Monday, July 10, 2006


A Thought about Taxes

How much of the opposition to progressive income taxation is really about the richers not wanting to pay money as (to use Nixon style sources and tilt at strawmen in the manner of a Sen. Joe) some liberal Democrats might presume? I suspect that outside of a few liminally rich people in (ex-)urban areas who have a high cost of living and really could use a few extra bucks, the marginal utility of the money most people who stand to pay less in taxes in a regime other than one based on progressive income taxation is minimal. Also, some people who know well enough to be able to add 2+2 still have issues with progressive income taxation.

I suspect that a lot of the richers who have a beef with progressive income taxation really just would rather starve the government for reasons that go beyond the mere expense of paying an accountant to help them pay less than their fair share of taxes (e.g. dismantling the safety-net that gives people a meaningful alternative to supplying their labor, thus creating elasticity in the labor market, which benefits society but hurts the profits of certain businesses). And those in lower income brackets might not identify with the richers so much as we Dems may think -- there is also the matter of the complication of income taxes: the forms, the audits, the paperwork, etc.

I wonder if people wouldn't mind taxation so much if they felt that they didn't have to be or hire tax-accountants in order to optimally fill out their income tax forms? Given that, in large part, the anti-government feelings on which the GOP feeds are themselves fed by frustration over filling out income tax forms (either you pay money to have them done right and get the deductions you feel you deserve or you do them yourself with the attendent frustration and knowing you missed an opportunity to get more of refund check) as well as the incompotence and money grabbing of local governments (*), honest to goodness tax reform (e.g. not what the GOP passes off as tax reform), should be part of the Democratic agenda -- it's not just good policy but also good long term political strategy (btw: Dems. used to be good at using policy to forward long, not just short, term political strategy -- now the Republicans seem to be the only outfit which can do this, although the Republicans still, though anachronism and projection, still pretend Dems. do this) to push through some tax reform. Not only would it preserve progressive income taxation and head off Republican attempts to damage the system at the pass (nothin' wrong with thinkin' strategically when thinkin' of policy, folks) but it also would, if successful, remove a major irritant driving people to vote Republican.

I say, add an income tax reform to the Dem. "Contract with America" we should have (but under a different name, so we cannot get accused of having no new ideas based on borrowing this particular old one). I know some say that an opposition party need not and ought not to provide specific policies that it cannot impliment anyway and only serve to focus the other party's attacks ... but Dems. who say this are confusing actual policies with "policies" (TM) -- a critical weakness of ours that often causes us to bore media talking heads and get them surly with us as well as to give voters the impression that we are wonks (it's a bad sign for democratic governance that this is the case, but voters dislike wonks). Dems. need to offer the latter (as in a Contract with America) not the former.

btw -- is part of "what's the matter with Kansas" the entrenchedness of Dem. political machines in Midwestern cities? All politics is local, or at least regional, remember. Perhaps the reason why rural/suburban voters hate Democrats has nothing to do with our stands on social issues, etc., and everything to do with how horribly Democrats are running the government in cities like St. Louis and Chicago. Perhaps if the national party could force local political machines to clean up their acts, people in the Midwest would stop associating the Democratic party with the graspingly corrupt and incompetent local governments the local Dems. run? I mean, if my image of the Democrats was based solely on how the party operates in Central NJ and I had no ideological reason to vote Democratic, I too would vote for the evil that's far away in Washington, or more likely stay away from the polls alltogether, over the corruption that is really making my life miserable (in terms of speeding tickets, registration checks getting "misplaced", etc.) close to home -- even if I really didn't agree with the Republicans, I might find them more "moral" based merely on them not being the corrupt government of St. Louis or Chicago or Middlesex County. Something key then, that we Dems. are missing from our national electoral strategy, is some real cleaning house regarding corruption in local government. In general, it's not good politics to eat your own as Dems. tend to do on a national level (btw -- all this talk of "purges by the left" from the DLC wing of the party is just so much projection considering their attempt to purge the party of anyone who isn't Republican-lite and their continual eating of our own with their continual war on strawmen lefty Dems.), but some purges at the local level may really be good politics in that they will obviate another key irritant driving people to vote Republican as well as help to establish the rule of law (rather than graft) in people's lives at an important level (see Ted Rall for more on this subject) which will ultimately make them more respectful of the need to have a federal government bound by law and Constitutional tradition -- which is also a case Dems. have to make.

So let's clean up the tax code and clean house!

Speaking as an accountant, whose job often involves helping the wealthy avoid their fair share of taxes, I suspect another big objection is the idea of wealth redistribution. I believe this fuels the outcry against the inheritance tax as well. Like any aristocracy, many of the wealthy in the U.S. develop a sense of entitlement to their wealth; as though by personal merit alone they gained what they did. They fail to recognize any debt to the commonwealth for helping set the stage for economic success. There are many more Gordon Gecko's than Warren Buffet's out there.

As to cleaning up Dem cities, that's a mixed bag I think. True, the Daley administration in Chicago has had enough labor scandals, pay-for-play and cronyism to make any GOP lobbyist proud. On the other hand, Daley's made many noticeable positive improvements to the city, its infrastructure and its help for the poor. It's all a matter of how much corruption the public will stand so long as its needs are being met.
many of the wealthy in the U.S. develop a sense of entitlement to their wealth; as though by personal merit alone they gained what they did.

If it were just the wealthy who had this sense, anti-tax rhetoric would not be politically feasible: even though money talks, in a democratic republic, there are still, even in our weakened state of democratic governance, still more poor and middle class people voting than rich ones.

What I've noticed, and it's really odd, is that there is a tendancy among many in the working and middle classes (especially those who feel less secure in their middle class status, e.g. children of immigrants) to be, shall we say class-war-fifth-columnists. I've known many a middle class person who himself has adopted the attitude of "the rich deserve what they have, why punish them by taxing them more?" I cannot quite understand this plutolatry: I'll grant that not all rich folks are crooks and maybe some of us lefty levelers perhaps operate merely out of a bit of jealousy of wealth -- but why would someone decide to be extra-fair to those who can afford to be treated, er, a little unfairly?

It almost goes back to the saying "those who are merciful to the cruel are cruel to the merciful". Not that all wealthy are cruel, but why give deference to the rich because they "earned" there money? The odd thing is that the very people who defer to the rich so much are the same who claim to live by that saying, e.g., in their thinking on the Arab/Israeli conflict -- but of course, there is a huge issue when applying that saying or similar ideas to such a conflict. E.g., some would say that "Israel must respond with overwhelming force to show 'them' Israel will not take getting attacked lying down" -- aside from the lack of evidence that this strategy actually works, there is the issue of who "they" are: it's one thing to retaliate against those who have attacked you and to realize that to be merciful to such cruel people is cruelty rather than mercy ... it's another thing to mis-identify who "they" are and go after people who are themselves rather innocent ...

I guess there is a question or two -- why do people identify with the people they do? And why do people mis-identify the people they do?
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