Jonah Goldberg, Anti-Maldistributionist
[Conservatives like to claim] the American tax code... does such a great job (which is to say dastardly job, in Goldberg's view) of redistributing income and wealth--of robbing Peter to pay Paul. Again, this is an empirical issue, not merely a conveniently assertable talking point, which means we can examine just how redistributive America is relative to comparable nations.
Back we go to the OECD data. The above figure reports, for all OECD nations during the mid-2000s*, the Gini Coefficient before taxes and transfers. For those unfamiliar with the Gini Coefficient, it is a measure of the distribution of income (or wealth), bounded between 0 and 1, with zero meaning equal distribution across all citizens and 1 meaning that all the income/wealth belongs to the one, richest person. That is, the lower the number the more evenly--though not necessarily fairly, which is a normative judgment for each person to make for herself--income is distributed prior to (or after) government activity in the form of taxes and/or transfers.
As you can see, the before-taxes-and-transfers Gini Coefficient for the United States (.46) is very close to the average for all nations of the OECD (.45). Put another way, the ex ante maldistribution of income here is about the same as for comparable nations. To see what the net effect of those government policies are, we need to look next at the after-tax-and-transfer Gini Coefficients.
And what do you know? As shown in the second figure, which reports after-tax-and-transfer income distribution, of the 26 OECD countries the United States has the most maldistributed income of all 26. This doesn't mean that tax and transfer policies don't redistribute; they do, which is why the after-t+t coefficient of .38 is lower than the pre-t+t coefficient of .46.
But that's not particularly redistributive. In effect, Jonah Goldberg is complaining about the dangers of redistribution in the least redistributive first world nation. Tax-wise, he would be doing much worse as a columnist/author/speaker in almost any other country. But why let that stop him from complaining?
Allow me let me summarize my frustrations with how conservatives like Goldberg (not all of conservatives, of course) talk about taxes, redistribution, the size of government, it's effectiveness and efficiency:
1. Dollar for dollar, America offers the most effective and efficient government on the planet, doing so for about 20 cents on the dollar nationally, 28 cents if you include state and local taxes. If you ask a conservative to name a country that provides as many quality services for less, or more and better services for the same price, they can't name one. If they do, encourage them to start packing their bags...
2. American government is redistributive, but not to the degree to which boogeyman conservatives would have us believe. Again, look at the two charts above. We're clean and lean, but if you believe in sharing the wealth, comparatively we're also pretty mean....
4. It's just a myth that all this American "socialism" will only constrain our growth, turning us into one of those laggard western European nanny states. There is way too much to cover here, so I'll just point to Jon Chait's recent takedown in the New Republic of conservative Jim Manzi's supposed case-closed case for why America's smaller government produces higher growth rates."
LINK
Bonus, from an article the day before
Note that America isn't the lowest, but we are fifth lowest and our share (28 percent, which includes state/local taxes) is 20 percent lower than the OECD average of about 35 percent. Now I remember why I hate traveling through Europe: It's the widespread slavery that so offends.
Goldberg concedes that he knows that federal taxes as a share of GDP in America have held steady since 1950 at around 20 percent. OK, so what he must really be upset about is how that tax bill is distributed, right? Yes, he carps that those with the highest incomes pay a disproportionate share. But that doesn't mean income taxes account today for a higher share of GDP than they did in the past.
And in fact, as the data above from the Tax Policy Center show, income taxes as a share of GDP have held steady during the same time period."
Last edited by Savonarola, 20100408 2309: replaced giant picture with thumbnail and link