Thousands–probably, millions–of words have been written about Republicans’ religious devotion to anti-tax beliefs. Unfortunately, that dogma is matched by a pervasive lack of understanding of how tax dollars are spent, and what citizens get for our money.
There are plenty of. wasteful programs, of course, not to mention subsidies that have long outlived whatever merit they may once have had. These wasteful and unnecessary programs allow politicians to make the case that all taxes are theft. It then follows that any and all efforts to reduce taxes are by definition laudatory.
Which brings us to Donald Trump’s recent plan to end or defer the payroll tax.
As a number of media sources have explained, payroll taxes support Social Security and Disability Insurance. Social Security’s Chief Actuary, Stephen C. Goss, evaluated the Trump proposal; he concluded that it would end Disability Insurance in mid-2021 and destroy Social Security by mid-2023.
When those of us who are fortunate enough to still be employed look at our pay stubs, we see hefty deductions for FICA. Most of us have undoubtedly thought about how nice it would be to have those dollars right now. Reasonably informed adults, however, who realize that they will need Social Security at some point, understand that deferring instant gratification is in their long-term best interests. (It’s true that some small portion of the population would be able to invest on their own behalf, but since most people couldn’t or wouldn’t, massive poverty among the elderly would result.)
Those who don’t know what the payroll tax deduction pays for see it as just another tax to attack.
I understand that tax policy can be complicated. When I pontificate about Americans’ lack of civic literacy, I’m not suggesting that we all need to know the ins-and-outs of the various ways government assesses us to pay for services–but it would be helpful if people recognized that we need to pay for services that are widely popular and obviously needed at the local, state and federal levels.
Actually, it would be more than helpful if Americans could agree on the essential components of both our physical and social infrastructure. At the local level, there’s a public outcry if streets, roads and bridges aren’t properly maintained. Whatever our concerns about policing, a vast majority expect local government to provide for public safety. Most of us think cities should provide public transit, garbage and snow removal, and a variety of other services.
Survey research leaves no doubt about the popularity of federal social welfare programs like Social Security and Medicare. Survey research also tells us that far too many Americans fail to connect the dots between the taxes they pay and the services they demand.
Should thoughtful and competent individuals and organizations monitor government. programs to ensure that our tax dollars are being wisely and appropriately spent? Absolutely. Are there programs that should be eliminated? You betcha! But ensuring the efficiency of public administration is a far cry from across-the-board anti-tax dogma–and a very far cry from uninformed and dangerous efforts to keep today’s dollars by selling the future short.
As usual, Trump and his administration are counting on the ignorance of his supporters. And to be fair, eliminating the payroll tax is (marginally) less dangerous than drinking bleach…
Deferring the payroll tax at this time would be a win-win for Republicans. They would get to claim that they “cut taxes” and supposedly employees would get more money in their paychecks. What’s not to like???
If Republicans win the election they can keep the cuts in place and be well on their way to ending Social Security and Medicare just as they have long sought to do. Should the Republicans lose the election the Democrats will be forced to reinstate the tax thus giving the Republicans the battle cry “Those liberals raised your taxes”.
And of course, it helps the Republicans that no one in the Administration and none of their followers give a rat’s ass about the elderly or the poor.
I got my first job at age 15; plans of what to do with my first paycheck ended when I saw the amounts removed for different taxes in this state known as “Indiana, the land of taxes”. I asked what FICA meant; my boss explained how glad I would be when I am older that I had paid that tax. How right he was but I was no happier being informed at age 15. Voters are much older and should be much wiser.
When Trump put his first “Tax Reform” in action, I asked family and friends how much more they received in their paychecks. This was met with eye rolling, grumbling or profanity. But the real news came the following year when so many exemptions had been deleted and their checks lost those few dollars in increase the previous year plus much higher amounts being removed. That was only 2 years ago; how soon the Republicans forgot the reality of what Trump means by the term “tax cuts”. I have forgotten which of his administration was ridiculed for repeatedly touting how happy the woman was who received $7.00 more every paycheck.
Voters are’t even seeing the dots to know to connect them.
