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Diet Pork
The Washington Post reports a record pork feast today
President Bush signed into law a massive $286.4 billion transportation bill Wednesday that includes more than 6,000 pet projects of lawmakers across the country that range from a crucial parkway linking two interstates in Illinois to a snowmobile trail in Vermont. ... Keith Ashdown ... said the distribution of the money "is based far more on political clout than on transportation need."
Such waste may seem inevitable; how else can congressfolk claim credit for "bringing home the bacon" to their district? But consider this alternative:
Allow federal tax rates to vary by congressional district. Given this, taxes would suddenly become a concentrated benefit. Incumbents could brag about how much lower taxes were in their district, and challengers could complain how high they were. Incumbents would have clear incentives to trade votes to get taxes lowered in their district.
With "diet pork" on the menu, politicians would have a healthier way to feed their need for concentrated benefits. (I'm leaving comments on for a change.)
Posted by Robin Hanson on August 10, 2005 at 08:46 PM in Political Science | Permalink
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Comments
What makes you think that's a viable alternative?
Posted by: Scott Scheule at Aug 10, 2005 9:15:47 PM
Is it really a record? I mean yes, it's awful, but was't there one from three years ago or so that was even worse? Or is my memory failing me?
Posted by: Matt McIntosh at Aug 10, 2005 10:04:46 PM
How would this work?
Would the federal income tax for the district be a function of the targeted spending in that district? Would spending targeted to the state be assumed to apply to all districts equally (since they have similar populations), or would the money need to be followed by federal bureaucrats?
Would it be affected by any spending (like disaster recovery or military bases), or just "pork"?
If only to pork, how would that be defined?
Posted by: Gil at Aug 10, 2005 10:46:23 PM
I am unconvinced that this is a viable alternative. In fact, I think that it would only add to the problem.
At the moment, we have the same tax rates across the country, but varying levels of spending among districts. There is no indication that in Robin's scenario that the ability to vary spending among districts would change. Therefore, the electorate would have two dimensions on which to make demands *of their particular legislator*: increase our spending AND decrease our taxes. Unless each district must run a balanced budget (or what? Get kicked out of the union?) on its own, the best way for any given legislator to get reelected is to pledge nothing from the district to the budget, but take as much as possible.
Furthermore, as with spending decisions, I can only assume that decisions on individual districts' tax levels would still be under the control of congress generally. I think this would lead to a strategy of "soak the rich zip code", in which representatives from less affluent districts (of which, by default, there are many of) place particularly high tax rates on a handful of districts (especially those of the minority party) in order to (1) keep their own tax rates low, and (2) keep their own spending high.
Anyway, those are just first thoughts. I'm sure someone else can come up with a more eloquent reply upon reflection.
Posted by: JPB at Aug 10, 2005 10:57:09 PM
I am only a humble Australian, but I understand that the federal government in the U.S. gives money called block grants or something to the states. Would it be possible to add up the amount of pork in a state and subtract it from the block grant at the rate of say fifty cents in the dollar? Or should I go read a book instead of writting comments on something I know very little about?
Posted by: Brak at Aug 10, 2005 11:26:54 PM
An interesting idea in some respects, but, in the absence of a balanced budget amendment or something similar to enforce fiscal sanity, I'd be concerned about an explosion in public cost-shifting. With current habits like industry-specific tax breaks, deficit financing of continuing operations, etc. already quite pronounced, things might get much worse if you removed the implicit requirement that the tax code be uniform nationwide. What would stop either a "soak the rich zip code" strategy, as JPB said, or a "special favors" strategy benefiting New York City and other prominent areas? Or, for that matter, a system favoring rural areas, or any other identifiable geographic group?
In short, it could do more harm than good. (Never underestimate the ability of Congress to form regional voting blocs for the support of terrible policies. Sugar quotas, anyone?)
Posted by: Jeff Bergman at Aug 11, 2005 12:15:37 AM
Hmmmm...
Senator from high-tax state says to low-tax Senator: "So, you want that porky project in your district, yeah? Well, if you want that, then I'm going to have to vote against lowering the federal tax rate for your state. Deal?"
Points for creativity, Robin. And at first glance, it seems to make sense. It also seems to be something that will never ever happen. Can the federal income tax vary by state anyway? I doubt anything in the constitution precludes such a thing, but it sounds like a pipe dream. Nevertheless, very cool.
