In case you haven’t noticed, our tax system is broken. Making matters worse, our politicians seem unable to talk about taxes without using deceitful rhetoric. Sockdolager would settle for an honest discussion of just how out of whack the country’s current tax system is. Hey, an opinion page can dream, can’t it? Here, we’ll take the initiative and start the discussion …
Remember those halcyon days when being a conservative meant displaying some level of fiscal discipline? President Bush’s solution to everything — and we do mean everything —appears to be tax cuts.
“Honey, it’s time to feed Spot.”
“Just give him a tax cut, Laura.”
While we’re not economists, Sockdolager can’t help but be suspicious of an economic plan where tax cuts are the elixir for every economic condition imaginable. Bush’s basic argument for tax cuts is that it’s our money and we should be able to spend it however we choose. Fine. We have no problem with an honest debate about the proper size of government and the level of services it should offer its citizens. In fact, we prefer the anti-tax zealots who are at least being honest in stating their desire to “starve the beast.” The beast, in this case, is the federal government and its ability to provide services to citizens.
What we do have a problem with is Bush wanting it both ways: slashing government revenues while simultaneously spending gobs of money that we, being under 30, are no doubt going to end up repaying. Even more insane, Bush is pushing to make his tax cuts permanent despite the country’s decidedly shaky finances. (Our federal budget deficit is now estimated at $455 billion and rising quickly.)
The administration has already received $89 billion in additional funds to cover reconstruction and military costs in Iraq and the project is guaranteed to cost much, much more. The U.S. Department of Energy is spending $6.5 billion on nuclear weapons this year, and this doesn’t include our foolproof missile defense system. The recent Medicare prescription-drug bill is expected to cost more than $500 billion.
But the entire debate about taxes and tax cuts has become so politicized that it has lost all connection to reality. After all, we now live in a country where millions of Americans can be wrongly convinced that eliminating the estate tax — or the “death tax” as its critics like to call it — will keep thousands of farmers from losing their land. Nobody likes to read the fine print when it comes to taxes, but it’s high time the country stopped allowing the debate about taxes to be dominated by a political donor class that does not have our best interests in mind.
Earlier this month, the Internal Revenue Service sent out a reminder notice telling people to pay their taxes. Included in the notice was a paragraph saying the country has two choices: It can continue to grow the economy through tax cuts or it can raise taxes, “hurting economic recovery and future job creation.” Here’s what the notice should have said:
“Yes, the money the government collects is your money. But guess what? The war in Iraq is yours too, as is the new prescription drug benefit bill the president just signed into law. Somebody’s going to have to pay for all this.”
Politicians in this country have realized there’s no easier way to attract supporters, particularly wealthy campaign contributors, than telling them they need a tax break.
The reason this resonates with voters at all income levels, we presume, is that many distrust the government. Taxpayers are unhappy with how their money is being spent and thus see no reason to give the government more money to waste. These people have a point, albeit a limited one. We have been funneling money into the country’s public education system for decades with few signs of success. Throwing money at a problem is not, in itself, a solution.
But the attitude that we should starve our government to death is an argument pushed by poor souls who never got past their Ayn Rand phase. It is also an obvious sign of the growing influence of the wealthy in our political process. What’s sad is that this argument is being wrapped in family values rhetoric, thus enabling tax cuts that primarily benefit the wealthy to pass with few objections. And this rhetoric plays off a very American ideal — that through hard work and persistence, you can succeed. Everyone, the thinking goes, is just a few breaks away from joining the ranks of the mega-rich.
What’s ironic is that the tax system that we have put in place over the last several decades has only made it harder for people from low incomes to improve their lot. For example, millions of low-income Americans today pay a substantial chunk of money in Social Security taxes every year. The original idea was that this money would be squirreled away to ensure Social Security’s long-term viability. But, in reality, most of this money has been used to partially offset the loss in revenues our government experiences from cutting taxes.
Perhaps the best example of our unhealthy distaste for taxes is our view of the IRS. Over the last few years, the IRS has seen its funding slashed and has been handcuffed in its effort to crack down on tax cheats. It’s been accused of using “Gestapo-like taxes” by politicians and has lost the power it needs to ensure that all Americans pay their taxes. Today, you are more likely to be audited by the IRS if you’re poor.
To Sockdolager, this just seems perverse. Paying taxes is your patriotic duty. Moving your company to Bermuda in name only to avoid paying taxes while simultaneously enjoying the benefits of the taxes you refuse to pay is something much worse than perverse. It’s the tax cheats who are the bad guys, no matter how much influence they peddle in Washington.
The real danger of all this is that as the gap between the rich and the poor steadily grows, the idea that America is a meritocracy is falling by the wayside. All the clever rhetoric in the world can’t change the fact that lots of hardworking people are struggling mightily to make a living under a tax system that is basically unfair.