That Mankiw, given his conservative credentials, acknowledges the importance of taxes is noteworthy, even if his acceptable level of them is likely lower that that of many others. However, in the context of Republican candidates for major offices this fall, his admission that taxes are necessary and purposeful pushes him further to the party's center than he probably ever expected. Among Sharron Angle, Rand Paul, Carl Paladino and Christina O'Donnell (who are only a small handful of candidates, by the way, but plenty representative), we could probably eliminate three-quarters of the federal government and New York state government in one swoop, based on their collective desires. I doubt Mankiw thinks the same.
Holmes' insight could be plotted on a curve like the supply and demand ones I've been studying in these early weeks of the semester. If taxes are what we pay for a civilized society, the fewer taxes someone wants to pay, the less civilized he is and the less he cares about civilized society. No wonder we have these strange, Know Nothing political protests and rants nationwide, where everyone shouts for no taxes, no government, no experience and occasionally, no one but white people. (What other subtext can "Take Back Our Country" have?)
Sure, this Holmes curve resembles Laffer's -- there's a point where it reaches diminishing returns, and the more taxes someone wants, the more he too departs from civilization. It's called communism. But these days, large chunks of the country seems stuck in the curve's lower-left corner -- the no-taxes-no-civilization part -- and the Republican Party seems quite happy to have that be its official position. I don't understand why.
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