The Appearance of Age
For the Last Time Again

REFLECTIONS: Taxes

[EDITORIAL NOTE: Pulitzer Prize-winning journalist Saul Friedman (bio) writes the bi-weekly Reflections column for Time Goes By in which he comments on news, politics and social issues from his perspective as one of the younger members of the greatest generation. He also publishes a weekly column, Gray Matters, on aging for Newsday.

Category_bug_reflections The late and unlamented foolishness called Tea Bagging for Tax Day on the ides of April, reminds me of one of the earliest lessons I learned in Washington journalism: Beware of the “cheap shot.”

But before I go further, there are a few things that need to be said in the wake of the vicious and hypocritical and dangerous stupidity of the so-called protests, things that most of my colleagues in the press may have missed. I say dangerous because most of the mob-like threats and name-calling, like “fascist,” “communist,” “socialist,” were directed at the first black President of the United States. And the fanaticism, the results of which could be unthinkable, was encouraged by appeals to lawlessness:

1. House Republican Leader John Boehner of Ohio said, “April 15 has long been and always will be a day American workers and their families despise.”

First, the polls show that this is not true; 61 percent of Americans think the tax code is fair. But this is from a man, sworn to uphold the tax laws, among others, who has been taking taxpayers’ salaries and perks for 20 years, and who let out nary a peep when his president sent Ohioans to wars, approved wiretaps and torture and ran up the highest deficits in history while trying to kill Social Security.

2. Talk show foul mouth Glenn Beck, whose baseless babbles charging Obama with the intent to ban all guns, may have led to the murders of three police officers in Pittsburgh, called for secession from the federal government because, he said, it’s driving us to suicide, all the while standing in the Alamo, where Bowie, Crockett, Travis and every defender died as part of their effort to eventually bring Texas into the union.

The Alamo, not incidentally, was restored as a national monument by the federal Works Progress Administration.

3. Texas Gov. Rick Perry, suggested his state has the right to secede from the union, apparently forgetting that that had been tried before, that Texas would blow away if not for federal largesse, and that Texas owes its existence to one of the greatest federal land grabs in American history in 1836 - thanks to Andrew Jackson and his friend, Sam Houston, the state’s first governor and an opponent of the 1861 secession.

Apparently, Perry and fellow governors of the Old Confederacy are still fighting the Civil War for states’ rights (i.e, slavery) as well as the outcome of the last election, refusing to recognize that their side lost in 1865 and Obama won in 2008.

But I have digressed. Like these demagogues, many of us – in the press and among the public – are too quick to join in taking such shots at taxes, the Congress and its alleged pork barrel projects, now called “earmarks.” We do so without thinking. They are easy targets.

And it’s especially easy for television to ridicule where our money goes and how it is spent; it makes for a good two-minute piece. It’s the kind of cheap shot that the late Sen. William Proxmire, [D Wis] popularized with his “Golden Fleece Award.” But most of the time if you looked closer, there was merit in the expenditure.

Thus Louisiana Gov. Bobby Jindal, part of the Old Confederacy cabal fighting against federal money its citizens need, ridiculed the funds in the stimulus legislation that monitored volcano activity. Of course there are no volcanoes in Louisiana, but there is one in Alaska and it’s been erupting. And there is money set aside for monitoring hurricane and levee problems in Louisiana.

Remember how many times during the campaign you heard criticism of funds spent on fruit fly research? Well, because of the nature of the fruit flies’ rapid generational changes, they make for excellent research into all sorts of human problems. And yes, we ought to know why the honey bee seems to be disappearing.

More broadly, the nation’s founders created the House of Representatives and gave it the exclusive powers to tax and appropriate because the “People’s House” is where the most basic tenet of American politics, the utilitarian principle of self-interest, rightly understood, operates. Indeed, what has been derided as “bringing home the bacon” is what members of the House are supposed to do.

In that give and take among members of the House is how roads, bridges, schools, sewer systems and money for states and localities are divvied up. It’s true that some of it may go to a bridge to nowhere, but then again, it may be a bridge that serves a few people who need it.

