We're currently hosting our discussions at Café Walnut, near the corner of 7th & Walnut in Olde City, just across the street from Washington Square Park. The cafe's entrance is below street level down some stairs, which can be confusing if it's your first time. Our group meets in the large room upstairs.
Since we're using the cafe's space, they ask that each person attending the meetup at least purchase a drink or snack. Please don't bring any food or drinks from outside.
The cafe is fairly easy to get to if you're using public transit. With SEPTA, take the Market-Frankford Line & get off at the 5th Street Station (corner of 5th & Market), and walk 2 blocks south on 5th and then turn right on Walnut Street and walk 2 blocks west. With PATCO, just get off at the 9th-10th & Locust stop and walk 3 blocks east & 1 block north. For those who are driving, I'd suggest parking in the Washington Square parking deck at 249 S 6th Street which is just a half block away.
HOW SHOULD WE THINK ABOUT TAXES?
INTRODUCTION:
In honor of Tax Day which is tomorrow - and we hope you’re done - we’ll be discussing tax policy. I swear, it’s actually more interesting than you think!
In this group discussion. we'll look at the perspectives that 4 different fields offer us on the issue of taxation:
PART 1:
In the first part of the discussion, we'll look at the moral & political philosophy of taxation and ask whether taxes are akin to "legalized theft" as anarchists claim, or rather a "civic duty" and "the price we pay for civilized society". Is there a "social contract" that requires us to pay taxes? If so, how much taxation is just?
We'll look at how the US Constitution's "Taxing & Spending Clause" allows Congress to levy taxes for 3 purposes only - to repay government debt, common defense & general welfare. But does debt rob future generations? Does "defense" justify foreign wars? Does "general welfare" justify redistribution or only public works?
We'll discuss the moral justifications for taxation, both for how the taxes are collected & how they're spent. These fall into roughly 7 categories:
- User Fee: people should pay for state infrastructure or services they use (e.g. toll roads, postal service)
- Value Capture (Georgism): people should pay for the "positive externalities" they get from the state's provision of public goods like infrastructure, law enforcement, education (e.g. land value tax)
- Social Cost Absorption: people should pay for "negative externalities" they impose on society (e.g. pollution taxes)
- Paternalism: the state should use taxes to deter immoral/harmful behavior (e.g. sin taxes, luxury taxes) and to promote moral/prudent behavior that people might neglect (e.g. social security, individual mandate)
- Redistribution (Rawlsianism): the rich should be taxed (e.g. estate tax) to help the poor
- Protectionism: imports should be taxed to protect domestic producers
- Keynesianism: a public emergency like a war or recession may require deficit spending financed by monetary expansion (i.e. inflation tax) and/or debt that must be repaid through future taxes
PART 2:
In the second part of the discussion, we'll discuss "optimal tax theory" from economics. We'll start by reviewing Adam Smith's 4 "canons of taxation" (equity, convenience, certainty, efficiency) and 5 additional "canons" suggested by later economists.
Then we'll look at the "deadweight loss" (loss of economic efficiency) incurred by different types of taxes, why land value taxes could theoretically have zero deadweight loss, and how "Pigouvian taxes" (taxes on negative externalities) could improve the economy.
We'll then cover the "Laffer Curve" which explains why tax cuts could theoretically pay for themselves but often don't, and "Hauser's Law" which helps explain why tax increases don't always bring in alot more revenue. These concepts will give us some insight into how the experts evaluate tax policies.
PART 3:
In the third part of our discussion, we'll look at the psychology of taxation and try to get a sense of how the average person thinks about taxes, and how this differs from the way moral philosopher & economists think. Research has uncovered 6 factors that influence individuals' perception of their tax burden and its effect on their economic decisions: (1) perception of marginal tax rates, (2) tax complexity, (3) tax (dis-)incentives to work, (4) tax salience, (5) tax morale & perceived fairness, and (6) perceived inflation & the "money illusion". These are important because public perception of taxes constrains tax policy in a democracy.
PART 4:
In the fourth section of the discussion, we'll take a political science approach and look at how tax bills are affected by the political process and how voters respond to tax hikes & cuts, as well as gov't spending hikes & cuts. We'll consider if "Wagner's Law" holds true - i.e. does state spending inevitably increase as people vote for more social services as general income levels rise. We'll also see if this trend tapers off or reverses if/when social solidarity decreases due to immigration.
We'll finish up by looking at what current polling tells us about Americans' tax preferences and how this might affect the electability of politicians running on high-tax & low-tax platforms.
RELEVANT MATERIAL FROM PAST MEETUPS:
Back in August of 2017, we had a meetup entitled "Classical Liberalism & Property Rights" and in Part 4 we addressed the question of whether taxation is "theft" and if not what can tax revenue legitimately be spent on - redistribution or only defense & public goods:
https://www.meetup.com/Philadelphia-Political-Agnostics/events/242037334/
In May of 2018, we had a meetup entitled "Does America Offer Equal Opportunity?" and the Intro section dealt with different ethical conceptions of equality & why some of them (notably John Rawls' "difference principle") justify taxation for economic redistribution:
https://www.meetup.com/Philadelphia-Political-Agnostics/events/xvbrznyxgbtb/
In February of 2018, we had a meetup entitled "Political Science & Political Myths", and in the 4th section we looked at Thomas Frank's argument that the white working class votes is tricked by Republicans into voting against its economic self-interest, such as cutting taxes for the rich. Many political scientists, notably Larry Bartels & Andrew Gelman, have disputed the details of Frank's account:
https://www.meetup.com/Philly-Skeptics/events/241726423/