Posted by: Dave W at Aug 11, 2005 12:37:52 AM
As another Australian I'd say that this seems to be a defacto method of just delegating more tax and spend powers to regional governments such as the state and local level.
As different nations already do this to different extents, a simple comparison of the results between a very centralized country (France?) and a similar but much more federalized neighbour (Switzerland?) should show up the long term effects.
Posted by: Patrick at Aug 11, 2005 4:00:46 AM
As long as we're redesigning the incentives for legislators, why not give them cash bonuses when they keep spending under control ? Perhaps they could get a percentage of any savings from the previous year -- or savings below the pace set by the growth of GDP or (tax-law-constant) revenues.
Posted by: Gordon Mohr at Aug 11, 2005 4:14:24 AM
Umm, you understand that the immediate result of this would be that the Federal tax rate in the red states would go immediately to zero, while the rate in the blue states would double? And that it would remain like this as long as the Republicans are in power?
*Think*, people.
Posted by: Anon at Aug 11, 2005 7:28:24 AM
I like the idea of creating incentives that aren't just spending, but Anon is probably right. As Jimi Hendrix almost said "There's to much colusion, I can't get no relief." Of course, he was probably high.
Also, wouldn't this lead to each district havin incentives for both low taxes and high spending? Since the national debt is a communal issue, you'd end up with a sort of tragedy of the commons, wouldn't you? I think there needs to be something to check against running up a hue deficit aside from altruism.
Posted by: josh at Aug 11, 2005 8:28:45 AM
To be clear, I'm not proposing any formal rule relating taxes to spending; district tax rates would be on the table to change just as district spending rates are now. I don't see why this should induce more soaking-the-rich or favoring-red-states than we have now; it should just allow those with power to obtain their favors in a more efficient form.
Posted by: Robin Hanson at Aug 11, 2005 8:28:59 AM
Because district-specific spending is really only a very small part of overall federal spending, your proposal would have an insignificant effect on spending. And defining what is district-specific would be extremely difficult. There are some projects, such as, say, a library that are obviously district-specific, but what about a highway or bridge that carries people from other states? A rain forest in Iowa that attracts visitors from out of state?
In short, your scheme would be ineffective.
Posted by: ostap at Aug 11, 2005 8:56:53 AM
Actually on second thought, you're right.
Posted by: josh at Aug 11, 2005 9:06:45 AM
Sounds depressing but I really don't see a way out of this since the electorate loves the pork and their the ones who elect the pork barrelers..
Posted by: Richard Cook at Aug 11, 2005 12:07:48 PM
Idle coffee-break theorising:
Two legislatures, separately elected. Legislature-1legislates, but can't legislate taxes to pay for it all. To raise the money, they apply to the (separately-elected) taxing Legislature-2, who deal only with taxes - nothing else.
L-2 (taxing) reps run for election on tax-policy alone - so they'll keep the L-1 porksters on a tight leash.
Separation of powers (taxing and spending) and a double dose of democracy. Everybody wins.
Posted by: Thon Brocket at Aug 11, 2005 1:52:00 PM
It's fun to express outrage over this sort of thing, but I wonder how much really is "pork" and how much is legit. My guess is that the overwhelming majority is defensible (if you believe in federal funding of transportation).
And this is a drop in the bucket relative to America's true fiscal problems (entitlements).
Posted by: Will Franklin at Aug 11, 2005 2:42:06 PM
Incidentally, line item veto would be a good idea for trimming the pork. But it would still eliminate a tiny portion of spending, even if used by a deficit hawk.
Posted by: Will Franklin at Aug 11, 2005 2:44:33 PM
Will: Wisconsin (my state) has a line item veto.
The budget is still filled with pork. An analysis of why might be interesting.I like Thon's idea. It might be doable at a muni level to start out with.
Posted by: Steve Anich at Aug 11, 2005 6:01:22 PM
"So my simple proposal is to allow federal tax rates to vary by congressional district. Given this, taxes would suddenly become a concentrated benefit."
Relative to beneficiaries of traditional pork (e.g., highway contractors) the beneficiaries of lower taxes in a district would be a very diffuse lot. Too diffuse for the proposal to make much difference I suspect.
The closest practice to the proposal may be enterprise/empowerment zone designation, but that isn't very close.
A (rarely used) mechanism for reducing taxes locally (but not federal taxes paid locally) is to refuse federal grants that require local matching funds.