That’s what government is for. Perhaps some of the things are purchased at too high a price, but the seller and the maker will pay taxes on the money they make.

I am sure there have been many abuses, but over these 200 plus years, the Congress has spent money to build the railroads, the nation’s industrial infrastructure, the interstate highway system and the airports, though this process too often belittled as pork. All of us who closely examine our own lives can find how we’re better off for the pork that members of Congress, and our city and county council representatives, won for us and our neighborhoods. Just the other day, county pork paved the roads in my rural area.

As for taxes, the nonpartisan Congressional Budget Office, reported on April 17 that the average American family paid only 5.9 percent of its earnings in federal income taxes in 2007, a near-record low. As a result, a Gallup survey found that more than half the people said their federal income taxes were either too low or about right.

Former Labor Secretary Robert Reich pointed out that the United States has “the lowest taxes of all developed nations.” Even the wealthiest of Americans this year will pay only 28 percent (slightly more than under Bill Clinton), compared to a 90 percent marginal tax rate during World War II and under Dwight Eisenhower (which worked out to 50 percent after deductions).

According to the liberal Campaign for America’s future, the problem is not so much that taxes are too high, but that many are unfair. Great corporations escape an estimated $14 billion in taxes through loopholes, deductions and off-shore businesses. Individuals who can afford good lawyers or accountants pay lower rates than many less affluent Americans who don’t itemize.

A good example of the unfairness is the regressive payroll tax for Social Security. At the moment, there is a $107,800 cap on earnings subject to Social Security taxes, which means persons earning more – much more - avoid this tax on every dollar they earn over $107,800. And sales taxes on necessities hit the poor harder than the rich.

Still, even with payroll, state, local and sales taxes, Americans pay a smaller percentage of their incomes to governments than most people in Europe. Taxes in France and Germany amount to 50 percent or more. Americans pay less in taxes, but a lot more than most Europeans for public transit. And Europe’s high taxes provide a variety of benefits including paid maternity leave, child care and universal health care.

We get what we pay for and we seem to want a huge military more than we want, say, better public schools and health care.

So next time you celebrate low taxes, don’t complain about the pothole that swallowed your car or the cops who didn’t come quickly enough. Remember the admonition of Oliver Wendell Holmes: “Taxes are the price we pay for a civilized society.” And earmarks too.

At The Elder Storytelling Place today, Johna Ferguson talks about childhood and food in The Asparagus Tale.

Comments

There is a wonderful piece by Hendrik Hertzberg in this week's Talk of the Town in the New Yorker detailing the benefits we would all derive if Texas and the deep south would secede from the Union. It's tongue in cheek, but there is a lot to think about.

damn fine post, ronni!!! love it when you come out swinging!!!

You said it all, Mr. Friedman!


This article was right on the money! Pun Intended...

Saul, you have written a piece here that we should all read and then hit PRINT, so we will have a hard copy to show those folks we know who only get their news and opinions from one source. Fox Noise!

". . .the problem is not so much that taxes are too high, but that many are unfair. Great corporations escape an estimated $14 billion in taxes through loopholes, deductions and off-shore businesses."

Yes, exactly.

I am not in favor of confiscatory taxes for anyone, for several reasons. However, despite our taxes being low for the most affluent citizens, and large corporations, money is still being secreted in offshore accounts, or otherwise sheltered.

The payers of taxes have become the ever shrinking middle class. It is to them Obama's policies should make the most sense.

Along with Bobby Jindal, Sen. Susan Collins from Maine shares blame because of her insistence that "It doesn't make sense to include $870 million for pandemic flu preparedness." She got her way before she would support the stimulus package.

We need government to work for the greater good. Most Americans do not want a European-type socialist state, but we do expect safe food, clean water, non-porous borders, affordable health care and honest elections. These are services only our government can provide or assure, with tax dollars. It is our government, after all. We own it; it does not own us.

