Warren Buffett wrote an op-ed in the New York Times earlier this week arguing that rich people like him aren’t paying their fair share of taxes. This provoked a fairly predictable response from right-leaning pundits and politicians: if Buffett doesn’t think that he is paying enough taxes, then he should write a check to the government and rectify the situation!
Jonathan Chait comes to Buffett’s defense:
Obviously this fails to grasp the fundamental collective action problem that’s the entire basis for taxation. You obviously can’t fund the government on the basis of voluntary donations. Buffett and other wealthy people who favor higher taxes on the rich don’t just believe they should pay more taxes. They believe the government needs more revenue.
Seems reasonable enough. But I think it’s interesting to compare this case to others in which individual action to address a widespread problem is rendered more or less futile by the presence of a collective action problem. Global warming is an obvious example. One person deciding not to own a car or take an airplane doesn’t significantly change the amount of greenhouse gas emitted into the atmosphere. Yet at least some people seem to think that this fact does not justify everybody just throwing up their hands and saying, “screw it, I’m not going to change my personal habits to reduce my carbon footprint until there’s a mechanism in place that forces everybody to do so.”
Just last week I stopped for a night at Warren Wilson college in North Carolina, where I spent a night in an “EcoDorm” that had solar panels, non-flush urinals, a system that collects rainwater for the toilets, a special exterior shell to reduce air infiltration, and a bunch of other features that minimized environmental impact. The EcoDorm cost fifty percent more than a typical dorm, and it makes an essentially insignificant contribution to environmental collective action problems. But the students I talked to believed quite passionately in the EcoDorm; the presense of a collective action problem did not let them off the hook for doing their part to protect the environment, and I think that most environmentalists would agree. So why is it that a fair number of people hold this position with regard to the environment while it seems ridiculous that a rich guy like Buffett would have a duty to voluntarily give his money to a revenue-strapped government?