Taxes

Let’s say we all want to have a road outside our houses.  We can each hire someone to come out, do an estimate, and then bring a bulldozer and cement mixer over to pave our twenty feet of road.

It is said that only two things in life are certain: death and taxes.  At least, that used to be said; you don’t hear it so much any more.  These days, what you hear is that taxes are an onerous burden that should be abolished.  Republicans accuse Democrats of being “tax-and-spend liberals,” and Democrats defend themselves by claiming that they will neither tax nor spend. 

President Obama campaigned on a promise to cut taxes for everyone making under $250K, and apparently, according to a recent New York Times article, he’s done it: “What if a president cut Americans’ income taxes by $116 billion and nobody noticed?” the article inquires.   Apparently, the Democrats’ “signature tax cut” saved American taxpayers $800 for married couples and $400 for individuals, but that savings “has gone largely unnoticed.” 

The reason for this, the article goes on to state, is that while the Bush administration sent out tax “rebates” in the form of checks, the Obama administration reasoned that people were much likelier to spend a less obvious infusion of cash, as opposed to depositing it in a savings account, and thus it would be better for the economy to disperse this stimulus money over time by reducing taxes withheld from paychecks. 


Unfortunately, at the same time, state taxes and health insurance costs
rose, so evidently no one noticed the decrease in federal taxes.  For
this reason, it is widely perceived that federal income taxes were not
cut at all.  In recent interviews, President Obama has taken pains to
point out that his administration did, in fact, cut taxes, though a
recent poll indicates that only one in ten people is aware of this.

Reflecting on all this, I can’t help thinking what a sad pass it has
come to when Democrats must defend themselves by pointing out that they
did, in fact, cut taxes and by promising to cut them some more.  Call me
an old fogey, but I really don’t get it.

I look at it like this: when I go to Costco, I have to stand in a really
long line so I can buy huge plastic bags of broccoli that I will never
be able to finish, a sack of potatoes that I can barely lift, and a
giant bottle of capers.  The store is always full to bursting–yet each
of us has paid an annual fee that gives us the privilege of shopping at
Costco.  Do you ever see groups of people standing outside the store
with picket signs, insisting that Costco should be free?  Of course not:
because obviously, the store needs to make some money in order to funds
its operations, and if it wants to provide us with capers at the best
price in town (eat your heart out, Trader Joe‘s), it needs to take in
some cash up front to fund it.

Everyone seems to get this: that if we all come together and pay Costco
fifty bucks each per year, Costco can do its job and–because it is
dealing in high volume–save us money in a variety of ways. 

This is basically the way taxes work: let’s say we all want to have a
road outside our houses.  We can each hire someone to come out, do an
estimate, and then bring a bulldozer and cement mixer over to pave our
twenty feet of road.  But if we all get together and hire the same guy
to do it, he can do the job for a lot less.  That’s how it works.

I think everyone familiar with the concept of membership gets the basic
principle here: if we pool our resources, we can afford to do things
that we couldn’t afford as individuals.  Another example: a friend of
mine lives on a block in Baltimore where a group of neighbors have
decided to pitch in and buy a snow-blower.  I was surprised to hear from
her that a good snow-blower can cost a thousand bucks, and my fantasies
about buying one for the next big snowstorm went right out the window. 

Taxes, snow-blowers, same idea: should everyone on her block buy his or
her own snow-blower?  Of course not: if they all pitch in, they can
share. 

Duh, you are saying by now.  But if this is so obvious, why are people
so averse to taxes, which fund all kinds of things we really are in no
position to pay for as individuals.  Should we each hire our own police
officer?  Should we each start a tiny school just for our own kids

My husband walked in while I was writing this and I told him what I was
writing about.  “That’s like my idea of Voluntary Taxation,” he pointed
out.  I had, I confess, totally forgotten about his theory, but he
reminded me.

“Voluntary taxation works like this: everyone who doesn’t want to pay
taxes can opt out of it.  Those who don’t pay taxes–‘non-tax-paying
citizens’–have to turn in their mileage annually so we can charge them
for the use of the roads.  Retail.”  He added, “The non-tax-payers could
probably negotiate pretty good deals with the local schools to include
their kids–$10k per teacher, say.  For snow removal–they’re on their
own.  Oh, and have your credit card and insurance information ready when
you call 911.”

He told me the story of his friend, who recently received a large bonus
check from his job.  The friend had complained that he had paid 50% in
taxes.  My husband looked at his pay stub.  “You paid 16%,” he told his
friend, very kindly not adding, “you moron.”  Money had, it was true,
been taken out for the friend’s health insurance, 401k contributions,
and social security–and according to a recent article in the Huffington
Post
, this is a common error: “many people simply look at the difference
between their gross pay and their take-home pay and blame the
government for the disparity.” 

In fact, the article says, 47% of Americans paid no tax at all in
2009.   Yet to listen to recent political rhetoric, you’d think people’s
pockets had been picked bare by the federal government.

So where does all this anti-tax fervor come from?  Clearly, many of us
have financial problems at the moment, and historically, economic crisis
loves a good scapegoat.  What I don’t understand is why the anger of
the Tea Partiers is not directed at, say, multinational corporations who
shelter their operations from taxes and/or move jobs overseas.  Why
aren’t people waving their kooky signs outside the headquarters of
Goldman Sachs, for example, which pays around one percent in taxes,
thanks to their creating offshoring,  or General Electric, whose CFL
light bulbs are imported from China?  

That was a rhetorical question: I don’t really want to speculate about
why people feel this way, since discovering the answer might be like
looking under a rock.  What do I want?  I guess I want them to think
this whole thing through: do the math.  I had a student recently who
told me that when he was in the Navy, he was on a ship that went through
the Suez Canal, and every time it did this, it cost a million dollars. 
Somebody has to pay for that, right?  If not us, then who? 

By the way, that quote about death and taxes?  That was from Benjamin
Franklin
.  What he said was this: “Our Constitution is in actual
operation; everything appears to promise that it will last; but in this
world nothing is certain but death and taxes.”  
In our time, one is forced to conclude, nothing is certain any more.

About the Author

Abby Bardi
Takoma Park expatriate Abby Bardi explores the wickedness of modern life in her Voice column, "Sin of the Month." Born and raised in Chicago, Abby has worked as a singing waitress in Washington, D.C., an English teacher in Japan and England, a performer on England’s country and western circuit, and, most recently, as a professor at Prince George’s Community College. Author of "The Book of Fred," (Washington Square Press: Simon & Schuster 2001), she is married with two children and lives in Ellicott City, Maryland.