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Democracy, Political Power, and Public Policy Issues Essay

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Updated: Feb 18th, 2022

Introduction

The problem of internal and external control when discussing government is not new. It has plagued people since they started uniting into communities and considering the establishment of laws to be followed by their members.1 Now, the question of balance between democracy and political power is as relevant as it was decades ago, being the center of the debate in the United States and the rest of the world. The risk of the government abusing its power over citizens and national systems exists in all areas of everyday living, including education, health, and citizenship.

However, one of the most controversial spheres in which political power is contested is taxation – the economic relationship between the government and its residents. If one considers the quote by James Madison, it becomes clear that the government’s tax decisions cannot be placed only on the political institution itself. At the same time, people’s individual choices may not be effective in finding the best solution. The present essay considers the ideology of Madison in relation to the current state of tax policy in the United States and European countries. Looking at the connections between money, power, and influence, the essay argues that the lack of control over the government leads to the abuse of political power, which drives economic inequality and furthers corruption and unequal representation of commercial interests.

Quote Interpretation

First, it is essential to discuss the issues that are considered in the quote by Madison. As its author notes, “if men were angels, no government would be necessary.”2 Here, Madison’s view of people becomes apparent – their moral stance is not ideal, thus making them weak to the influence of power while seeking power at the same time. As a result, the problem with governmental control lies in the fact that people, wanting to obtain power, neglect moral obligations in order to harness resources for a select group of individuals or themselves. From this point of view, the need to control government institutions is justified, as it is a way to reduce the risk of corruption and acting in personal interest.

Nonetheless, it also raises another problem – the lack of authority. As governments are created with the aim of creating, passing, and enforcing the law, their power has to be considered vital in the existence of a country or state. Here, the idea of democracy is contested, especially if one considers direct democracy – the system in which members of a community decide on policy without the middle position of representatives. The place of politicians is questioned in this case, putting the idea that law enforcement is a figure of authority into question.

Recent Policy and Political Events

The dichotomy of granting and taking away power is especially visible in the sphere of taxes – people are required to give money to the government, which promises to use these recourses for the common good, returning the money in a different way. The system of taxation, however, is not transparent, thus making the process of collecting taxes confusing for many individuals.3 Moreover, it differs from country to country, further complicating people’s understanding of why their particular type of policy is enforced locally. As a result, the accountability of the government is questioned – when citizens do not know how their tax money is used, they do not view the system positively.4 Simultaneously, the political power over establishing taxes is influenced by outside forces that appeal to people with the authority to pursue their own interests.

In the topic of taxes, the idea that government decisions about new policies are affected by outside forces is especially visible during elections, when politicians make statements that define their campaigns and attract voters. In this case, the theoretical idea is that people’s interests are presented, thus guiding the government in a direction that is chosen by the community the system serves.5 By selecting a person or a party to vote for, people participate in democracy – the decision-making process that involves citizen opinions. As such, it appears that the second type of control discussed by Madison is in place, and members of the state hold the people with political power accountable for their actions. However, in reality, this structure is not infallible and prone to outside control.

Elections for the President of the United States, for example, involve potential candidates campaigning and introducing their vision of the country’s structure for other people. This process often includes the topic of taxation – a major point in any election. However, one should note that any president’s role in the government, according to the US rules, is executive. This means that the president’s goal is to execute and enforce laws, not create them. This responsibility rests on the legislative branch, represented in the US by Congress. In this case, one can use Madison’s quote to demonstrate how the current US election system fails to deliver adequate constraints for presidential executive power.

Referring to recent political events, one can consider two election periods – the one that happened in 2016 and end with the election of Trump and the other that is happening at the moment, considering multiple former and current candidates. Trump’s campaign included a massive corporate tax cut from 35% to 15%, which transparently appealed to the American corporations.6 However, after the election, Trump’s pledge was not fulfilled, and President Trump changed his position from 15% to 22%.7 This case scenario shows how Madison’s idea is both useful and weak in the US. First, it shows that non-direct democracy leads to people being unable to control the government through their electoral decisions. Thus, external control of the government is not in place – the president’s pledge was not fulfilled, and the people who voted for him were not satisfied with the choice they were given.

In contrast, the limited scope of Trump’s political power prohibited him from lowering taxes further. As a part of an executive branch, it is unclear whether Trump should have been able to influence the process in the first place. Still, some of Congress’ power was used to suppress his authority over the suggested legislation. Nonetheless, this situation further proves that the current system of power separation is flawed, as the executive branch has significant control over the legislative one, influencing not only law enforcement but law creation as well.

The idea that promises to change the legislature is an effective way of campaigning exposes the imbalance of political power in the current system. While it is clear that political candidates rely on votes, thus explaining their use of this tactic, the supposed executive power of the president should restrict the candidates’ ability to speak on such issues, declaring their absolute control over prominent topics. In the latest upcoming election, such candidates as Elizabeth Warren introduced the idea of a “wealth tax” to the American citizens, calling for taxation based on one’s income. As a response, donors from Wall Street threatened the Democratic party to withdraw support from all elected Democratic officials and even support the opposing party and Trump.8 This event, similar to the previous one, shows the lack of balance in external and internal control of the executive branch. Moreover, it also indicates that money holds another level of political power that is disproportionality available to the country’s small population.

