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The good that governments (and property taxes) do

Date Published: 12/29/2011

Author: Dane Smith, President


One of the most lucid economists on the Minnesota scene is St. Paul Pioneer Press columnist Ed Lotterman, a voice of reason and balance who values both free markets and our democratic governments.

In a recent masterpiece of a column in the St. Paul Pioneer Press, Lotterman gently deflates fellow PP columnist and government basher Joe Soucheray, explaining in the manner of a patient civics instructor how all of us in St. Paul get pretty good value from property taxes and local governments.

Lotterman describes in personal detail how his monthly $70 tax bill for vital city services (such as streets and parks and emergency services) is less than what he pays for phone and Internet service. He cites the $90 per month he pays for the good public schools that educated his three children and tens of thousands of his neighbors, and calculates that he will pay much less overall in taxes than he would have had to pay for equally excellent private schools. (Lotterman does not bash the private sector in explaining the value of the public sector, or vice versa.)

Best of all, Lotterman gets straight to the true bottom line of the matter when he reveals how the total cost of all Minnesota state and local government, and the size of its public workforce, is actually a smaller share of the economy than it was 15 years ago, despite the constant refrain to the contrary by anti-government noisemakers who falsely allege bloat and uncontrolled growth.

This relentlessly reasonable economist concludes: “Objective data just don’t support the idea of either spending or taxes out of control."

Yet the bashing surely will continue apace at every level throughout the 2012 election year. This despite the fact that the United States has among the lowest taxes (especially on the wealthy) among the wealthy democracies and that Minnesota has fallen to just average in taxes and public investment, closer to the level of the more regressive Southern states.

Here’s an idea for a New Year’s resolution for that vast majority of we Minnesotans who know better: Stand up and speak out whenever possible against the assault on our democratic institutions and the irresponsible delegitimizing of our own governments. It might take a couple hours of keyboarding a message to the local paper or cause a little discomfort at a dinner party, but speaking up always makes a difference.

We can start by pointing out that small government (and more importantly, a lack of clean and honest democratic civic infrastructure or rule of law) correlates closely with gross inequality and backward societies and tragic socioeconomic measures (think of Germany and Guatemala).

And we must begin to take on in a serious way the new libertarian menace, a set of extreme theories and interpretations of history that were described recently by national columnist Joe Conason as “lethal fantasies."

Among them are the truly extremist reactionary notions that we all were better off in the 19th century, with close to zero federal government, with laissez faire economics and child labor, with little or no effort to provide economic security in old age or for those with disabilities, and without the least concern for racial equality or gender equality.

In the face of this assault, the defense of our communitarian traditions and practical governments, built up over the last century in Minnesota and the United States, actually has become the conservative position.

As progressive author and columnist E.J. Dionne phrased it last week, the conservative stance is one that defends “a tradition that sees government as an essential actor in the nation’s economy, a guarantor of fair rules of competition, a countervailing force against excessive private power, a check on the inequalities that capitalism can produce and an instrument that can open opportunity for those born without great advantages."

Most of us instinctively understand that our governments are the way we do great things together that we can’t do as well individually. Our governments and our taxes are the way we provided universal education and literacy, developing the human capital that fostered wealth and strength. Our governments are the way we defeated fascism and communism and Middle Eastern religious extremists, the way we dramatically reduced elderly poverty, the way we undid racial oppression that was rooted in economic exploitation and religious fundamentalism, the way we put humans on the moon, and the way we put the World Wide Web and the Internet in the hands of business owners and individuals.

In Minnesota, we want to preserve a public sector that has been nationally recognized as one of the cleanest and most innovative, with governments that helped create top quality schools and colleges, order out of chaos in the metropolitan area, environmental enhancements and incomparable park systems, the 911 system and bicycle paths, and some of the nation’s best indicators of health and socioeconomic well-being.

We instinctively know that our judges and teachers and nurses and sewer workers and cops and restaurant inspectors and National Guard troops and highway construction workers are paid for with taxes. And we know our lives would be worse without them.

And now more than ever, we need to tactfully but firmly remind our neighbor of these truths the next time he or she uses words like “legal plunder" or “welfare state" — as Jason Lewis recently did in a Star Tribune column describing our governments and taxes.

We really must resolve to do serious battle with this contempt for our social contract in the United States and Minnesota and good governments that are still the envy of the world. And here’s a final framing tip: Don’t say “THE government," as if it’s foreign or alien. Say “my government" or, better yet, “our government." Because it really is.


A version of this column originally appeared in the St. Paul Legal Ledger Capitol Report on Thursday, December 29, 2011.

Dane Smith is the president of Growth & Justice, a progressive public policy organization that promotes statewide economic growth for Minnesota through smarter public investments in human capital and infrastructure.

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