“As usual, Trump and his administration are counting on the ignorance of his supporters. And to be fair, eliminating the payroll tax is (marginally) less dangerous than drinking bleach…”
During the flurry of reactions to Trump’s recommendation to try bleach and disinfectants to cure coronavirus, I contracted a nasty case of poison oak. I got desperate enough to try pouring Clorox on the infected sites; it didn’t work but irritated the surrounding areas. Was I to drink it? Just askin’
Theresa,
You’re right. However, the bigger problem is our failure to COLLECT ALL THE DOTS in order that we might be able to stop this FASCIST F–K UP.
From the Rand Corporation: “Connecting the dots” is less likely to happen unless one takes a prior step: “collecting the dots,” that is bringing scattered pieces of information into some proximity to each other to enable pattern recognition.
They just want social programs like Social Security, Medicare to be like Medicaid, that is, paid for by general tax revenues, and subject to the whims of whoever controls Congress and the White House from time to time. But it would also move these programs to the part of the Treasury Dept’s obligations that can be met with printed money by the Fed. In other words, no one will pay for it anymore. Its cost just gets tossed on the heap of national debt for future leaders and generations to worry about.
Today Fed Chairman Powell will make an address where he will disclose the Fed’s new and more accommodative policy going forward with respect to its inflation targets. It’s subtle but real – the Fed will no longer set a 2% annual inflation as a target, but rather an average. In other words periods of inflation above 2% will be tolerated as long as the average over time (duration not specified yet) does not exceed 2%.
I believe the Fed’s move is targeted more to ensure that economists can prove that classic monetary economic policies actually work. That enough liquidity can be pumped into the economy to result in higher prices (and lagging but also wages) and economic growth. They will do this by purchasing debt instruments of all kinds, all risk classes and all durations. It will be quantitative easing on steroids. So far their policies have not been able to budge national demand – it has only created asset bubbles, especially in a handful of stocks (FANG plus Tesla). But boy are the big banks in great shape!
I drone on only because these two things are closely related and form the basis of conservative tax policy:
1. Get social programs off their own prescriptive self-funding mechanisms so they can be funded with printed money due to the massive federal deficit each year. “Cut” benefits by reducing reimbursement fees to medical providers and tie inflation-protection of pension payments to an index that tracks inflation at a lower annual rate.
2. Then devalue the massive national debt relative to to GDP by artificially inducing inflation. That is, create demand out of thin air.
Winners, again, will be owners of financial and real assets. Losers will be retirees, the poor, low to middle income wage-earners, retirees, and especially all of the above who are sick.
No thank you.
When I was taking an econ class for my MBA, the professor asked how many people thought their taxes were NOT too high. I was the only one to raise my hand. Asked to explain my rather extraordinary position I began listing government services and properties. When I finished I asked where else could I get a deal like that? At least my professor was won over, but I don’t know if I persuaded anybody else.
This is why we appear to be “up Shit’s Creek without a paddle.” It’s the intentional withholding and making public: VITAL DOTS OF INFORMATION.
For those who salivate over tax cuts, please don’t complain about poorly trained police, potholed roads, lead poisoning from drinking water, polluted streams, rivers and air, second-rate teaching due to poor pay, closed libraries, wobbly internet service and a host of other things those taxes pay for.
Who is the famous Republican author who woke one morning to discover the title to his new book, “It Was All a Lie!” OF COURSE IT’S A LIE! If it comes from Republicans, it’s a lie. The lie is designed to feed the rich at the expense of everyone else. Republican policy is the ultimate grift: take from the 90% to give more wealth to the 10%.
Citizens United v. FEC is the ultimate codification of the lie and the grift. There is NOTHING conservative about grifting. It’s a radical, anti-social undertaking and the Republicans – to a much lesser degree, the Democrats – have been running this scam since Lincoln was shot. Check out the behavior of Republican politicians before, during and after WW II. Their corporate sponsors were making inferior war materiel, double-charging for direct material and labor and otherwise getting stinking rich on the backs of our men and women in uniform.
Wait. There’s more. Cost/Plus contracts persist to this day. But the Republicans have defunded watchdog agencies to at least give some semblance of regulation.
How do you like them dots, Marv?
Last time I veered into a Trump rally there were many people I suspect who were reliant upon the government for one program or another. I remember Matt Taibbi interviewing elderly and disabled folks after a Tea Party rally, hyped up by the Koch family, and there to hear Sarah Palin. They wanted to end the programs they were dependent upon because they thought it would hurt black people more.
