Conservatives typically look to shrink the role of the state. Their favourite tool of choice is the reduction of revenues through tax cuts. The theory appears to be that a reduction in tax revenue will lead to the elimination of the services that are not essential to the operation of the state. This is in many ways a perverse application of the principles of the free market system. Not only does it not work as planned, it frequently results in structural budgetary deficits.
Liberals tend to look at increasing the role of the state. They see the state as a tool for ensuring the well being of the populace. Their favourite tool of choice is the introduction of new services or regulations, with a corresponding increase in revenue from taxation. The theory appears to be that centralized management can be efficient. This is in many ways wilful ignorance of the merits of the free market system. Not only does it not work as planned, unbridled growth of taxation is an impediment to economic growth.
By and large, that’s a capsule summary of politics in the West. Two diametrically opposed, equally incorrect, deeply flawed models for government, alternately taking control of the apparatus of the state, making a set of ill-informed changes before being turfed out by dissatisfied voters to let the other side repeat the process from the opposite perspective.
This is an unstable system that will never reach equilibrium.
The fundamental issue is one of semantics. So let’s start with an axiom: nobody enjoys paying taxes. Aside from extremists who either envision a magic state that functions in the absence of revenue or an equally improbable state that functions in the absence of variable rewards for variable work/value, most of us accept that some level of taxation is inevitable. The problem is that we think about taxes in absolute terms — usually as a percentage of our income or assets. It seems to be that both liberals and conservatives could find a lot more common ground if the discussion was framed in terms of Return on Taxation, much like business measures Return on Investment.
Surely everyone, left or right, wants to ensure that their tax dollars are used to achieve the greatest value.
While it is true that this approach will generate ongoing argument on which methods should be used to arrive at a measurement of “return”, my suspicion is that liberals and conservatives will find that when viewed through the lens of value, their policies will be less divergent. In an ideal scenario, we can focus our efforts on getting more value per tax dollar and adopt more rational — and stable — policies.
The left and right seem to find it increasingly difficult to find common ground, but it is only by doing so that a democratic system can function effectively. Let’s make Return on Taxation the objective we all share.