of what a two-month paid family leave program (plus some other goodies) would cost, and hence what a three- or six-month program would cost — roughly 50 percent more or three times more. If we thought it was necessary to establish a dollar-for-dollar funding stream, it certainly wouldn't take more than a payroll tax in the low single-digit neighborhood.
This leads directly into the broader truth that the overall level of formal tax revenue in the United States is far, far below that of cutting-edge European countries. Tax revenue only accounted for about 34 percent of GDP in the U.S. in 2017, as compared to 51 percent in Sweden and 55 percent in Norway. Raising the tax level up to Norway's level would provide something like 4 trillion dollars to play with.
In other words, the United States has a stupendous amount of room to raise taxes. We could have a two-year paid family leave policy if we wanted and still have enough leftover for a half-dozen minor goodies of your choice without even getting close to Nordic tax levels.
Then on the other hand, America also has a bloated military budget. We directed $716 billion to the Pentagon in 2019 — an $80 billion increase from the previous year. (Incidentally, just that increase would be enough to fund the free tuition for all public colleges and universities that Klobuchar says would be too much to stomach. You'll never guess who voted for that increase.) Furthermore, a recent study found that the post-9/11 wars in the Middle East and Asia have incurred a budgetary cost of $6.4 trillion, when taking both direct spending and future promised commitments into account.
Oddly enough, there were precisely zero special tax levies to fund a cool $6 trillion in imperialist wars of aggression, nor were there any to pay for either George W. Bush's or Donald Trump's tax cuts for the rich. If it were really true, as Klobuchar's campaign wrote on Twitter during the debate, that Democrats much "be honest about what we can pay for," then all of those things should have led to economic disaster. That they did not proves that it is not really necessary to precisely fund every single dollar of government spending with new tax revenue. The United States is the most creditworthy institution in the world, if for no other reason than if we cannot pay our debts, then nobody else will be able to either.
Now, taxes are necessary and good, both to prevent unduly subsidizing the rich through interest payments on the national debt, and to keep down inflationary pressure. But the point is that we don't need to flip out about it. We can figure out what kind of country we want to live in, how much extra borrowing (or money-printing) capacity we have, and from there dial in a tax level commensurate with our needs. It really is not rocket science.
America is a nation quite literally drowning in wealth. We have world-class levels of economic productivity and few of the luxurious benefits which are supposed to be the point of getting rich in the first place — a nation of people burning up their finite lifespans in pointless toil, with far too little time to relax or raise a family. All we have to do to create such a place is ignore the Klobuchars of the world and take it.
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