Posted by: Mike Linksvayer at Aug 11, 2005 7:36:38 PM
How odd -- to be to the *left* of most of the people in the room! (I live in MA. I don't get this feeling a lot.)
Anyway, I'm seeing the opposite problem from most people here. Federal taxes perform redistributive functions and I happen to think some of them are legit. It seems like under this scheme the people most able to take care of their needs without government help would strongly pressure for low federal district taxes; the people with high needs would end up with the higher taxes. Sounds fair until you realize that the people with higher needs are quite likely to be the ones least able to pay for help. The people in the town I live in, with its plethora of $600K houses, could easily enough educate their children privately if they had to; the children I teach, many of whom have single parents and live in the projects, have limited options other than public education, and their districts have the least ability to pay for it.
Furthermore, there's a fairness question about truly shared services. The military, for instance, provides a certain common benefit to all, so it seems reasonable for everyone to fund it. With local taxation, though...do my MA neighbors, dutiful war-protesters all, stop funding the military...but still have the right to have jets scrambled from Otis AFB next time something suspicious flies out of Logan? And...*do* they have that right? Would the military find itself foot-dragging to defend low-tax regions of the country?
Posted by: Andromeda at Aug 11, 2005 7:51:20 PM
Good Idea
I proposed to do the Tax rate adjustment be on a state wide basis as this would be easy to determine. We have some measures as to the ammount of money that goes to each state, and I'd propose that if California gets, say 20% of the federal budget spent in it, then the tax rates for corporations and people in that state be increased or decreased proportianaly so that 20% of the taxes would be collected from the state.
Wether this would be done state wide or congressional district, it would at least tend to reduce the "Free Lunch" character of Pork, since an area would pay for its federal projects.
See: http://wematter.blogspot.com/2004/11/proposal-1.htmlPosted by: Mike Liveright at Aug 12, 2005 4:14:44 AM
"Do my MA neighbors, dutiful war-protesters all, stop funding the military."
As an added, benefit, this sort of thing could lead to more efficient use of the military. The best way to protest a war would be to refuse to finance it.
Posted by: josh at Aug 12, 2005 8:32:10 AM
The issue is the diffuse benefits of lower tax rates vs. the concentrated benefits of local pork spending. Allowing different tax rates seems unrealistic, for restribution and incentive problems above.
tomgrey.motime.com/1066623081#160449
I prefer Tax Loans, where "needy" can get Fed. cash help, but pay it back through taxes paid PLUS a surcharge.
Transportation bills should include higher local gas taxes to repay the pork -- and perhaps a local vote on whether to accept the Fed. money.
The Key Tax reform is to end "free money."
Posted by: Tom Grey - Liberty Dad at Aug 12, 2005 1:20:26 PM
This discussion about the transportation bill is in my opinion based on some faulty assumptions. The main one being that all this so-called pork in the appropriation bill is being spent on frivolous stuff that is just put in there to get votes. National infrastructure doesn’t grow on trees, and once built, requires maintenance to remain functional. According to the following link (which I admit is going to be a bit biased, considering the source) rates the country’s infrastructure as pretty poor.
http://www.asce.org/reportcard/2005/index.cfm
While the methodology for gathering this data (surveying civil engineers) may be a bit flawed in the objectivity department, transportation infrastructure does need improvement. I mean its not like no one ever complains about traffic congestion, potholes, etc.
Second, take into consideration that this bill is at least 5 years late. That means that for the last couple years, there have been a lot of transportation projects that have come to a standstill (in either the planning or construction phase) due to lack of funding that didn’t come through when it was supposed to come through. As a result, due to the delay in funding, the final appropriation bill has to cover all these old projects plus fund future projects. Otherwise, you end up with a 5-mile section of interstate out in the middle of nowhere that connects to nothing.
Sure you can pick out a few projects that maybe don’t have to be built now. But this isn’t Russia, we can afford a decent national transportation infrastructure. And in my opinion, we should not only try to keep that which has been built in good, safe condition, but also improve it for future generations of Americans.
Posted by: jasonh at Aug 12, 2005 3:38:25 PM
I was going to suggest that this would be unconstitutional under Article I, Section 8, but the uniformity requirement appears to apply only to federal fundraising other than "taxes":
"Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States."
This looks like an issue for which the "original intent" of the founders ought to control. What the hell is a "tax" if the definition does not include "duties", "imposts" or "excises"?
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