Are We Really Talking About Taxes?

I’m beginning to suspect that all the anger/righteous indignation/resentment directed at the subject of taxes isn’t really about taxes at all.

If Americans were really discussing the tax system, surely they would know more about it. And I’m not just referring to the ludicrous arguments being made by the televised talking heads in the wake of the healthcare decision. (Hint: the Supreme Court ruled that the imposition of a penalty for noncompliance was an appropriate exercise of Congress’s taxing power–they didn’t rule that the penalty was a tax.) I’m talking about far more basic information.

A recent poll of Tea Party folks found that 90% of them believed taxes had either gone up or remained flat under Obama; only 2% answered (correctly) that taxes had gone down, which they have for 95% of American taxpayers. Bill Maher noted the irony: members of an organization formed to oppose taxes and named after a historical group known for its anti-tax activism don’t know whether taxes have gone up or down.

Nor is this an anomaly. Discussion of taxes rarely include definition of the term. So people will assert, with a straight face, that “the bottom half” of Americans “don’t pay taxes.” This is hogwash–they pay lots of taxes. Poor people may not make enough money to owe federal income taxes, but they pay federal payroll taxes, gas taxes, sales taxes, utility taxes, property taxes (even renters pay property taxes, which are part of the rent)…In fact, the percentage of their income that the poor pay in state and local taxes is far higher than the percentage paid by the wealthy.

So–we have people who don’t know whether taxes have increased or decreased, and pundits whose calculations of the tax burden conveniently or mistakenly leave numerous taxes out of the equation. But my biggest pet peeve is the folks who discuss tax rates without distinguishing between the marginal rate and the effective rate.

Right now, we are arguing about the wisdom of returning to the marginal rates under Clinton–approximately 39%. Listen to the bloviators on your favorite talk show and you are likely to get the impression that such a rate translates to taking 39% of the taxpayer’s income in taxes. Of course, it means no such thing. It means that once an individual has made enough to be in the highest income bracket, each dollar in that bracket will be taxed at that rate. The effective rate is the actual percentage of overall income paid, after averaging out the rates applied to each income bracket. That–plus lots of loopholes aka “incentives”–is why Mitt Romney’s effective rate was in the neighborhood of 13%, and why corporations that are theoretically subject to 30%+ tax rates actually paid 12.6% in 2008.

My point here is not to advocate for any particular tax policy–we can all agree or disagree about what an optimum tax system would look like. My concern is more basic. It seems to me that if we were really arguing about taxes, we would know much more about them. And if we aren’t really arguing about taxes–if taxes are just a useful surrogate for whatever it is that actually has our collective panties in a bunch–what is that sore spot?

What’s the real source of our sour national disposition?

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The Golden Mean

I’ve been on IUPUI’s faculty for nearly 15 years, and for the very first time, faculty offices are scheduled for repainting and (gasp!) new furniture. Since the desk I’ve used since I arrived has seen nearly as many birthdays as I have, I welcome the change.

The downside is that we all have to box up our books, files, pictures and the like so the movers can do their thing, and it is amazing–and daunting–to realize just how much…stuff…(aka crap) one can accumulate in 15 years. It’s particularly sobering to realize how seldom that crap gets consulted.

I did come across some interesting reading as I was weeding out my files of “background information.” Case in point, an essay by Benjamin Barber titled “A Failure of Democracy, Not Capitalism,” remarking on the passage of an anti-corporate-corruption measure in 2002. As Barber pointed out,

“..business malfeasance is the consequence neither of systemic capitalist contradictions nor private sin, which are endemic to capitalism and, indeed, to humanity. It arises from a failure of the instruments of democracy, which have been weakened by three decades of market fundamentalism, privatization ideology and resentment of government.”

Bingo.

Fundamentalism is problematic in all areas of national life, not just the economic sphere. As attractive as either-or formulations and beliefs may be–and let’s face it, possession of THE truth, THE answer, is undeniably seductive–such hard and fast, one-size-fits-all approaches just don’t work in the real world.  Unfortunately for market fundamentalists, capitalism requires regulation to ensure an even playing field; unfortunately for proponents of central government control, those regulations need to be carefully calibrated–too much is as bad as too little.

