Against the War Tax

Representative David Obey’s Share Our Sacrifice Act would finance the war in Afghanistan by imposing a tax on the public.  The idea is yet another in a line of gimmicky populist measures that are sprouting like dandelions this political season, and it has garnered the support of apparently sensible people.  But it has little to recommend it.

One of the Economist’s bloggers says “it’s a very bad idea to get involved in a long, grueling, expensive war without explaining to the American people how much they will have to sacrifice, and securing their support.”  But the War Tax doesn’t explain anything and, as the author says elsewhere, would only reduce their support for the war.  The Economist cites Spencer Ackerman who notes “the military lament that only a select and small proportion of the country is actually at war.”  But soldiers volunteer for service; no one is required to join the military.  If the argument were that soldiers are underpaid and should have higher wages, or that the dependents of soldiers who are killed should receive more generous benefits, it would be possible to sympathize.  The only effect of the war tax would be to raise revenues for the government, which could use them for additional spending or to pay down the debt.  The war will go on, however the revenues are used.

It is possible that the Afghanistan War is a bad idea; if so, the remedy is to end the war, not to raise taxes.  If it is a good idea, the benefits will accrue to the inhabitants of the future, who will be protected from terrorists and other baddies, not us.  We perform a benefit for the future, and we charge them for our costs; what is there to object to?  Deficit spending for what is in effect a capital investment—as opposed to spending on current consumption—is justified.  If the War Tax is imposed, we simply transfer additional wealth from ourselves—including the soldiers and others already making the sacrifices—to the future.

Just as the war must be evaluated on its own merits, so must taxation.  If the real goal of the tax is to reduce the deficit, that’s fine; just don’t call it a “war tax” (as long as we are explaining things to the American people); call it a “tax.”  If, as many economists believe, now is the time for further stimulus; a tax is a bad idea.  We’ll have to borrow even more to offset the demand-suppressing effects of the tax.  Whatever the case, the possibly good fiscal reasons for raising taxes are independent of the war in Afghanistan.