Why Democrats Tend to be More Socially Liberal

Sunday, August 30th, 2009

Eric Falkenstein, who is socially liberal and fiscally conservative — that is, libertarian — offers a tenuous explanation for why Democrats tend to be more socially liberal, given their high-tax ways:

Before the modern personal income tax in 1913, liquor taxes accounted for about a third of federal revenues. Then came the income tax in 1914 and, on its heels, America’s entry into World War I. During the war federal revenues received through income taxation for the first time exceeded those from any other single source. By fall of 1917 Congress saw the income tax as its chief source of revenue, reducing the cost of voting for Prohibition in December 1917.

The Great Depression severely depressed incomes and tax revenues correspondingly plunged beginning in 1931. By 1932 federal income-tax receipts fell by well over a third from their level in 1931 and to almost half their 1930 level. Prohibition’s repeal in 1933 generated a big jump in revenues. As a percentage of federal government revenues, liquor taxes jumped from 2 percent in 1933 to 9 percent in 1934 to 13 percent in 1936.

Big government fans need money, and income tax revenues do face a Laffer curve effect at some rate. In this context, taxing underground activities is a no-brainer for most Liberals, and so big-government types are in favor of legalizing activities that conservatives think are best kept underground.

It looks like there’s a lot of money in legalizing marijuana.

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