There are areas of our common life that require “socialism”–the communal provision of services like police and fire protection, sanitary sewers and roads, to give a few examples. There are other areas where government needs to tread lightly–retail sales, manufacturing, and other entreprenuerial activities requiring relatively minor rules protecting public health and safety. The level of government activity should depend upon the nature of the activity rather than rigid ideology.

The regulatory failures of the past decades have–predictably–spawned a movement intent upon “replacing capitalism.” Americans tend to lurch from one fundamentalism to another, and we don’t seem to recognize that such pendulum swings are unhelpful. Barber’s insight remains an important one; we don’t need to give up capitalism, which has served us well overall. We just need social and legal structures that channel its energies and control its corrupting tendencies.

The Greeks had it right when they advocated for the golden mean.

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My Country ‘Tis of Thee….

If you are looking for an uplifting, “ain’t we great” post appropriate to the 4th of July, you probably need to stop reading now.

I began my reading this morning with Kurt Anderson’s Op Ed in the New York Times, on the downside of liberty. Anderson revisited the historic American tension between individualism and community, and concluded–in concert with many other contemporary observers–that Americans have confused a robust defense of individual rights with a wholesale abandonment of our civic obligations to the wider community. He argues that we have lost the ability to distinguish between individual rights and self-interested greed.

Anderson points to a cultural phenomenon. Thanks to the recent weather, I have been pondering a structural one.

As anyone who isn’t spending time in the arctic knows, we’ve been having an unprecedented heat wave. Much of the nation has also been battered by ferocious storms, and television news has been featuring visible evidence of the damage–especially shots of the downed power lines responsible for a massive loss of electricity. As of last night’s newscast, more than a million homes remained without power. Elderly people and children, especially, are at risk without air conditioning.

My question is simple: why don’t we bury our power lines? My answer is equally simple: because we have a political/economic structure that privileges short-term savings over long-term quality–a structure that rewards those who are penny-wise and pound foolish.

It costs more up front to bury our utilities. It’s cheaper–initially– to string lines. But not only does burying those lines improve the appearance of our cities and towns, it is much cheaper in the long run. It doesn’t take extraordinary storms to down the lines; more predictable weather also takes a toll. Over a period of years, utilities will more than save the extra dollars spent to bury the lines and consumers will enjoy more dependable service.

This same “penny wise, pound foolish” mind-set permeates our public services. Go to Europe (yes, I know, it is heresy to suggest that other countries might do some things better than we do) and walk on granite pavements that have lasted longer than most of our cities. Expensive to build, much less expensive to maintain and replace. Look at the current rush to sell off public assets–Toll Roads, parking meters, even the City-County Building–rather than spend what is necessary to maintain those assets for future generations.

In business, the triumph of the shareholder and manager over the entrepreneur-owner has meant that the next quarter’s bottom line is privileged over the long-term best interests of the enterprise. It’s more important to return an extra twenty cents per share now than to invest in improvements that will benefit the business ten years hence. In politics, it has always been the case that “long term” means “until the next election.” So we have the ridiculous spectacle of the State of Indiana returning $100 to each taxpayer rather than applying those funds to necessary improvements in education or infrastructure that won’t yield such immediate gratification.

Maybe it’s fitting that we have fireworks on the 4th of July. Children love fireworks, and we seem to have become a nation of children.

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Anderson Cooper and the Wheel of Fortune

In its upcoming legislative session, the Indiana General Assembly may or may not pass the pending, mean-spirited measure to constitutionalize our existing ban on same-sex marriage. I hope they don’t, but at the end of the day, it’s irrelevant. This battle is over.

Over the past couple of days, we’ve seen a variety of news items relevant to the status of GLBT people. France and Ireland moved closer to the recognition of same-sex marriage. Anderson Cooper came out (much to the surprise of absolutely no one). In his decorous and moving statement, he acknowledged the importance and significance of that action, saying

” I’ve also been reminded recently that while as a society we are moving toward greater inclusion and equality for all people, the tide of history only advances when people make themselves fully visible.”