Once again, they’ve evolved past the Neanderthal brain used to forage for food and run from danger. There is no rational thought processes going on at all.
Seeing that older Republicans depend upon SSI & Medicare, you’d think this voting segment would be going crazy right now screaming and protesting against cuts to their programs.
But speaking of local services provided to taxpaying residents, why is it the political grift providing those services are unionized when only 11% of the working class have unions? Why do teachers have unions? Fire fighters? Cops? Why do college professors have tenure/unions when the kids/parents aren’t part of unions keeping their wages in line with rising costs?
As Marv said above, us Americans need the media to quit pandering to our Oligarchy and start collecting and connecting the dots. All of them.
Einstein saw the patterns in the late 30s and early 40s coming from economic and political systems which didn’t serve the vast majority. The propaganda holding all these flawed systems together cannot justify or make excuses fast enough to cover the obvious decline. The reason the young people are protesting and generally upset is they are suffering the most from our decline. The flawed systems are negatively impacting them the hardest. While a few kids get to start on third base, the vast majority are buried in the dugout before the game even starts.
We’ve failed to leave the next generation better off and it will only get worse if our so-called leaders don’t make immediate changes.
Probably the only answer to our problem of both collecting and connecting the dots would be an OFFSHORE RADIO STATION located on some type of water vehicle or platform which could beam into mainland U.S.A.
When I was General Counsel for the McLendon Corporation back in the early ’70s they had just that. A radio station called XTRA which was across the U.S.-Mexican border and free of the usual restraints on broadcasting.
Sadly, people are pretty darn comfortable with cognitive dissonance. A college roommate now works as a public school teacher and posts “All taxation is theft” type memes on his Facebook page.
It feels good to hate government I suppose, even when you use it.
Gordon Mclendon, the company president, had been a co-founder of the CIA Alumni Club. Thus, I had the opportunity to have worked closely with one of the real masters of communication.
Dirk,
“Sadly, people are pretty darn comfortable with cognitive dissonance.”
That’s our problem in a “nutshell.” From my experience, the only way WE can move them away from their comfort zone is to “SCARE THE LIVING HELL OUT OF THEM.” The facts are there, if only we had the CIVIC COURAGE to speak them.
Root cause for the 1,000th time – civic education and critical thinking – both long gone from the curriculum.
The Trump Family Boogaloo filling airwaves this week has described what this administration wanted to be and do. Of course they leave to public knowledge how successful reality was compared to those aspirations. The same could be said of the Democrat Convention last week. So at the end of two weeks we have two things to consider. The aspirations and execution by Republicans vs the aspirations and potential to execute by Democrats.
There was one other ingredient in the stew, and that was truth and therefore credibility. Realistically it’s been shown that Republicans don’t mind lying in general and under Trump leadership that propensity has been boundless. He encourages it in others and delivers it himself. Twenty lies per day has to be a record even for politics.
What’s resulted from make more money now regardless of the impact on any others ever in the entertainment media business is a public numbness for lying. It seems to have been made into something so common that it’s not noticed any more. As in “1984” and prewar Germany the public is in overload on the expectation of truth especially considering that lies are more entertaining and bring relief in the form of bias confirmation.
If we are going to return to Constitutional government someday that will have to be accompanied by a return to honoring only truth. Is that possible? We just don’t know.
I gladly paid the FICA taxes, knowing that even if I did not live long enough to collect, it was keeping people like my mother-in-law afloat. Maybe at 18, I grumbled about it, but it only takes a 2 minute explanation to make sense of it. The funny thing, is that somebody can explain it, but until you get your first paycheck, you don’t understand it.
The one thing I don’t understand is that both me a my wife, late in our careers, were lucky enough to have a few years where late in the year, we hit the maximum FICA contribution and they stopped taking money out of our pay checks. We were at the point where we could most afford to contribute to a program like Social Security. If anything, after you hit the “max” you should be contributing more. Take a CEO level executive, he hits the FICA maximum after his first paycheck in the year and then contributes no more to the system. Now that is a regressive tax! Everyone should be mad as hell, but I think as Marv would say the oligarchs are in control.