The issue of lobbying and financial support arises in the example mentioned above. In a modern democracy, this process holds a controversial place, often being viewed as another source of power over the government that is unequal and highly impactful on all branches. Acknowledging the noted authority of the president, which affects legislative and judicial branches, the lobbyists’ ability to control the president and the election further exposes the problem of political power constraints. According to Kornhauser, lobbying to representatives is different from that of influencing the public directly.9 For example, interest groups with significant funds can affect a select number of politicians to support corporate tax cuts. At the same time, it may be more challenging to move the public towards a similar choice.

In this case, the concept of representative democracy is in contrast with direct democracy, where people voice their opinions and decide on changes directly, without the involvement of third parties. Interestingly, studies by Genschel, Lierse, and Seelkopf and Asatryan, Baskaran, and Heinemann show how different government structures respond to potential tax policy. First of all, representative democracies often find themselves competing to lower taxes to invite new residents and increase tax revenue. At the same time, autocracies do not feel the need to compete, establishing taxes according to governmental decisions.10 Both systems have flaws in which the government lacks internal or external control measures. In a direct democracy, as Asatryan, Baskaran, and Heinemann find, people prefer higher taxes because the citizens are focused on their personal needs rather than the desire to compete.11 Moreover, in this system, the accountability of people with political power is much higher, thus increasing the transparency of tax-related government spending.

Conclusion

As an outcome, one can see how the US’s current system can explain the role of tax policy in elections that are not supposed to be related to legislative branches. The increased influence of the president, an executive position, on other parts of the government, and the existence of interest groups targeting elected and non-elected officials further puts the idea of balance and control into question. While the latest policy issues, such as the corporate tax cut introduced by President Trump, show that his current power is not unrestrained, it also reveals many flaws in the branches’ interconnectedness. The president holds significant authority over all departments and can influence and even control law creation, which should be outside of this position’s abilities.

Furthermore, lobbying groups have an impact on governmental institutions, further showing how financial support creates unjust policy. In the discussion of tax law, direct democracy is presented to discuss how it has a higher potential of balancing citizen decisions and political power. It is notable that people’s understanding of taxation in this system creates different outcomes, as it requires transparency and accountability while disregarding competition as a necessary point of appeal.

Bibliography

Asatryan, Zareh, Thushyanthan Baskaran, and Friedrich Heinemann. “The Effect of Direct Democracy on the Level and Structure of Local Taxes.” Regional Science and Urban Economics 65 (2017): 38-55.

Bitonti, Alberto. “The Role of Lobbying in Modern Democracy: A Theoretical Framework.” In Lobbying in Europe, edited by Alberto Bitonti and Phil Harris, 17-30. London: Palgrave Macmillan, 2017.

Bryan, Bob. “Trump Appears to Be Softening on His ‘Red Line’ for Massive Corporate Tax Cuts.” Business Insider, 2017. Web.

Faricy, Christopher. “The Distributive Politics of Tax Expenditures: How Parties Use Policy Tools to Distribute Federal Money to the Rich and the Poor.” Politics, Groups, and Identities 4, no. 1 (2016): 110-125.

Genschel, Philipp, Hanna Lierse, and Laura Seelkopf. “Dictators Don’t Compete Autocracy, Democracy, and Tax Competition.” Review of International Political Economy 23, no. 2 (2016): 290-315.

Goldstein, David. Business Insider, 2019.

Kornhauser, Marjorie E. “The Invisible Government and Conservative Tax Lobbying 1935-1936.” Law & Contemporary Problems 81 (2018): 167-201.

Madison, James. “The Structure of the Government Must Furnish the Proper Checks and Balances Between the Different Departments.” The Federalist, no. 51 (1788). Web.

Scheve, Kenneth, and David Stasavage. “Wealth Inequality and Democracy.” Annual Review of Political Science 20 (2017): 451-468.

Footnotes

  1. Alberto Bitonti, “The Role of Lobbying in Modern Democracy: A Theoretical Framework,” in Lobbying in Europe, ed. Alberto Bitonti and Phil Harris (London: Palgrave Macmillan, 2017), 20.
  2. James Madison, “The Structure of the Government Must Furnish the Proper Checks and Balances Between the Different Departments,” The Federalist, no. 51 (1788). Web.
  3. Christopher Faricy, “The Distributive Politics of Tax Expenditures: How Parties Use Policy Tools to Distribute Federal Money to the Rich and the Poor,” Politics, Groups, and Identities 4, no. 1 (2016): 113.
  4. Philipp Genschel, Hanna Lierse, and Laura Seelkopf, “Dictators Don’t Compete: Autocracy, Democracy, and Tax Competition,” Review of International Political Economy 23, no. 2 (2016): 300.
  5. Kenneth Madison and David Stasavage, “Wealth Inequality and Democracy,” Annual Review of Political Science 20 (2017): 457.
  6. Bob Bryan, “Trump Appears to Be Softening on His ‘Red Line’ for Massive Corporate Tax Cuts,” Business Insider, 2017. Web.
  7. Bryan, “Trump Appears to Be Softening.”
  8. David Goldstein, “The Billionaire Backlash to the Wealth Tax Isn’t About Money — It’s About Power. And Our Democracy Lies in the Balance,” Business Insider, 2019. Web.
  9. Marjorie E. Kornhauser, “The Invisible Government and Conservative Tax Lobbying 1935-1936,” Law & Contemporary Problems 81 (2018): 182.
  10. Genschel, Lierse, and Seelkopf, 304.
  11. Zareh Asatryan, Thushyanthan Baskaran, and Friedrich Heinemann, “The Effect of Direct Democracy on the Level and Structure of Local Taxes,” Regional Science and Urban Economics 65 (2017): 39.
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