Wednesday, April 15, 2015
Happy Tax Day. Or not.
Wednesday is Tax Day, the dread April 15, when income taxes are due to the United States government, at least for now. American colonists cried "No taxation without representation," which, as befits the streamlining of modern life, has become simply "No taxation.'
Twenty years ago, the idea that American citizens should not pay taxes was limited to the lunatic fringe, who would pick over the Revenue Act of 1913 and write elaborate, self published manifestos explaining why federal income taxes were a Wilsonian conspiracy against the Constitution and natural law. Now mainstream Republican candidates chant it as a mantra.
Look at the first three Republicans to charge out of the gate in the 2016 presidential race.
"We need to abolish the IRS" Texas Sen. Ted Cruz told a conservative conference last month—though not, to my surprise, because taxes won't be collected, but rather because a flat rate will be charged so taxpayers will merely write their salary on a postcard, multiply it by a universal figure and be done.
Internal Revenue Service commissioner John Koskinen, living in the reality-based world, immediately pointed out that even if Americans had a flat tax, and filed their returns on Ted Cruz's postcard, there would still need to be an IRS collecting the money and confirming the cards.
"Someone has to follow through on all of that," said the killjoy.
Kentucky Sen. Rand Paul also talks wistfully about eliminating the IRS, and has a number for his flat tax—17 percent—which, like all flat tax plans, is a half-clever way of saying, "Tax breaks for everybody!" (If the figure sounds familiar, Steve Forbes ran on a 17 percent flat tax in 2o00. Historical note: he lost).
Marco Rubio doesn't want to cut taxes for everyone, just the middle class and the rich, which is code for everyone since poor people don't pay much income tax.
The Tax Policy Center estimates Rubio's plan would cost the government $2.4 trillion over 10 years.
Which is the entire point. The bedrock of the Republican party is the notion that government is bad, by definition. Since cutting specific functions—health care for vets, say, or milk for poor children—draws howls of protest and can raise a tingle even in anthracite Republican hearts, the focus is shifted to impersonal dollars. Cut taxes, ignore what those taxes go to. Starve the body and the head dies.
If you try to get at why government is bad, they'll say it's corrupt, or incompetent, or domineering, or illegal, or all four. My theory is that they despise the people government serves most—especially the poor, minorities—and since publicly despising them has gone out of fashion, they attack the government as a surrogate. I can't prove this, but then they can't prove that trickle down economics works, and that never stops them form insisting that giving money to the rich somehow profits the poor.
Speaking of facts-- for those eccentrics who, like me, still find facts meaningful -- is that our taxes are low however you compare them.They're low internationally: our federal taxes top out at 39 percent. In Great Britain it's 45 percent, in Australia, 50 percent. (Comparisons are difficult, with each country having a complicated web and local and national taxes, but that suggests issues are nuanced and complex, and why should I be the only one pushing that crazy idea).
U.S. taxes are also low historically—our top federal income tax rate is 39 percent. In the 1950s, was a jaw-dropping 91 percent. Rich folk still worked (nobody actually paid that much—again with the nuance— with deductions, the top effective tax rate was 70 percent. The economy boomed).
Taxation is one of the most common features of human organization, along with baking bread. And there is astounding consistency. Today the top 10 percent of U.S. wage earners pay an average of 19.2 percent in federal taxes. That's almost exactly the rate paid in ancient Egypt. "Joseph made it a law over the land of Egypt unto this day that Pharaoh should have the fifth part" it says in Genesis.
To be fair, I should mention the tax position of Democratic president candidate Hillary Clinton, who entered the race earlier this week. She feels the wealthy aren't taxed enough, aren't paying their fair share in society. Talk about crazy...