I think it is also a little insane that police fire and schools are funded by property taxes that through a long convoluted process Indiana has really screwed up. I live in the downtown of a major city. Center township has more Government Buildings, Hospitals, Churches, Schools, and not-for-profit owned property than anywhere in the state. None of those entities pay property taxes. They are great amenities to have and many of them create state wide benefits, but our infrastructure, schools and police all seem to be underfunded. I just want everybody to pay their fair share.
And that is THE question. What is fair and who should pay for it?
Pete writes, “If we are going to return to Constitutional government someday that will have to be accompanied by a return to honoring only truth. Is that possible?”
The only impetus I know of to shock the system is PAIN. Once capitalism destroyed the unions representing workers, I would have thought workers would have marched the streets. Instead, we saw lots of propaganda against unions endorsed by American workers. Speaking of cognitive dissonance!
American workers said, “Fine. We want to keep capitalism and we’ll accept lower wages so Corporate America can make more money moving to foreign lands.
Instead of high school graduates working for corporations making $20-25.00 an hour, our young men and women leaving high school should start at $8.00 an hour.”
Has our cost of living gone down also?
That same mentality and cognitive dissonance are now wanting to destroy government (except for the Military/Financial Industrial Complex) and eliminate taxation of any kind thinking that Corporate America and markets will care for them.
#Ignorance
When ignorance becomes the rule instead of the exception, we are in trouble. How long the trouble lasts is the question. We’ve had four decades of this trouble starting with Ronald Reagan and Margaret Thatcher. Neoliberalism has splintered our “society” to the point where Fascism is acceptable by 35% of the population. A significant percentage endorses the status quo. A very small percent want major changes now or else.
What will it take to shock our systems to the core?
This is off topic, but the NY Times head line of the analysis of the message from the Republican Convention is:
“Republicans Insist Only Trump Can Stop This Chaos. But He’s in Charge Now.”
“When Voters Can’t Connect The Dots”
The above statement is a bit misleading. Voters cannot connect “The Dots” since the “Dots” are well camouflaged it is a stealth campaign carried out by the 1%, large corporations and politicians of both of our political parties.
Back in 1953 the highest marginal tax rate was 92%. As late as 1986 it was 50%. You can find the history here: https://www.taxpolicycenter.org/statistics/historical-highest-marginal-income-tax-rates
The tax rate has been steadily reduced. Not only that but reports surface every few years of the the 1% and large multi-national corporations “stash their cash” so to speak in a variety of shell companies “off shore” and in the USA.
So yes, some of us are aware of these tax avoidance schemes the 1% and large corporations engage in. We connect “The Dots”. When is the last time you heard either political party discuss a complete revamp of taxes that would force the 1% and large corporations to pay their fair share.
Once in awhile the 99% will receive some scraps to divert our attention, it is part of the Stealth Campaign.
40 years of Joseph Goeb….er……. I mean Rupert Murdoch’s propaganda empire and the failure of teaching social ethics and critical thinking at an early age in public schools has led us to our hyper- herd mentality and the failure to connect those dots.
My grandmother was a teacher in a one room school house near where I live in the greater Kansas City area. She was agraduate of the teachers college in what is now called Central Missouri University in Warrensburg. I have one of her report cards that belonged to her son as he attended with her. I was amazed (stunned?) at what I saw 1st grade through 8th grade studied in that school. Trigonometry, Latin, Algebra, European studies, English Lit, and the usual studies inn science, math, reading, writing, etc. I remember grandma talking about how they all were required to memorize everything, stand in front of the room to tell of their learning from memory. Also, by the end of the eighth grade students had heard the same lessons many times over.
Maybe we have missed something from those early educational environments? Getting federal and state monies has, I think, ruined how teaching happens in some circumstances. WHERE a school is (inner city versus wealthy suburb) has made a huge difference too.
How many of us (and of them) often condemn unfortunate people on welfare, as well as criticise people who recognize the basic need for a social safety net, as wanting things they are not willing to pay for. “You can’t just want something for nothing,” is the chant we hear.
