Reihan Salam has a theory about why David Koch, a libertarian billionaire who draws ire from the left similar to the treatment George Soros receives from the right, supports tax increases.
So what might explain Koch’s (presumably reluctant) embrace of tax increase? He seems to be one of the libertarians persuaded by William Niskanen’s critique of “starve-the-beast.” Briefly, Niskanen argued that (1) it was implausible that reducing the “price” of government would reduce demand for government; (2) the evidence of the post-Reagan era was that tax reductions tended to be accompanied by a lack of spending restraint while tax increases tended to be accompanied by an embrace of spending restraint; and (3) a fixation on cutting taxes had distracted the libertarian and conservative movements from pursuing reforms designed to curb the growth of public expenditures. One might reject Niskanen’s thesis, but it has certainly gained currency among at least some elite libertarians and conservatives.
