That's right. I said it. Taxes are a good thing for America. Sadly, after about 3 decades of misleading GOP propaganda about what an evil burden taxes are on people and businesses, most Americans have forgotten why taxes are important. As a resident of Wisconsin, I face a higher tax cost than in many other states. But I don't mind, because I want the things that my tax money buys.
I would like to take a look at some of the misconceptions folks tend to have about taxes, many of them propagated by Republican party talking points, and also some of the benefits that come from taxes.
The property taxes in the State of are too high and need to be capped.
As a resident of Wisconsin, this issue is brought up almost weekly in one news medium or another. It's true that Wisconsin residents pay one of the higher property tax rates in the country. But what gets lost in bemoaning the tax burden is the benefit that goes with those taxes. Wisconsin ranks near the top in per capita spending on education and environmental protections; issues which Wisconsin voters continually support in elections year after year.
Now, the Republicans would have Wisconsin residents believe that it is government waste causing such high taxes; in fact, our Democratic governor has even echoed such sentiments. It's true that government should be managed as efficiently as possible. That's just good fiscal policy. There is no need, for example, to hire 10 state employees when 8 will suffice. Using tax dollars to create jobs as an end in itself is not something the government should be engaging in except in extreme circumstances, ie.: The Great Depression or the Gulf Coast reconstruction.
However, while all politicians and residents of any area will agree that government waste is a problem, no one can agree on what services they'd prefer to do without. Financially secure citizens don't want to pay for public welfare. Residents in Oklahoma don't want to pay for a bridge in Alaska. Those who find political bias in public broadcasting don't want to support the CPB. This list could go on forever but the point is: that's why we have taxes. Taxes take the burden of these public services and spread them evenly over the population based on the financial means of each individual. Those with more have a moral obligation to give more, as they have benefited from the economic opportunity available to them in America.
Also, in regard to property taxes, they are inherently unfair due to their regressive nature. They affect the poor more than the wealthy and they affect individuals exponentially more than businesses, which can afford attorneys and accountants to challenge rates and assessments. As an accountant, I've seen countless examples of businesses paying pennies on the dollar in property taxes compared to individual residents. This has the effect of starving local municipalities of revenue, resulting in poor roads, poor schools and a loss of services. These problems inevitably lead to voter referendums, particularly for school funding, which are voted down about 90% of the time because the voters are already paying high property taxes to subsidize breaks for large corporations. Before the voters of Wisconsin complain about their high property taxes, they really should ask why the Republican-controlled legislature keeps passing legislation giving favorable tax breaks to wealthy corporations that really don't need them.
Tax breaks for wealthy business interests help spur economic growth.
Rubbish. Supply-sider, free-marketeer spin designed to sell the American people on legislation that actually harms their economic interests. Taxes are a secondary consideration for business growth and expansion and really only come into consideration when other factors are equal. For example, manufacturing companies require extensive distribution networks to move their product to suppliers. They cannot do this without good transportation infrastructure such as roads, rails and ship docks. However, such infrastructure is very expensive to build and maintain. Thus, tax money is used to mitigate that cost and build a good infrastructure to attract businesses. Any savvy business manager is going to be plenty willing to weather higher taxes in exchange for a well-maintained infrastructure. Cutting taxes to attract businesses at the expense of vital services is a losing proposition that shifts a greater tax burden on those least able to pay.
Further, giving income tax breaks to businesses, under the auspices of an incentive to grow and create jobs, is also poor fiscal policy. Cash flow from tax reductions is not incentive to expand; product demand and competitive advantages are, to name a few. Tax cuts targeted to the poor and middle class result in greater demand for consumer goods, thus spurring business growth. Tax cuts for businesses result in outsize dividends to wealthy shareholders primarily and, not coincidentally, are an awfully nice "thank you" gift to wealthy political donors. They do little, if any, economic good and further concentrate wealth at the top of the economic ladder, a sure recipe for disaster in a capitalist democracy.
Taxes on dividends are unfair because they represent "double taxation".
Dividends are not taxed twice. This canard gets trotted out at least once by every Republican president and since the average American doesn't have much of a stock portfolio, it tends to get a sympathetic ear from many conservatives simply because they don't understand why it's false. Corporations pay taxes on their profits. Individual shareholders pay taxes on their dividends. It's that simple. However, for a true example of double taxation, one only needs look at the payroll tax. Workers are charged payroll and income taxes on the same gross earnings, a very regressive tax policy which affects the poor and middle classes to a much greater extent than the wealthy. And, speaking of wealthy, that's exactly what you have to be to have much earnings from dividends anyway. Take a $20 stock with a $0.25 annual dividend: you would have to own about $1 million worth of this stock just to have dividend income equal to the poverty level. Certainly taxes on such are not a significant burden on any investor.
The estate tax is really a "death" tax and strips families of their wealth.
Yet another example of conservative Republican dishonesty on fiscal matters that don't affect most Americans. Are you sensing a theme yet, dear readers, because you should be. The estate tax is not a tax paid by the person dying. It's paid by the person inheriting the estate. Plus, it only affects estates worth more than $2 million ($4 million for married), thus excluding 98% of Americans anyway. It's worth noting that in during the Gilded Age of the "robber barons", a definite nadir in responsible corporate culture, it was considered vulgar to pass along great wealth just to one's offspring. At that time, the estate tax was 90%! It's an amazing triumph of political chicanery that the Republican party has managed to sell impoverished conservatives on the notion that it is only fair that a wealthy heiress like Paris Hilton not have to pay one penny of taxes on the unearned billions she will one day receive from her parents.
Samurai Sam is nothing but a "tax-and-spend" liberal.
Damn right I am! I want the services and benefits that government can provide and I believe it's my responsibility to help pay for them. I am proud to be a tax-and-spend liberal; it's a much more socially and fiscally responsible position than being a borrow-and-spend neoconservative like George W. Bush. Without taxes, there would be no middle class in America. Taxes help re-circulate wealth and prevent it from accumulating with the wealthy elite. Given the Republican policy towards taxation, it should be more apparent than ever just what constituency they are representing (Hint: it's not poor Evangelicals in Alabama).
I hope this post doesn't come off as too dull and pedantic, both because I believe wholeheartedly that this is a crucial issue facing our country and because of how that would reflect on my chosen career! This latter-day Republican fiscal policy towards taxation is both irresponsible and cuts against the ideals our country was founded upon. It represents a real danger to our economy and our way of life.
I leave you with some wiser words than mine:
The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state - Adam Smith, An Inquiry Into The Nature and Causes of the Wealth of Nations, 1776