Main Economics Writer Says High Taxes Are Necessary for Modern Society

High taxes are a societal imperative, says the Times' economics conscience, David Leonhardt: "And taxes are supposed to rise as a country grows richer."

Economics writer David Leonhardt is the Times' neo-liberal conscience on economic matters. During the campaign, boosted Obama during the campaign by defending him as a fiscal conservative.

In his latest column on Wednesday, with the unintentionally revealing title "Partisan Economics In Action," he celebrated economist Bruce Bartlett, a self-identified conservative who nonetheless supports raising taxes.

Successful economic ideas usually end up being taken too far.

Democrats dominated the middle part of the 20th century, thanks in part to their vigorous response tothe Great Depression. They used the government to soften the effects of the Depression and to build the modern safety net. But they failed to see the limits of the government's ability to manage the economy and helped usher in the stagflation of the 1970s.

Ronald Reaganthen came to power promising to cut taxes and unleash the forces of the market. And the Democrats spent the next dozen years struggling to absorb the lessons of their failures.

More than a few people believe the Republican Partyis in a similar place today.

When I askedDale Jorgenson, the eminent expert on productivity (and a Republican), what had been the positive aspects of PresidentGeorge W. Bush's economic policy, Mr. Jorgenson said, "I don't see any redeeming features, unfortunately." After Republicans opposed thestimulus packagethis year, The Financial Times, not exactly a liberal organ,calledthe party's ideology harebrained. When Olympia Snowe was recently explaining why she might be the only Republican senator to vote for health reform, she suggestedit was because her party had moved so far to the right.

Leonhardt cited Bartlett at length as the "most...thought-provoking - conservative critic of the party, someone who "thinks that the Republican Party no longer has a credible economic policy. It continues to advocate tax cuts even though the recent Bush tax cuts led to only mediocre economic growth and huge deficits."

Leonhardt made high taxes sound like a moral imperative:

And taxes are supposed to rise as a country grows richer. This is Wagner's Law, named for the 19th-century economist Adolf Wagner, who coined it. As societies become more affluent, people demand more services that governments tend to provide, like health care, education and a strong military. A century ago, federal taxes equaled just a few percent of G.D.P. The country wasn't better off than it is today.

Ramesh Ponnuru went after Leonhardt's logic in a post on National Review Online, arguing that "Leonhardt commits several misjudgments in his piece."

Ponnuru reminded us that the GOP "did not take pride in" the first President Bush's tax increase in 1990:

Bush campaigned in 1988 on opposition to tax increases, much of his party revolted when he broke his promise, and while running for re-election Bush said it had been a mistake.

And he accused Leonhardt of having a "skewed version of our recent history" on tax cuts and tax increases when he argued that the Reagan tax cuts didn't help economic growth:

Reagan's tax cut wasn't fully implemented until 1983, for example; the recovery of the 1990s was underway before Clinton took office, and we didn't get four years of solid four percent growth until the start of 1997.

Ponnurualso ridiculed Leonhardt's observation that "one of the country's two political parties has no answer to an enormous economic issue - the fact that the federal government cannot pay for its obligations," saying "Neither party has an answer to this problem. The Democrats have proposed some tax increases, but they do not come close to balancing the budget over the long run - and they have also proposed a substantial increase in federal health-care spending."