Time to cure taxaphobia by Paul M. Bray

I am at a loss for understanding how the USA became a nation with taxaphobia (my label for the phobic opposition to taxation).

Coming of age in the 1950s, I didn’t give a great deal of thought to taxation other than to think that the USA benefited from a progressive tax system where those who made the most money paid the highest taxes to provide for public goods . It made sense to me. These public goods included the infrastructure and public safety that created the conditions allowing the wealthy to be wealthy and to safely enjoy their wealth. If we want (and who doesn’t want) good means of transportation, quality education, public health and safety, a healthy environment and parks to highlight primary public goods, paying taxes seems like a reasonable necessity.

Somehow the supply side notion that cutting taxes stimulated the economy started the erosion of progressivity in our tax system. It was a slippery slope to the point where progressivity or taxation at a higher rate for those with the most money began to disappear. The absurdity of this was highlighted perhaps a decade or so ago when a Wall Street Journal editorial recommended increasing the tax rate for lower income tax payers so they would better understand the horrors of taxation and come to oppose a tax burden on the wealthy.

The accepted wisdom beginning with Reagan and moving on to George Bush and to the Republicans in the current Congress as well as the current thinking in many State Capitals is that taxes should not be raised for anyone including the rich and need to be capped if not decreased. (Former President Clinton called this a “theology” when he spoke at the University at Albany.)

Now when politicians and pundits say we all must pay our share, they mean public employees who are being asked to pay more for their health insurance and their defined pensions as well as accept cuts in their salary, assuming they are not fired and loss their salary. Of course, an increase in taxes, even of the wealthy, should not even be thought about. How did we come to being this way?
Whatever the reason, it isn’t lack of wealth. Three years ago I edited an article on TOW or the transfer of wealth that will take place as the baby boomers age. This transfer between generations has already begun and it is estimated to total $41 trillion (that is trillion with a “t”).

Deficits at the Federal and state level have many causes including the “great recession” and excessive spending. But, as the New York Times points out in an editorial: “…a substantial part was caused by deliberate decisions by state and federal lawmakers to drain government of resources by handing out huge tax cuts, mostly to the rich. As governments begin to stagger from the self-induced hemorrhaging, Republican politicians like Mr. Boehner and Mr. Walker cry poverty and use it as an excuse to break unions and kill programs they never liked in flush years.”
There are many fellow citizens suffering difficult financial conditions, out of work, carrying large student loan debts and/or losing their home and so forth. But there are also people with a lot of money, some with an obscene amount of wealth. How did these people become immune from increases in taxation? This taxaphobia does not bode well for our nation unless we want to be a nation solely for the rich.

I am pleased that the State Assembly is now committed to supporting extending the “millionaires” tax for another year. I believe in frugality and practice it in my own life. But I also believe in fairness and having a caring society. When the budget is decided, we will know whether New York State continues to be a progressive State or whether it is going the way of States like Wisconsin, Indiana and Ohio that want to beat down the middle class and, of course, wonderful Texas which has no income tax but has more debt and poorer education than we and most other states have.

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One Response to “Time to cure taxaphobia by Paul M. Bray”

  1. Douglas Boettner Says:

    Paul, excellent article and very well stated. As I have written in the past in my column in The Empire Page, I truly believe the “Me,Me,Me” generation of the 1970s and 1980s was a large factor in all of this taxaphobia. Personal and corporate greed and power corrupted a majority of the people making all the wealth in the country. It wasn’t enough to report a dividend of $1.20 a share to stockholders, it needed to be $2.40 a share, and that way it would justify increasing the salary of the CEO to $80 million a year from the $40 million he was earning. Of course who was suffering was the end-user consumer who now is paying more for the products that are produced by that same company.
    The optimization of wealth is admirable but at what cost to the general economy? Moneym power and greed are the Three Deadly Sins plaguing our great nation.

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