The Real Costs of Education

The Real Costs of Education

Many on the left are befuddled by the American public’s staunch resistance to taxes— a seemingly irrational hostility that often paralyzes public policy. Americans are convinced that they are overtaxed, although their tax burden is lower than those of other major industrialized nations. Health care reform was stymied in part because of unreasoning opposition to expansion of any government program—there’s a (perhaps apocryphal) story of the senior citizen who protested to President Clinton about his plan for a “government takeover of Medicare.” Even Clinton’s plan to “end welfare as we know it” has floundered because of the political impossi- bility of raising new taxes for child care, training, and public service jobs.

Americans’ feelings about taxes are fed by our culture’s deeply-rooted individualism and anti-collectivist impulses, but they are not entirely irrational. They are based on real economic phenomena that are easily misunderstood. We do pay higher taxes and receive public services whose quality does not improve commensurate with our higher payments. In the last quarter century, government spending has jumped from 26 percent to 31 percent of our gross national product, while schools are not noticeably better, police protection has apparently declined, mail is delivered less often, streets are dirtier, and roads have deteriorated. Yet few Americans realize that over the long run we must pay a greater share of our incomes in taxes simply to maintain a constant level of government services. If, as in recent years, taxes increase too slowly, public services must deteriorate.

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Lima