February 3, 2011

Happy Birthday Income Tax

On February 3, 1913 the 16th amendment was ratified establishing the right of congress to impose a federal income tax. Income tax has been feeling blue for a number of decades now due to bad press so I thought that I would make a birthday cake and say “Happy Birthday.”

One of the reasons for establishing an income tax was to pay back government debt. Unfortunately as we are all now painfully aware, debt on both the federal and state level has become so high that income tax alone will not pay it down. But neither will resorting to cuts alone. From my readings in recent history, it appears that the most effective way of paying down debt is by taking a three-pronged approach; curbing waste, by making budget cuts and by raising taxes. That is how the budget was balanced before and it can be done again.

Talk of raising income tax has been so persistently taboo for so long that it would be difficult indeed to elect a conscientious leader who can be frank about taxes and how we won’t be able to get ourselves out of debt without raising them. This is probably because in the public forum, the link between taxes and the common good has been disconnected by public figures seeking short term gains for themselves over long term gains for the public. It has been these figures that promulgate the notion that a good portion of taxation is nothing more than the work of pick pockets - justifying their point of view by the presentation of half truths. If I say to a voter, for instance, “would you like to keep all the money in your pocket or give it to the government?” of course the answer will be “no thanks.” But if the question is phrased more realistically as “Would you like to keep all the money in your pocket or would you like to contribute one dollar of it so that your children can go to public school and you can have a public library, a police force and emergency services?” then the answer might be different. Yet on account of propagandizing, the latter more rational connection between income tax and public services is lost. Truly, it often seems that a call for the “common good” is met with a vituperative voice or two ringing out the words “communists” or “socialists.”

One popular way self described fiscal conservatives turn the public against taxes is by instilling the idea that taxes are wrong if someone other than oneself benefits. By this logic I should take umbrage at the fact that although I have no children I must still pay taxes to educate the children of others. I don’t take offence at that. In fact, the county where I live built a children’s water park by means of a penny sales tax that I contributed to as a retailer. I am happy that they have their park. I don’t hunt and prefer cat ownership to dog ownership. But part of my tax dollars support an annual Coon Dog Hunt. I am happy that they have their Coon Dog Hunt.

Everyone feels ambivalent about income taxes. It can feel unsettling to hand over hard earned money and not have a clear idea about how well it is being spent. But it is wrong to manipulate such feelings for political gain and to fuel unrealistic expectations of service without pay. I would rather see vital state jobs preserved even if it means that my taxes will go up - provided that this burden is shared equitably and that other methods of generating revenue are pursued as well. Better that we all pay a little more (albeit on a sliding scale depending upon income) in order to build ourselves back up, have our health care, and to generate more taxpayers rather than swell the ranks of the unemployed and uninsured.

Needless to say, the tax codes need to be reformed and taxes need to be made more equitable. And of course there needs to be more transparency and accountability in government spending. But this should be done with responsible conversation and public debate rather than by courting tax payer rage and hiding the obvious.

You make us groan and argue amongst ourselves, but you give us education, protect us from downturns, help us in our old age, give us our libraries, our military servicemen and women, our roads, bridges and hopefully one day - our health care. So Happy Birthday to you Income Tax and many Happy Returns.

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