Six Wasted Syllables (for Paul Price)

On the Atlantic's Business Channel, Chris Good posts about the return of Bobby Jindal, noting that, given his expertise in health care policy, Jindal has taken advantage of the current debate over President Obama's proposed health care reform to tiptoe back into the national spotlight, now that memories of his awful response to the President's speech have faded. Good also links to Jindal's op/ed about health care policy in today's Wall Street Journal, "How to Make Health-Care Reform Bipartisan". One paragraph from Jindal's op/ed prompted the title of this post:

•Refundable tax credits. Low-income working Americans without health insurance should get help in buying private coverage through a refundable tax credit. This is preferable to building a separate, government-run health-care plan.

What would William Strunk, Jr. have called "refundable tax credits", if such a thing existed in his time? I'm guessing he'd call them what they are: "grants". I'm not sure why Jindal and other conservatives persist in wasting an additional six syllables on the longer euphemism. Perhaps it's so they can characterize government spending on such grants as tax relief instead of government spending, but, if so, this bit of obfuscation just plays into liberals' rhetoric on progressive tax policy. Most liberals are happy to characterize transfer payments to low-income Americans as tax relief, and to characterize tax cuts for the wealthy as a form of government spending. There doesn't seem to be much benefit to conservatives in conceding the rhetorical and policy ground on this, particularly since, as some smart centrists (e.g., Clive Crook) and even at least one smart liberal (Matt Yglesias) acknowledge, we are approaching the point of diminishing returns when it comes to increasing the progressivity of our tax system.

As both men have noted, if American liberals want to expand the welfare state raising taxes on the rich, by itself, won't be enough to pay for it; they'll have to raise taxes (by at least a modest amount) on everyone else. Yglesias has noted that countries such as Sweden, which have social safety nets envied by American liberals, also have much more regressive taxes than we do.

Becoming Sweden

I'm not a frequent viewer of The Daily Show, but I have to give a little credit where credit is due. By suggesting that if certain liberal policies are enacted we'll be in danger of "turning into Sweden", some conservative commentators floated a big softball over the plate. The Daily Show took a swing at that softball with the video below. This is pretty funny, so let it play first. I'll leave a few more comments below the video.

The Daily Show With Jon Stewart	M - Th 11p / 10c
The Stockholm Syndrome
thedailyshow.com
Daily Show Full Episodes Economic Crisis First 100 Days

The conservative pundits warning about Sweden missed two obvious points. The first is that, as the video above shows, Sweden seems like a pretty nice place. Better to invoke the specter of a not-so-nice place when warning of the potential consequences of enacting liberal policies. The second point is that even if our tax burden and our government spending as a share of our economy were as high as Sweden's, that wouldn't make us like Sweden. Sweden is known for (among other things) honest, effective government. As Wolfgang Münchau of the Financial Times has noted, Italians have a tax burden similar to that of the Swedes, but get far less effective government from it. Similarly, invidious comparisons between us and Sweden (e.g., the international education comparisons brought up by The Atlantic when they posted on this Daily Show video) are specious because of the homogeneity of Sweden's population. There is a non-trivial number of Americans of Swedish ancestry; I'd bet they'd do fine in any objective comparison with their cousins in Sweden, if anyone wants to compare apples to apples.

Instead of ominously warning that we're in danger of turning into a pleasant European country if certain liberal policies are enacted, conservatives would be smarter to point out that, regardless of what policies are enacted here, we'll still be Americans, and this will still be America. We need to keep our differences in mind when considering policies: e.g., as we suggested in a recent post, the sort of energy policy that works for a small country that juts out into the North Sea might not work for another country that spans a continent.

Another thought: the bit at the end of the video with the Swedish pop star was a cleverly chosen example of Swedish egalitarianism, but it's worth noting that Sweden has produced its share of extreme wealth as well. For example, the Swede Ingvar Kamprad, the founder of Ikea, is listed as the fifth-richest man on this year's Forbes list of billionaires (Kamprad moved to Switzerland though, presumably at least partly for tax purposes). One nice touch in that video was the inclusion of the ominous theme from Dune. You can hear more of that theme at about 40 seconds into the trailer below: