The Economy is a Competition

So the Heritage Foundation has just hired the astonishingly clueless Stephen Moore to be it's chief economist.  For example, here's Moore completely embarrassing himself on Chris Hayes' MSNBC show--yet his fans somehow think he made a sensible case.  Moore is arguing that rich liberals want their taxes to go up, yet are hypocrites for not paying more than they owe.   That's just silly.  It's bad economics and completely innumerate.  Rich liberals are like anybody else.  They want to pay the lowest taxes they can get away with.

The economy is a competition.  Like all competitions, it has rules.  If we all play by the same rules, the game is fair.  If it's a "three legged race", and everybody's legs are tied together in the same way, it's fair, but if some people are running on their own two legs while others are tied together, it's not.  In the same way, if I voluntarily pay more taxes than my neighbor, I have given myself a disadvantage.  But if the tax law takes it away, approximately equally, from everybody, nobody has a disadvantage.

In sports, some people have advantages, and we have rules to keep things fair.  We don't let teams of  adult athletes compete on an equal footing with small children.  250 pound giants don't compete on an equal footing with 98 pounders in wrestling, weightlifting, and a number of other sports.  In the economy, we build in advantages for some people who have an analogous built in disadvantage:  the marginal tax rate for rich people is higher than it is for poor.  We give the poor subsidies for food, housing, education.   In sports, nobody questions whether this is fair.  But Moore thinks it shouldn't matter exactly where it matters most.

This nonsense hurts us at a lot of levels.  For example, states (and countries and smaller entities) are constantly competing with each other for business.  If a state has a lower tax rate, businesses are a little more likely to relocate there.  But if they do it at the expense of roads, education, and other services, it's a false economy.  Businesses need these things, but they're hoping to get somebody else to pay for them.   For a little while, they can skate by on the good planning from the past.  But not for long.

Each individual business is hoping it can get away with not paying for the services it uses--explicitly in the case of roads, or implicitly, as in education.  So they hire people like Moore to make the case that not paying is sensible, and hope that enough people aren't paying attention that they can get away with it.   And sure enough, they've been winning elections.  They like it when the umpires are on their side.