Tax policy is treated across these episodes of The Bob Zadek Show as a question about the design of the tax system rather than merely its rates: who bears the burden, how much economic damage a tax does, and whether taxpayers can see what they are paying.
Principles of good tax policy
In a 2021 episode on debt and taxes, Bob Zadek put the framing question to Chris Edwards: if government starts with no tax revenue and needs revenue, what should the standards be in designing a tax policy? Zadek distinguished the question of how income is taxed from the separate question of what government does with the money once it takes it Debt & Taxes (2021).
Edwards, described in the episode as of the Cato Institute, answered with three principles. The first is that government ought to extract the needed amount of taxes with the least damage to the economy; he said the Democrats and Biden were going about it in the worst way by raising the top rate and raising taxes on corporate investment. The second is that the system should be as simple as possible — no special favors for individual industries, a flat rate, and as few deductions and credits as possible, so that the IRS does not have to dig around in people’s affairs. The third, which Edwards said is often forgotten, is transparency: the tax system ought to be visible so citizens can see the cost of government. He gave the example of the three or four hundred billion dollars a year raised by corporations, a burden he said is passed on to individuals but hidden from them as voters Debt & Taxes (2021).
On the economics of rates, Edwards told Zadek that the damage from taxes rises more than in proportion as the rate goes up, so that a 40% tax rate is four times as damaging as a 20% tax rate rather than twice as damaging. He attributed this to behavioral responses: as rates rise, investment, work effort, innovation, and the number of new startups drop. On the tax base, he said libertarian and conservative economists have long argued that a consumption base is much less damaging than one that heavily taxes income and capital, because the economy grows through saving and building capital; liberals, he said, want to tax capital heavily, which shrinks the economy Debt & Taxes (2021).
The corporate income tax and who bears it
A 2021 episode devoted to the corporate income tax opened with Zadek’s framing that taxation is a question of to whom you give a dollar you own — who will be your “well-being vendor.” He described government as one such vendor, competing with private business to provide well-being for the money it receives, and called government the stealthiest pickpocket there ever was for taking tax dollars in ways taxpayers do not notice Auditing the Corporate Income Tax (2021).
Zadek’s guest was Richard Rubin, the US tax policy reporter for the Wall Street Journal in Washington, whom Zadek introduced as his tax tutor and as having covered tax policy at Bloomberg and the Congressional Quarterly. Zadek said the episode would examine federal taxes and the hidden taxes government takes without taxpayers knowing Auditing the Corporate Income Tax (2021).
Later in the same episode, Zadek returned to his well-being framing, arguing that as taxes increase, an individual decides through the ballot box what percentage of a dollar of their money yields the most well-being — given to government or given to business, which he credited with the iPhone and with Amazon delivering goods to the front door. Rubin responded that one would normally think of taxing as inextricably tied to spending the money government raises, but that persistent budget deficits and cheap borrowing mean the country gets far more than a dollar of spending for every dollar of taxing. That, he said, breaks the link between the dollar a voter is willing to pay and the dollar of government services consumed, and makes other purposes of taxation more prevalent — including redistribution, to level wealth and income through the tax system, and the behavioral aspect of taxing or not taxing to affect behavior, such as wealth accumulation or mortgage interest Auditing the Corporate Income Tax (2021).
State tax competition and federalism
In a 2013 episode with Travis Brown, author of How Money Walks, Zadek described his own situation as a California resident who dislikes paying state and county taxes because he does not like how the money is spent, but who regards the premium as worth it for the weather and other benefits of living there. He said he liked that California, New York, New Jersey, and Illinois have punitive tax policies and are more of a welfare state than other states, because taxpayers have a choice and vote with their feet, staying or leaving. California’s high tax policy, he said, is not enough to chase him out but is enough to chase other people out Where is Everyone Going? (2013).
Zadek invoked Justice Brandeis on federalism, saying Brandeis marveled at a system in which a state may, if its citizens choose, serve as a laboratory and try novel social and economic experiments without risk to the rest of the country. Zadek called the states 50 laboratories of democracy, each experimenting with the right combination of taxation versus benefits to its citizens, with success dictated by the movement of taxpayers in or out. He contrasted this with one big state — the federal government — doing all the experimenting, which would make moving to a different country a far more drastic decision than moving between states Where is Everyone Going? (2013).
Tax policy and jobs
In a 2012 episode with Gary Johnson, Zadek drew a distinction he attributed to Johnson’s tax answer: the purpose of tax reform is not to create jobs but to make the economy efficient so that jobs will naturally be created. Zadek said anyone can create a job by hiring somebody to do a mindless act without helping the economy, and that the mainstream political parties go astray by treating job creation as the purpose. He called this the subtle but important point of Johnson’s tax policy The Triumph of Principle Over Politics (2012).
Across episodes
The topic recurs across four episodes spanning 2011 to 2021, and the excerpts show no single developing argument so much as different guests approaching it from different angles: Chris Edwards on principles and rate damage, Richard Rubin on deficits and the purposes of taxation, Travis Brown and Zadek on interstate competition, and Gary Johnson on tax reform as a route to jobs rather than an end in itself. Edwards appears in two episodes, in 2011 as Director of Tax Policy at the Cato Institute discussing farm subsidies and in 2021 on debt and taxes.
What the sources do not cover
The excerpts do not state the content of the 16th Amendment, the name of any bill, or what any case held, though the 2021 debt-and-taxes episode lists the amendment and proposed wealth and billionaire taxes among its topics. They do not give the rates, brackets, or revenue figures of any specific proposal beyond Edwards’s characterization of corporate taxes as raising three or four hundred billion dollars a year. They do not describe the farm subsidy programs discussed in the 2011 episode beyond identifying the topic.