What gets me is that many, if not all, of the chanters are adamant that they should have police protection without having to pay for it. Universal education without having to pay for it. Roads minus potholes without having to pay for it. Lights and holiday decorations on our city streets. Street signs. Clear traffic markings on streets. Sewers that work. Clean water. Weed and mosquito control. And a ton of other things…nevermind paying for them.
Talk about civic ignorance! How about civic bullying? How about civic criminals? How about civic treason? How about civic malfeasance? I think we should set the civic bar a lot higher…and prosecute everyone who will not meet those expectations. Or cut them from the American team. No more American jobs for you, asshole. No more water; no more use of streets that belong to the team. Get with the program or get out. Nevermind the color of their skin, their religion, their sexual preference, their sex, their tribal affiliation, their relative wealth; all that matters is that they do their civic chores.
Is there some universe in which conservative doggerel make sense? While there are obviously ideas and artifacts and writings and gems of wisdom from the past that must be preserved, most things, including ideas and attitudes and reality itself, change rapidly in the face of new facts and altering conditions ( how many ideas that predominated in a world of 1 billion mostly stagnant people are relevant in a world of nearly 8 billion on the defensive against climate change and pandemics spread by jet travel?).
Conservatives – people not talented at identifying their own self-interest – believe that “if it was good for my pappy and my pappy’s pappy, then it’s good enough for me.” That line of thinking has two obvious advantages. First , subscribers don’t have to do the analysis required to understand their conditions. Second, they don’t have to do the work that might entail. But there’s a major downside in that adherents’ lives quickly fall out of kilter with that darned reality which insists on changing no matter how hard you try to pin it down.
The result is that conservative thinking rapidly becomes so irrelevant that it would be comical if the comedians who believe it weren’t so serious about it. For 500 years conservatives ruled the roost and brought us the Dark Ages. Then the Renaissance cracked mental doors open enough to let in some light and then The Enlightenment happened and all hell broke loose, including the birth of a nation founded on the novel concept of “we the people.”
In the eyes of conservatives, all hell is still breaking loose, but for progressives and critical thinkers, the moral arch of the universe is bending a bit more toward justice. An open mind is a wonderful thing to behold, but if you are one of its admirers, steer clear of unpersuadable conservatives and their quadrennial conventions. For the most part, they still adore and mimic the Dark Ages.
Monotonous,
“Voters cannot connect “The Dots” since the “Dots” are well camouflaged it is a stealth campaign carried out by the 1%…”
It’s just a continuation of the failed fascist coup attempted by the Dupont and Bush families in the mid-’30s. It wasn’t all that difficult. Instead of a Nazi movement at the beginning like in Germany, they just turned the strategy “on its head” and “jumpstarted” the Fascist movement again in the U.S. by using at least 60% of the Southern Baptist Convention’s churches to do the “dirty work,” at the beginning, remembering that 60% of the churches in German VOTED to be Nazified.
See: “The Trojan Horse in America” by [Congressman] Martin Dies (Dodd, Mead and Company,
New York, 1940) and our essay at http://www.Democracide.info entitled “Democracide: The Far Right’s Path to Power (1993).”
Patrick: “They (Feds) will do this (achieve higher prices and economic growth) by purchasing debt instruments of all kinds, all risk classes and all durations.”
Sounds to me like nationalization of private property, but by a different name and different method. Instead of jackboots doing the dirty work, jackbanks will do the deed.
Congrats to Patrick and Todd – good stuff- and speaking of dots, I note that we talk in terms of “state” and “federal” funding as though such monies are coming from some faraway land. Not so. Tax monies paid are our monies, monies we have paid under duress via rules and laws made by our “representatives,” if they are in truth “ours” and not those of their campaign contributors. It is our “representatives” who decide who pays what, when and how much, and after teasing out our votes seem to forget us in favor of those who financed their campaigns. We are all witness to the result: giant tax cuts for the rich and just enough miniature cuts for the rest of us to keep us out of the streets. Along with the bankruptcy code, the internal revenue code has been a primary target for reform on my list for decades.
One of the reasons for success of the Pax Romano was that after vanquishing another country the Romans called the remnants of the defeated leadership together in a parley and announced the terms of their occupation, and it went something like this: “Look. There are two things we want, peace and tribute. If we have that, we don’t care how you run your country or how you observe your customs, religion etc. If we don’t have that, we will kill you.” It worked. Jews and others of that era paid up, and were able to observe their own customs, practice their own religion, and (with the assistance of Romans) crucify revolutionaries like Jesus and assorted thieves and others who broke local law.