ATTENTION: m.e. and anyone else - I want to be VERY CLEAR as it is stated at the top of this post, Reflection columns are written by Saul Friedman and not me. There are links at the top to his bio and his weekly Newsday column.

Very well said! There are a lot of Americans who, at this point, wish they had to pay taxes -- their jobs are gone.

I've always thought of taxes as the price I paid for living in the greatest country in the world. And yeah, I complain when I see the gov't doing stupid or unfair things but I also thank God that I was born here and have the right to complain. Most of the world is not so blessed.


I am copying this post and sending it to a few die hard Republicans who mouthe the banalities from FOX network, Rush, Beck, et al.

It's curious that the congressional leaders making the most noise about earmarks -- and they are mostly Republican -- are curiously silent when it comes to earmarks for their own states!

And it's disgusting how these same people snatch out of context earmarks that are essential to the national well-being.

A case in point is honeybee research. Bees pollinate almost all our food crops, yet they have been dying off at an alarming rate -- enough so that our food supplies are in danger. Research is urgently needed to stem this decline.

Yet, out of context this earmark seems to be silly, which is exactly what the anti-earmark crowd wants you to believe.

I'm not saying that all earmarks are wonderful, but as Mr. Friedman points out, they have built much of the country's infrastructure and have provided basic research that led to more jobs, more economic growth and a higher standard of living for most Americans.

Those congressional leaders who seek to sensationalize little-understood earmarks are engaging in the worst kind of fear-mongering. They should be ashamed of themselves for pandering to such ignorance, but of course, they're not!

Saul, great post. Thanks for sharing your expertise and insights with us.

Since you mentioned fair and unfair taxes, I have a question. Do you think that the taxing of Social Security benefits is fair?

From the time I was 18 until I retired, I was fortunate to have never been without a job. So, over the years I've paid my fair share of income taxes, and every year paid the maximum possible amount of Social Security taxes.

Now, even though my wife and I are nowhere near wealthy and fall somewhere near the low end of the middle-income bracket, I have to pay income taxes on my Social Security benefits. And I'm sure that there are many, many others required to do the same.

To me this is unfair, especially since Congress thinks nothing of voting themselves pay increases, the best health care benefits available (for life), and all sorts of other perks.

Though I've always felt that it was my duty as an American to pay my share of taxes while I was employed, this unfair tax on my Social Security benefits that I contributed to all my working life, leaves me feeling somewhat betrayed by the lawmakers (Congress) who enacted it. You can bet your life that they won't vote for anything that diminishes their retirement income.

Amen. Thanks for an excellent column. I live in a rather progressive community and was pretty horrified when I saw the things on those tax protest placards. I realized I still am always surprised at the depth of hatred some people have.

Let me explain about taxes on Social Security. In 1983,the Greenspan Commission and Reagan approved bringing all federal employeed, including members of congress into the SS system, and among other ways to build up the trust fund to pay for the boomers, it imposed a tax on 50 percent of Social Security benefits for persons earning over $32,000. Then, under Clinton, when Republicans sought to cut Medicare funds, Clinton agreed to raise the amount of SS subject to tax to 85 percent for persons earning over $44,000, with the proceeds to go to Medicare. Lawmakers on SS pay these taxes. But I have proposed elsewhere that the tax be suspended or the earnings amount raised because so many retirees have lost so much in their savings plans.

The Fair Tax: The only sane idea out there.

Saul, thanks for the explanation of the history of why SS benefits are subject to being taxed.

I still think that it's unfair, though. Not only is up to 85% of one's SS benefits now subject to being taxed, but the tax calculations are based on one's Adjusted Gross Income (total income, including SS benefits, before deductions).

I don't remember the exact numbers, but the AGI at which a single filer starts paying taxes on SS benefits is around $30,000 and for a couple filing jointly it's around $32,000. These are ridiculously low income levels to use for triggering the taxation of SS benefits.

I hope that your proposal to have the tax suspended or the earnings amount raised is successful. This economic collapse has been disastrous for too many old people.

Let me add my cheers to others. Thank you, Saul.

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