Where I Was Wrong Part III: Taxes, Work, and Family

I spent the 1990s and the first half of the previous decade thinking way too much about cutting taxes and way too little about labor-force participation and family structure among America’s low-skilled workforce. I had the vague idea that, if taxes were low and efficient, the rest would work out about as well as possible.

I supported Steve Forbes for president in 2000 (even though I was skeptical about his flat tax), but the real crazy was my support for Texas Senator Phil Gramm’s short-lived and obscure 1996 candidacy. Gramm had something called the Dickey Flatt Test. I will pause for a moment to let you laugh.

Dickey Flatt was a hard-working small businessman whom Gramm knew back in Texas. Gramm argued that every penny of government spending should be measured by whether it was justified in taking that dollar from Dickey Flatt and his family. That seemed right to me.

Mostly, it still seems right to me. There should be a good reason for public spending that comes out of the pockets of hard-working people. Furthermore, I think that, all else being equal, lower and more efficient taxes are better. My fear is that the far higher taxes that are proposed by politicians like Bernie Sanders will hurt job growth and, in the American social context of unstable families, make things everything worse.

But all else is not equal. I don’t know how Mr. Flatt has been doing in the years since I first heard about him, but America’s small business owners as a group have done reasonably well. They, along with the professionally educated, have been part of the prospering segment within an America that Charles Murray has described as a society that is coming apart along lines of education and income.

Of greater concern are the increasing number of lower-earning and less-educated men who are entering the workforce later, leaving earlier, and taking more breaks from work in between. Of great concern, also, is the decline of marriage within the lower segments of the income distribution. This decline hurts not only the less-employed men, but also the women they never marry and the children they are less present to raise.

Those with the most chaotic lives are the least likely to vote, but writers like Ross Douthat and Michael Brendan Dougherty have speculated that one of the reasons Trump’s earliest voting base was made up of working-class whites was because of the slow social collapse that Charles Murray wrote about. These working-class Trump voters were not poor, and their own lives were not a mess, but they were the neighbors, siblings, parents, and grandparents of those who were struggling to form families. These Trump voters settled on a flawed candidate, but they knew something I didn’t know back in the 1990s. They knew that tax cuts and smaller government wouldn’t be enough.

Trump supporters are right to worry about family stability and the willingness of people to stay in the labor market. Alongside the traditional conservative agenda of (relatively) lower taxes and spending, we should also have a work-and-family agenda that encourages (or at least doesn’t discourage) marriage and work.

That starts with making marriage and work a better deal. The welfare and tax system should be scrubbed of all marriage penalties. For the able-bodied, work should always be a better deal than nonwork. Parents of minors should have an expanded child tax credit to offset the anti-parent bias in the tax code. If you lose a job that offered health care benefits, and work two jobs that equal forty hours a week but don’t offer benefits, you should receive a tax credit for catastrophic health care coverage. We should expand and consolidate wage subsidies for low-earning workers and offer relocation subsidies so that workers will follow the jobs. We should reform our disability and unemployment systems to encourage people to stay in the workforce and to keep their spells of unemployment as short as possible. These policies won’t solve our problems, but they will shift the incentives in our system so that people in the lower-earning segment will become a bit more likely to enjoy the relatively higher family stability and higher employment that other Americans take for granted.

A few years ago, the center-left Third Way Foundation produced a report called Wayward Sons, about the struggles of low-skilled men (and the struggles of their children—especially their male children) since 1970. We need a new test. Alongside the Dickey Flatt Test, we need a Wayward Sons (and Daughters) Test. We should ask whether government policies encourage people to stay in the labor market, to get married and to stay married—and we should make the answers to those questions a priority.

Pete Spiliakos is a columnist for First Things.

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