David Brooks on Our Form of Big Government

Brooks offends our pride by reminding us that the American level of social spending is the same as Europe’s.  The difference is the method.  The Europeans use taxes to fund public programs.  The characteristically American form of public generosity is tax breaks.  Brooks claims America is Europe, if we think about it.

That’s an exaggeration.  There’s a pretty big difference between helping parents through public daycare and through child and childcare tax credits.  The latter keeps a lot more control in the hands of parents, although sticking them with the burden of choice.  The latter, of course, is also a stimulus package for all kinds of private enterprises.  Brooks does well, in effect, to remind us of how generous the Bush taxes were to struggling famiies. A parent or parents who make 60K and have three kids pay no income tax right now.  Brooks also reminds us of the justice of the thought that some people sustain our future primarily through money, others primarily through kids.

The tax deduction for charitable donations, of course, is also a huge force for good.  Our country, for example, has a lot more educational diversity than Europe.  We have all sorts of religious and other private schools basically bankrolled by rich guys who wouldn’t be nearly so generous witout this very significant tax incentive.  (The picture accompanying this post is of my Berry College, blessed—partly through this government encouragement—with a huge endowment.)

A similar benefit flows from the tax exemption to religious institutions, which perform all kinds of functions that would be left to direct government provision otherwise.

Other tax breaks are perverse.  Our employer-based health care system is based on the historical accident of the tax break to employers who provide it.  That system is hard on ordinary self-employed people and discourages entrepreneurial risk.  The self-employed guy has to find his own insurance at a high rate.  And people fear giving up their jobs to go out on their own because they can’t afford to surrender the great insurance their present employer offers them.  This tax break is basically regressive—or mainly for the prosperous and not widely enjoyed by the poor and the struggling.

Which of our political parties is for doing something about this tax-based foundation of our employer-based health care?  In public, neither!  The Republicans say they oppose ObamaCare because it will wreck our present system.  The Democrats assure us that ObamaCare will allow everyone who has employer-based insurance to keep it.

It goes without saying that in private leaders of both parties know better.