The myth of runaway taxes
Eric Kriss has a warning for the taxpayers of Massachusetts. Writing in the latest issue of Commonwealth magazine, Governor Mitt Romney's top budget officer says rising spending on the needy, especially for medical care, poses a threat to our economic well-being.
"Is the growth in health and human service programs causing a kind of fundamental imbalance?" Kriss asks. "Are these problems squeezing out other needs and crimping economic growth by consuming an ever-larger share of our incomes?"
Fair questions, particularly in a week when the latest Romney budget devotes a third of its dollars to Medicaid, the health insurance program for the poor.
But there's a chart that accompanies Kriss's article that tells a somewhat different story than the words. While the graph doesn't completely undercut Kriss's argument, it suggests the situation is far less bleak than he would have us believe.
The chart tracks what has happened to the tax burden in Massachusetts over the past half century. The tax burden is the share of income that goes to pay state and local taxes. In 2004 those taxes consumed about 10 percent of personal income -- exactly the same percentage they consumed in 1964.
Think about that for a minute. In 1964 the state budget was $820 million. The latest Romney budget proposes spending $23 billion. In 1964 there was no Medicaid program. The new budget projects $6.7 billion in Medicaid spending. In 1964 there was no such thing as special education. Today Massachusetts spends almost $2 billion a year on special education.
I could go on, but the point should be clear. Over the past 40 years, government here has grown dramatically, and not just because prices have climbed. Government has expanded to meet the needs of a changing society. Yet thanks to a growing economy, we have managed to pay for that bigger government without taxing ourselves any more heavily than we did 40 years ago.
You aren't likely to hear the Republican administration in Boston make that point. You certainly won't hear it from the Republicans in Washington.
At the federal level, the big complaint from conservatives is that rising government spending threatens our well-being. Does that sound familiar?
In a recent commentary, the Heritage Foundation, a conservative think tank, warns that if spending is not brought under control, the impact will be felt "on our economy, taxpayers, and future generations." Like Kriss, the Heritage people have a point.
Federal spending has been growing rapidly and the bills will have to be paid -- now or in the future. But like Kriss, the conservatives in Washington don't want to focus too much attention on the tax burden.
That should not come as a surprise. In the most recent quarter, the federal tax burden -- taxes as a share of gross domestic product -- was 16 percent. The number is lower than it was when President Bush took office. It's even lower than it was when Ronald Reagan was president. In fact, you have to go back to the administration of Harry Truman, the spring of 1950 to be exact, to find a time when the federal tax burden was lighter than it is today. President Bush's tax cuts aren't the only reason for the decline, but they are a big part of the story.
I am not on a crusade to bring back big government. There are limits to what government can do and how much government we can afford. Kriss is right: Getting a handle on healthcare spending is absolutely critical, both for the public and the private sectors.
But it is important to keep our eyes on both sides of the ledger. Government isn't growing by leaps and bounds, and we aren't being crushed by the weight of the taxes we pay.
If history is a guide, we can meet our obligations and even take on new ones as long as the economy continues to grow as it has, and we are willing to tax ourselves at the same level we have in the past. That may be too many words to put on a bumper sticker, but it is something to keep in mind in this election year.
Charles Stein is a Globe columnist. He can be reached at stein@globe.com.
