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IF ONLY A FEW PEOPLE PAY TAXES, WHAT HAPPENS WHEN THEY DON'T?

January 16, 2006

I've occasionally talked about the civic unwisdom of removing more and more people from the tax rolls. As more people lose their responsibility for paying for government, they also lose any stake in restraining spending.

A discussion of California taxes also points to a more practical problem: revenues from a small group of wealthy taxpayers will be more volatile than revenue from a wider base of taxpayers. Mickey Kaus explains:

Basically, if the rich have a bad year, the state's in trouble. That's what happened, A.L. points out, between 2000 and 2002. ... It certainly doesn't seem like good policy to tie the fate of schools, roads, sewers, hospitals, police etc. so closely to the success of a few mansion-generating sectors, in particular the entertainment industry--especially this year.

The TaxProf rounds up other blog commentary.

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