Tax Analysts Blog

Battleground 2012: Taxpayers vs. Tax-Eaters

Posted on Feb 3, 2011

Everybody knows what a taxpayer is. We are the millions of people who pick up the tab for America's public spending. You, me, basically everyone you meet is a taxpayer. But what is a "tax-eater"? What do they look like? Where do they come from? And what should you do if you live next door to one?

The term can be traced back to British farmer and radical journalist William Cobbett (1763-1835) who railed against burdensome taxation in pre-Victorian England. Specifically, a tax-eater refers to any person or entity on the receiving end of public spending. If the chosen verbiage seems pejorative, that's exactly what Cobbett intended. His central belief was that tax-eaters are a drain on society and their numbers should be reduced to the greatest extent possible. In short, tax-eaters were freeloaders who unfairly rode on backs of others (i.e., taxpayers).

Fast forward to modern times. Cobbett's colorful language strikes a chord with today's Tea Party movement, which displays a marked intolerance for tax-eaters. This is what drives the conservative desire for smaller government. Should the number of tax-eaters in a given society grow too large in proportion to the number of taxpayers, your culture will inevitably descend into socialist hell.

With the mid-term elections behind us, the battle lines for the 2012 elections are already forming. While I have no idea which political party will be celebrating 24 months from now, I fully expect the scope of our public sector to feature prominently in the ensuing banter. That means tax-eaters will again become a vilified class.

There's nothing wrong with a spirited debate on the size of the federal government and the appropriate level of taxes. Given our projected deficit of $1.5 trillion, such a discussion is absolutely necessary. But let's remember one thing: tax-eaters come in all shapes and sizes, and some of them may surprise you.

Yes, tax-eaters include the millions of federal employees who shuffle papers back and forth in bland office buildings. Yes, tax-eaters include the less fortunate members of our society who scrape by on public assistance. And of course tax-eaters also include cops, firemen, and all the men and women of our armed forces. If you were to have a heart attack right now, the guy who would administer CPR and haul your sorry bones into the ambulance is a tax-eater.

Most of you already understand all that. But there's one more group we must not ignore.

An inordinate amount of federal spending occurs via the tax code. This is one of Washington D.C.'s dirty little secrets. If our political leaders are going to get serious about curbing government spending then everything should be fair game. This is especially true for spending disguised as tax policy, which is arguably the most sinister form of federal outlay because it's designed escape public scrutiny. Think of it as stealth spending.

If you or I take advantage of the juicy giveaways embedded in the tax code then we too are tax-eaters. What about businesses that indulge in the plethora of corporate welfare and loopholes available through the tax code -- are they tax-eaters? You betcha!

We've become a nation of tax-eaters. The vast majority of us are direct recipients of federal spending once you factor in tax expenditures. From those who live off food stamps to the titans of corporate America, we're all on the public dole in one way or another.

So three cheers for fiscal responsibility. Let's hope all the stealth spending in the tax code is the first thing on the chopping block.

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