The Hypocritical Oath?

Wall Street Journal editor Stephen Moore recently called me a hypocrite because I am a rich American who favors higher taxes on the wealthy yet do not voluntarily pay more to the federal government than I legally owe. Mr. Moore wishes he "had a dollar for every time a wealthy liberal has declared he thinks he should pay more taxes," a wish I would be happy to oblige if he gave me a dollar for every time a wealthy conservative has declared he pays too much. While he notes that there are "patriotic reasons for strongly opposing higher tax rates," it is quite obvious that wealthy conservatives like Mr. Moore have compelling personal reasons for opposing them, too, and hence perfectly understandable why they might want to counter the perception that they are merely selfish and greedy by trying to impugn the character of those who disagree with them rather than focusing on the substance of our position.

So to be clear, I acknowledge that many opponents of higher taxes -- even rich ones -- legitimately believe that low taxes on the wealthy benefit all Americans. But I think that the claim that anybody who favors higher taxes is morally obliged to pay more than they legally owe shows a fundamental misconception about the basis for the social compact we call government.

The primary role of government is to provide public goods and services -- things that benefit all citizens but that commercial markets cannot or will not provide. While Ron Paul questions the size of the military, even he acknowledges that some level of defense spending is necessary to keep Americans safe, and most people go further in including things like the transportation system and public education as collective goods which benefit society as a whole.

Mr. Moore comments that some collective goods can be paid for voluntarily. Well, sure: as a resident of a wealthy suburb, I know that my neighbors are happy to donate money to the local public schools attended by their own children. But I wouldn't count on this largesse paying for school systems in nearby, poorer towns (just consider the long and tangled history of public school funding in my home state of New Jersey).

Game theorists have spent decades studying social dilemmas like this, when there is a cost to creating something which benefits all members of a community. Dozens of experiments have shown that when people have an opportunity to "free ride" by not contributing but still benefiting from the contributions of others, social cooperation will often be initially observed but then tends to break down with the end result that nobody contributes, and hence nobody benefits.

In fact, standard economic theory says that since it is perfectly rational to free ride, nobody will ever contribute to a public good in the absence of coercion. Fortunately, empirical evidence demonstrates that economists misunderstand human nature, since the majority of subjects in public goods experiments are not free riders but "conditional cooperators," willing to contribute as long as everybody else does, too.

So I feel no need to apologize for only paying what I owe in taxes -- I'm a human, not a saint (though I feel compelled to note that over the last five years, I have given an average of over 11% of my income to various charities). Why should I let rich conservatives like Mr. Moore free ride on my contributions? Are they willing to forgo the benefits of public goods like national defense?

After decades of failing to pay for the costs of government, the United States faces difficult choices. Avoiding disaster will require sacrifices from all Americans, and I personally think that the wealthy should be the first to contribute. But while I consider myself deeply patriotic, I don't think that wealthy liberals should bear that burden alone.