Faith v. Reason: The Pitfalls of Ideology

A friend characterized many policy debates as disputes between “faith and reason.” The political season—particularly the primaries—involves repeated “professions of faith.” Candidates appear before the high priests of their sect and are judged on purity and zeal.

Unfortunately, uncritical faith leads to irrational policy. Consider Republicans’ faith in tax cuts. The lesson of the 1964 income tax cut—a Kennedy initiative, I remind you—was that high taxes can discourage industry and that cutting tax rates can paradoxically yield more tax revenue as the economy expands. When Ronald Reagan followed Kennedy’s lead, the tax rate on the highest earners was nearly 70% and almost surely discouraged enterprise. Cutting taxes was a reasoned response. Now an article of faith in republicanism, raising taxes has become a sinful act that invokes moral sanction. Even closing some of the loopholes that riddle the tax code can be deemed “raising taxes.” Reason responds that taxation is necessary and must be balanced—reductio ad absurdum surely applies: Reducing taxes to zero would be absurd and would lead to a very different society than what we now enjoy. Read more »