Other than the names of the participants, the compexities of the tax code and the sanctions to be imposed, nothing much has changed from that ancient age. To do: Massively overhaul the internal revenue code with a view toward a fairer and more equitable system that taxes those who most benefit (Amazon, Boeing et al) from our current, uh, system.
For what it’s worth, there is zero support among Republicans in Congress to eliminate the payroll tax, or even suspend its collection. That is totally Donald Trump’s hairbrained idea. When an economic problem is unemployment, it doesn’t make sense to give a big tax break to those who are doing well because they’ve been able to remain employed.
As far as the temporary suspension of the payroll tax Trump attempted to order, I don’t get the impression too many companies have gone along with that. Their bill for the tax, and that of their employees remain. Of course, for Trump it was all a political stunt. Elect me and in December I will make those taxes you owe go away!
The problem isn’t with the 1%; It’s the .001% or less. What do we have to lose by dealing with the TRUTH at this point in time, other than our cognitive dissonance?
“For what it’s worth, there is zero support among Republicans in Congress to eliminate the payroll tax, or even suspend its collection. That is totally Donald Trump’s hairbrained idea. When an economic problem is unemployment, it doesn’t make sense to give a big tax break to those who are doing well because they’ve been able to remain employed.”
Paul; this is but one of countless hairbrained ideas Trump has successfully enacted…or regulations he has repealed…which the Republican Congress has given their full support by their inaction. Remaining mute and idle is full Congressional support by omission. Connecting the dots from Trump to McConnell is a one-step process leading to the loss of democracy, Rule of Law, support of the Constitution and the loss of trust and respect of our foreign allies while becoming a source of ridicule to our enemies as we become easy targets for their wrath when he takes that one step too for for any one of them.
JoAnn,
I think you’re right. It is not reported enough how complete of a failure Trump is in getting any sort of legislative agenda through Congress. What is going on is that Trump is doing everything by executive order and Congress, particularly the Senate, is letting him get away with it. Congress has ceded so much power to the President since Trump took office. That’s what is truly frightening. He’s making Congress irrelevant and becoming a dictator. The Founders thought that institutions like Congress would jealously defend their own turf from encroachment. Well, it worked fairly well for 220 years.
I recently had a chance to watch some video regarding developments during Watergate. What I found fascinating is that even congressional Republicans were interested in finding out what happened and considered it a grave offense when they found Nixon and his aides had lied and covered stuff up. If Watergate happened in today’s political climate, it would have gone nowhere. I would argue Trump has done a lot of things that are worse than what Nixon did. But at the end of the day, Nixon had a love of his country which won out over his own corruption. Trump is easily as corrupt as Nixon. But unlike Nixon, Trump does not care one whit about the country. He would let it be torn apart if it meant his retaining power.
Channeling my inner “D” (named for a former co-worker who repeatedly screamed “communism” because his home owners association wouldn’t let him build a shed or keep junk cars on his front lawn or something.
We all know that on page 242 of every budget is section W which collects all the waste, fraud, and fiscal abuse. We all know that, but “they” refuse to eliminate it. It is all that simple.
Also, all government employees are no good and should be happy to earn $1/hr, or have their jobs outsourced, which ALWAYS saves money.
More seriously, I just finished re-reading an old article about playing by the rules of the game. It was about science versus creationism and other unscientific ideas. The crux of the article was that if they want to play by their own rules of “proof”, you will never convince them. They are playing a different game.
If voters don’t understand delayed gratification, basic economics, and that the government isn’t supposed to be a for-profit business, they will never connect the dots — especially if the only explanations they will accept is the truthiness presented by Fox News and Glorious Leader.
I sure hope that are a lot more of us than of them.
The phrase “the various ways government assesses us to pay for services” fails to differentiate the federal government’s fiscal role from those of state and local governments. The federal government is the only entity that issues U.S. dollars and, thus, does not pay for services with taxes. I suggest you and your readers read “The Deficit Myth” by Stephanie Kelton for a clear explanation of how goverment financing actually works.