Tax and Spend: A new column on the value of collective action

Hello! My name is Eric Bernstein and I’ve been a regular opinion contributor at the Minnesota Reformer since 2021, writing on issues related to taxes, public spending and the economy. This month, Editor-in-chief Patrick Coolican granted me the honor of a named column, so I wanted to take this opportunity to introduce myself as well as the concept for this series.

Consider this the first installment of “Tax and Spend.” 

The name is an intentional provocation. At first glance, it conjures a negative connotation of burdensome taxes and government waste. But reflect on it for a moment and you might notice the total lack of substance. 

After all, what else would we do with taxes but spend them? The phrase offers no comment on the burden of tax collection or the value of the spending, and yet it is accepted as a damning critique of government action.

I think that is a helpful metaphor for commonly held attitudes towards taxation in general: We harbor an instinctive aversion to taxes but don’t pause to consider the value we receive in return. From roads and schools to health care and emergency response, the truth is that everyone depends on the public goods and services that our tax dollars pay for, and we take for granted a great many public needs that are satisfied through government intervention.

My goal in writing this column is to call into question the individualistic paradigm that dominates our politics and culture, and to present a value proposition for collective action. As individuals, we cannot buy better schools, cleaner air, or safer streets. And we all suffer when our neighbors are unhoused, hungry, poorly educated, or otherwise uncared for.

To me, this seems like an inoffensive observation, but in today’s political environment it is far from the norm. The United States, as I have often reminded Reformer readers, is the lowest-spending wealthy country on Earth. We have the weakest social safety net, the smallest stock of public housing, the greatest barriers to attaining a college education, and a health care system that manages to be both expensive and bloated while leaving millions without care.  

Under-investment hurts us not just in the direct sense of struggling to access basic social needs, but through the creation of a great many downstream problems. Homelessness, which is a daily reality in America but scarce in every other developed nation, is perhaps the most glaring example: Studies have shown our unhoused population costs hundreds of millions of dollars per year in uncovered emergency room visits, criminal justice action, and other public responses. And that’s to say nothing of the prosperity sacrificed from lost human potential.

Even in relatively high-tax Minnesota, public spending has declined compared to total economic output over recent decades. And yet we are told repeatedly that our taxes are too high, and that prosperity will come only when we finally give up on this shared project called society.

These trickle-down, anti-tax arguments have failed for decades, but they persist because many political practitioners tell us that to argue in favor of taxes and spending is political suicide. I don’t think that’s true and I think it’s time to dispel with this tiresome cliché.

So let me be upfront and state clearly that I believe we need higher taxes to pay for more investment in public goods and services. That is a basic premise of my analysis and it is one I will discuss and defend often in this column. 

But I will also try my best to be an honest dealer — and that includes admitting that many of the dollars we spend do not have the desired effect. Let me assure you: No one wants the government to work more than the guy whose career is spent defending it.

For the same reason I believe in public spending, I am very bothered by the thought of waste, fraud, or exceptional inefficiency. These sorts of failures are not only a violation of public trust, but represent lost potential for social betterment.

Years of policy study have taught me that the story of government failure is rarely ineptitude and extravagance: A great amount of waste is rooted in attempts to limit government functions. For this reason, I am not a fan of public funds going to private institutions, ineffective incentive campaigns, or the great deal of bureaucracy that is created by means-tested programs. 

But that’s a case I will have to make, and it would be foolish to discount public skepticism. 

In a recent poll, the Tax Foundation found that 63% of Americans feel that they do not get a good value for their federal tax dollars. The same poll also found broad support for higher taxes on the rich, as well as widespread misconceptions about the actual mechanics of our federal tax system.

Underlying those perspectives is one thing we can all agree on: Something is going wrong in American society. Our GDP is larger, but every day we are confronted with more evidence of how our wealth does not translate into a better society. We are more atomized, more polarized, and we are both dying younger and living less happily than other comparable countries. 

And yet, every day the light turns green and water comes out of the tap. We gather in public parks and children laugh and learn in our schools. Those social goods all come from decisions we made together.

I think we should all want better for our fellow Americans and our neighbors here in Minnesota. But regardless of what change is needed, it will have to be a collective one.

My goal in this column is to inform a helpful discussion of these challenges and contradictions. I hope you will follow along and please always feel free to reach out to me with questions or comments. 

Thanks for reading,

EHB

Editor’s note: Send Eric an email.