The reason I say this battle is over, however, isn’t because yet another celebrity has decided that it is safe to be honest, and it isn’t because increasing numbers of Western nations have decided that GLBT citizens are deserving of equal treatment by their governments. It is because Anderson Cooper’s observation about visibility is exactly right, and because that visibility–with its welcome, everyday, humdrum, taken-for-granted nature–is increasingly part and parcel of American culture and experience.

My husband and I watch “Wheel of Fortune” most nights after dinner. (Hey, we’re old!) Last night, when Pat Sajak asked a contestant if he was married, the young man said “Yes, to my wonderful husband Garrett, for seven years.” No one raised an eyebrow. You don’t get more middle-American than Wheel of Fortune.

I’ve previously noted the presence of numerous gay and lesbian couples on HGTV–couples whose family rooms are redecorated, or kitchens remodeled, all without comment or any other indication that these same-sex couples are any different from the folks whose godawful bathroom was “crashed” the preceding week.

If you need further evidence that overt homophobia doesn’t sell even in Indiana, take a look at Mike Pence’s campaign commercials. Talk about redecorating and rehabbing! As Pence tries to recreate himself into someone likable, someone we might actually elect, he is doing everything he can to suppress his inner culture warrior. This hasn’t extended to taking any actual policy positions, mind you, but he certainly has abandoned the anti-gay rhetoric (along with reminders of his war on Planned Parenthood, immigrants and people who don’t share his brand of “Christian” beliefs) in favor of content-free paeans to “Hoosier values.”  This does not indicate a change of heart; it is a strategic decision. If Pence thought homophobia would help him get elected, he wouldn’t be soft-pedaling his own.

So I repeat: this battle is effectively over. There’s considerable mopping-up left to do, of course. Just as the civil rights movement didn’t eradicate racism, there’s plenty of anti-gay animus to confront: bullying of schoolchildren, legal discrimination and inequity, gay-bashing…I don’t mean to minimize the task ahead. But the cultural shift has occurred.

The law will follow.

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Reconsidering ID

I’ve always been reflexively opposed to the notion of a national ID card. Call it the civil libertarian in me, but such an identifier raises visions of police states past and privacy intrusions future. That said, I’ll admit this is not an issue I’ve really thought through–my distaste is more visceral than intellectual.

So I was grudgingly persuaded by Bill Keller’s column in this morning’s New York Times.  Keller’s point of departure was the recent Supreme Court decision that struck down most of the Arizona immigration law, but left intact the right of police to demand “papers” from people being detained for other reasons. As he pointedly asked, “What ‘papers’?” What sorts of identification do any of us carry that proves we are citizens? Wouldn’t employers and police officers be better served by the existence of a standard ID?

Keller acknowledges the privacy concerns.

 “The trick, and I won’t pretend it’s always easy, is to distinguish the reasonable and constructive from the invasive and excessive. We want the sales clerk at the Gap to know our credit card is good, but not to have access to our whole credit history. We want our doctors to share our health histories with one another, but probably not with our employers. We may or may not want retailers to know what kind of books we read, what kind of car we drive, where we are thinking of traveling. We may or may not want those who follow us on the Web to know our real-time location, or our real name.”

“This will not satisfy those who fear that any such mandate is potentially “a tool for social control,” as Chris Calabrese of the A.C.L.U. put it. But the only way to completely eliminate the risks of a connected world is to burn your documents, throw away your cellphone, cancel your Internet service and live off the grid.

As it happens, the proposal I described is already on the table. Senators Charles Schumer and Lindsey Graham included it in their menu for comprehensive immigration reform in 2010. For obvious reasons, they didn’t call it a national ID. They called it an “enhanced Social Security card.”

Like just about everything else, immigration reform is stuck in the mangle of election-year partisanship. And if Congress ever does revert to the business of solving problems, there should be many parts to a humane, sensible immigration bill — including expanded legal immigration and a path to citizenship for many of those already here. But a fraud-proof, limited-use national identification card is an essential part of the package.

Then the Arizona police can go back to doing their real jobs.”

I won’t say his argument entirely persuades me–but it’s undeniably logical, and worth more consideration than I have previously given the matter. Read the whole column, and see what you think.

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