Every year, April 15 brings moaning and groaning amid complaints about taxes. Yet if progressives suggest greater equity in taxes for the wealthy, as billionaire Warren Buffet has, Republicans tell us that we can make a gift to the U.S. Treasury. New Jersey governor, Chris Christie, said, “He should just write a check and shut up.” A letter-writer to our local newspaper sneered at me for claiming that taxes went to help people and gave me the address where I could send my money.
Somehow, conservatives don’t mind sending their money to the wealthy hedge-fund managers from Wall Street or the bankers, but they resent contributing to a badly-needed safety net for the poor. They ignore the facts that people in the United States pay a smaller share of their income in taxes than almost all other wealthy Western nations and that taxes as a share of GDP are at a 50-year low. Wealthy people claim to give money to charities, but these are usually places where they can look important such as museums or other forms of the arts.
When former hedge-fund manager John Arnold and his wife did donate $10 million during last fall’s government shutdown to keep Head Start programs open in six states, the general belief of people is that nonprofits can solve the problems of society. Only 56 percent trust the government to do that. Arnold admitted, “Private dollars cannot in the long term replace government commitments.” Press coverage, however, makes people believe that they don’t need to pay taxes for these programs because wealthy people will.
Scientific research is also moving into private hands, frequently the hands of corporations that will reap the benefits. This practice also puts research into the hands of donors’ personal preferences. Conservatives want lowered government funding of science along with “selective science.” The proposed House bill, The Frontiers in Innovation, Research, Science, and Technology Act, would reduce funding in the sciences by 22 percent while removing a general allocation for the National Science Foundation so that lawmakers can use their personal ideologies to cherry-pick favorite science areas.
People in the United States have been levied a permanent income tax for the past 100 years. The current system came from a tax to pay for World War II. In the mid-20th century, voluntary giving helped support the morality of paying taxes. Tax revolts came with the highly conservative era of President Ronald Reagan who maintained that taxes were not a representation of democracy.
One idea of reviving an understanding of democratic tax-paying is to permit taxpayers to allocate part of their income taxes to a choice within the discretionary federal budget. Another is to educate people about their fantasy that charity can solve the immense problems of the nation.
“What do schools, parks, roads, firefighters, clean air and water, and the social safety net all have in common? You helped pay for them with your taxes! Why? Because what makes our country great is our commitment to everyone having enough and no one getting left behind.
“Many of our faith traditions call us to pool our financial resources for the common good. But fiscal extremists have made ‘taxes’ an ugly word.
“So this Tax Day, April 15th, the nuns and friends at NETWORK are celebrating #TaxpayerPride Day by taking selfies with things our taxes pay for that make us proud. Check out the selfies below and submit your own here!
Photos are available here.
Other solutions to the tax-complainers is education in what their taxes provide. When they complain about the safety net for foreign aid, they need to understand that food stamps, TANF, and foreign aid comprise 3 percent of their taxes. For those who pay $20,000 a year, that’s $600. On the other hand, military is at 25 percent–$5,000.
The $3.7 trillion federal budget is divided into mandatory spending required by Congress and discretionary spending that can be cut. Last year, over half of the discretionary spending went to defense. Some of the interest on the debt can also be attributed to defense spending because George W. Bush’s two wars cost at least $1.5 trillion, a sum that was all borrowed and went above the budget.
No one knows for sure where the money for the defense budget goes because the Pentagon is too big to audit, despite a 1997 mandate that federal agencies have annual audits. We do know that the Pentagon supports 170 golf courses around the world.
Making the wealthy pay their share would even reduce taxes for most of the complainers. A sales tax on Wall Street transactions like those on clothes and food for most of the people in the nation would bring in hundreds of billions of dollars. The London stock exchange has had a tax of 0.5 percent for over 300 years; U.S. proposals are for only 0.025 percent. The wealthy also game the system by making sure that their income is at the 20 percent rate of capital gains rather the 39.6 percent income tax rate. This and other loopholes have made people like Mitt Romney wealthy.
There has been some discussion of limiting mortgage deductions which most people fight. If the amount of deductions were capped at $400,000, it wouldn’t hurt most of the complainers. Switching the deduction to a credit of 15 or 20 percent would level the playing field between the so-called middle class and the wealthy.
Another way to drop taxes for the complainers is to bring military expenditures back to the United States. The U.S. Navy has just spent $4 billion to create a stealthy destroyer, the USS Zumwalt, to patrol the coast of China for a lot more money required from U.S. taxpayers.
At the same time, President Obama’s budget for 2015 spends 55 percent of federal discretionary funds for the military.The Pentagon Overseas Contingency Operations (aka war funding) is a budget with no caps or sequestration caps. This $85 billion in 2014 was for “whatever” use by the Pentagon. The president’s 2014 budget includes $28 billion to enable the Pentagon to “accelerate the schedules for developing and buying new or upgraded systems.”
Justification for paying all this money is jobs. Last month Sen. Angus King (I-ME) wrote that cuts in defense would hurt his state’s industries. His complaint isn’t unique; senators and representatives around the country make the same justification for the ballooning defense budget.
Taxes don’t have to go to the Pentagon to create jobs. People can get jobs in working construction from light rail for public transit to energy-efficient. Reparation of the nation’s crumbling infrastructure would create jobs and bring home war dollars. Infrastructure spending would benefit the economy far more than defense spending would. The GOP reduction on infracture spending by 20 percent under President Obama will cost businesses $1 trillion in sales and lose people 3.5 million jobs.
Complainers about Social Security need to note that most of America’s wealthiest citizens stop paying Social Security taxes two days from now on April 17. Because the payroll contribution cap is $117,000, millionaires and billionaires don’t pay into the system after this date. Most of the people in the nation pay the entire year, with a higher percentage of their salary.
The Reagan standard for payroll taxes was that 90 percent of wages are covered by the Social Security tax, bringing up the cap to almost $200,000. Instead the taxes cover less than 83 percent of wages. Four years ago, the New York Times reported that this one change would produce $50 billion in revenue in 2015. Keeping the cap constant at 90 percent would put it at $230,000. That would be an additional cost of $7,000 at the most and help reduce the deficit. That $7,000 doesn’t hurt as much for a person making $230,000 as it does for those making under $100,000.
The poorest 20 percent of families pay almost double the share of their income to state and local taxes as the richest one percent.
Dreams: increase Social Security, decrease defense, fix the infrastructure, close tax loopholes for the wealthy, and enjoy what your taxes provide. Oh yes, take away subsidies from undeserving corporations and make them pay taxes. You can demand that here.