Economics: Enforcing the Law Is Redistribution?

TORONTO, ONTARIO - If one wants to learn why the rest of the world hates economists, one need look no farther than a recent column by David R. Francis in the Christian Science Monitor. The Monitor is not exactly a right-wing newspaper like the Wall Street Journal, but this column looks like something off that paper's editorial page. Do economists see anything in the world except money, even laws?

In recounting how "wealth redistribution" is coming to the United States--a common refrain on the political right, as if the rich actually wanted a flat tax with no loopholes--Francis starts by citing the Medicare tax hike that will start in 2016 as a result of health care reform. That's fair enough, and a legitimate debate could take place on the fairness of that tax increase affecting the richest 1 percent of all families.

But, Francis then runs off more examples. The first two have nothing to do with changes in tax policy. The first is citing the increase in auditing by the Internal Revenue Service by 33 percent of those making between $1 million and $5 million. Basically, the argument is that because the auditing is taking place, people making between $1 million and $5 million will be paying more in taxes. This completely overlooks the fact that they were supposed to already be paying these taxes, and were breaking the law by not doing so. Apparently, like a surprising number of economists, Francis considers it legitimate to evade taxes, and considers it "wealth redistribution" to enforce the law!

The next example is exactly on the same lines. He cites the increased "cracking down" on overseas tax shelters "used mostly by the affluent" as more "wealth redistribution." It's apparently okay for the rich to hide their earnings overseas and enforcing the law that already exists to prohibit this practice is no different than a targeted tax increase.

Francis' last two examples return to tax policy (the fate of the Bush tax cuts and a mused increase in the top income tax bracket). I don't mind debating tax policy with people more economically conservative that I am don't believe in the same level taxation or degree of progressiveness in taxation that I happen to believe in. That's a legitimate debate worth having, even if too often it plays out like the promotion for the Lang and O'Leary Exchange here in Canada--"Shouldn't we just lower taxes?" "I like to drive on a road that is paved, so no."

Laws are not subject to such debate. Unless they are under court challenge for constitutionality, which neither of Francis' examples happen to be, there is nothing to debate. They are the foundation of the cohesiveness of the country, and they should be expected to be enforced. It's not acceptable to disobey the law, and it's not "wealth redistribution" to enforce the law. The fact that many economists don't see things that way is exactly why so many non-economists have so little respect for the profession. Francis' column has added to that impression.