Friday, July 15, 2011

The Death Tax, Entitlement Reform and Making Economic Policy Popular

It’s Not What You Say, It’s How You Say It

Words are not necessarily neutral.  They can be neutral and they can be pejorative.  In policy wars proponents want their words to be pejorative, to make the case for policy so that the speaker does not have to make the case for policy.

This has been done with increasing frequency in economic policy, so as a public service The Dismal Political Economist will explain a few of these.

Term:  Death Tax

The Estate Tax is a tax imposed by the Federal Government and some state governments on the transfer of assets from a decedent to the heirs.  It is not a major source of revenue, and affects only a very small percentage of the population because of a large exemption amount.  Those it does affect are the very, very wealthy.

In order to generate opposition to the Estate Tax the opponents have re-named it the Death Tax.  So a large number of people who are only affected by the Estate Tax in that their taxes are reduced because very rich people pay more are now adamantly opposed to the tax for the very logical reason that they think it taxes death.

Example:  My granny was so poor that when she was in the hospital the doctors had to keep her alive cause she could not afford to pay the death tax.

Term:  Entitlement Reform

When the policy is to change something in a popular program, one strategy is to change the terminology so that the program sounds less desirable.  So those who want to cut Medicare and Social Security and Medicaid and Unemployment Insurance and the like first re-name these programs “Entitlements” and then call the cuts “Reform”. 

Example:   Mrs. Smith, the government is not cutting off your unemployment insurance, you are getting your entitlement reformed.

Term:  Debt Restructuring

Defaulting on debts is not a pleasant experience. So those who are urging Greece for example not to pay its debt call this Debt Restructuring.  This sounds a lot better than not paying your obligations (although that does not seem to be a problem for members of Congress of both parties who will not vote to increase the debt ceiling.)

Example:   We’re not refusing to pay the Visa bill, we are restructuring our credit card debt.

Term:  Negative Growth

A contraction of the economy is not all that pleasant a thing, so Economists refer to that event as Negative Growth.  This is still not all that great, but the negative aspect of the term “negative” is somewhat offset by the positive aspect of the term “growth”

Example:  We are not refusing to pay out bills. We are restructuring our debt because our entitlement was reformed which caused negative growth in our income and we need to save some money to pay the death tax when we pass on.

Term:  Job Killing Taxes

This is an example of a negative reinforcing a negative.  Everyone is opposed to taxes, but they are necessary for funding government operations, which everyone is at some level in favor of.  So a strong anti-tax message needs more negativity, in this case not only taxes are bad but they are "job killers".  This allows proponents to ignore the fact that there are "job killing cuts in government spending"

Example:  After the government takes away our guns the only thing we can use to kill with are job-killing taxes.  My cousin Orrin got three of em just last week with an excise tax.

The Dismal Political Economist hopes this clears things up.

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