Thursday, October 5, 2017

In defense of taxes

It seems to be true that nobody likes taxes. For nearly 40 years, the Republican Party has built its strategy and its appeal on promises of lower taxes and has largely succeeded with the tax-hating electorate.

But taxes, rather than a nefarious evil, are necessary. Without taxes, government on the local, state and federal level cannot function. Voter ire against taxes can easily be fired up over reports of fraud in federal contracts, bone-headed spending, such as the Internal Revenue Service's $7 million contract with Equifax to prevent hacking and fraud in IRS files. This no-bid contract came just weeks after a massive hacking of Equifax data that had endangered the financial security of millions of Americans.

Taxes need to be cut from time to time. Tax cuts can spur spending and help speed recovery from a recession. Fast-rising wages and salaries can result in surpluses in the federal treasury (but that is rare). John F. Kennedy bucked his own party to pass a massive tax reduction in 1963. Ronald Reagan's tax cuts 30-plus years ago spurred economic growth but also ballooned the budget deficit (because he didn't get the spending cuts that should have accompanied the tax cuts). Since Reagan, every GOP presidential candidate and most GOP candidates for lesser offices have touted tax cuts for whatever ailed the country.

Tax-cutting continues to be the signature policy of nearly all GOP candidates, and Democrats have learned that opposition to popular tax cuts can be politically suicidal. Like nearly all Americans, I wince each time I write a check to the IRS or look at the withholding in my paycheck, but I have to admit that I want those government services my taxes pay for. While tax cuts sound great, consider what things federal taxes pay for:

° National Defense. The United States has by far the largest military budget on Earth, but few taxpayers want to cut the military.
° Medical and health initiatives. Annual flu shots, research into causes of cancer and other diseases, epidemic controls, standards for medical professionals and facilities.
° Highways, airline safety, passenger trains, and other transportation initiatives. Without federal gasoline taxes, modern highways would not exist.
° Food safety. Federal inspectors assure that meat, vegetables and other food items are safe to eat and are properly labeled for buyer safety.
° Drug safety. Federal testing and inspections keep dangerous or bogus drugs off the market.
° Interstate commerce. Regulation of long-haul trucking, shipping, water-borne navigation and port safety are all paid for by taxes and save lives every year.
° Communications. Federal regulations provide the basis for modern communications from telephone wires to WiFi to the internet itself. Without federal rule-setting, these tools we depend upon would never have developed.

State and local taxes go to even more popular and essential services, including:
° Garbage pickup and recycling services.
° Streets, sidewalks, bikeways, hiking trails and parks.
° Regulation of development and construction to prevent annoyances such as a pig sty next door to a residence or disasters, such as a building collapse.
° Public education, paid for locally and statewide, to ensure an educated workforce and a knowledgeable citizenry who can make democracy work effectively.
° Police departments to protect individuals and property.
° Fire departments to prevent and put out devastating fires.
° Emergency medical services that improve chances for victims of accidents, heart attacks and other medical emergencies.
° Colleges and universities that open bright futures for young people, increase upward mobility and improve economic opportunities for the entire state.

Unfortunately, tax-cut fervor at the state level has led to sharp cuts in K-12 and higher education. Damage from these cuts might not be apparent for a generation but could be disastrous.

A quarter-cent decrease in the sales tax or a 0.2 percent cut in the personal income tax will hardly be noticed an individual taxpayer but can make a huge difference in the state's ability to provide services needed and wanted by taxpayers. The cumulative effect of a fraction of a tax can help all residents, including those who are not directly affected in particular government services. All benefit when services help build a caring, upwardly mobile society.

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