The Upside of Taxes

Corporations Not Paying TaxesApril 15 has never been considered a day for celebration, and it’s especially tough to pay taxes when so many of us are struggling financially.

But the real problem isn’t taxation. Our real problem is the new “bipartisan” drive toward austerity, a mad obsession which runs against the 75-year political consensus of both political parties. Once our leaders understood government’s vital role in a healthy economy.

No more, apparently. Today’s new corporate-sponsored cost-cutting craze is merely the latest policy designed to enrich a powerful few at the expense of the many, and today’s anti-tax agenda is being used to make sure it succeeds.

Taxes provide us with many important services, often far more cheaply and efficiently than the private sector. It wouldn’t be painful to pay taxes in a well-managed economy where everyone prospered. The thriving America of the 1950s and 1960s had top tax rates as high as 91 percent, and those taxes helped create the prosperity that’s so sorely lacking today.

Still, many people are undoubtedly asking themselves this April 15: What have taxes ever done for me?

If You Can Read This …

Public education probably helped you learn to read. And when you anything on the Internet, you’re using technology invented with tax dollars. Taxes bring other benefits too, too numerous to mention, including the greatest one of all:

You’re alive.  You haven’t died of smallpox or any of the other diseases which are restrained by tax-funded public health programs. You haven’t been crushed inside a collapsing building, mangled by a grain solo, or met any of the other grisly deaths prevented by tax-funded safety programs.

You didn’t burn to death in a home that was never inspected for fire hazards, trapped helplessly as the flames rose and knowing there were no firefighters available to answer your call. You and your significant other weren’t shot down like Batman’s parents on the streets of an under-policed and lawless metropolis.

These benefits, along with thousands of others, are abstract and easy to forget, especially when paying your taxes is such a concrete experience.

It’s an experience that isn’t always shared by our largest corporations.

Free Riders

Citizens for Tax Justice has a list of corporations that don’t pay a penny in taxes. They make a fortune from our taxes, which provide them with an educated workforce, intellectual property protection, lucrative government contracts, physical safety, and hundreds of technologies designed and built at government expense

They get all those things, free of charge, from us.

General Electric. Boeing. Corning. Wells Fargo. They’re among the many corporations that have gone at least one or more years without paying any Federal taxes. Together they made $205 billion in pre-tax profits and paid a negative rate over a four-year period.

Americans for Tax Fairness has even created “Corporate Tax Dodger” trading cards.

One of their favorite arguments against fair taxation is that it “redistributes wealth.”

Vicious Circle

We’re certainly redistributing our wealth to the tax-dodging defense contractors behind anti-Medicare and anti-Social Security groups like “Fix the Debt.”

One of Fix the Debt’s leaders is Honeywell CEO David Cote, who also served on President Obama’s Deficit Commission. Cote’s corporation received $1.5 billion in taxpayer money in 2012 from the Defense Department alone, and paid no taxes at all in 2009-10. (It paid a 2 percent rate in 2011.)

While it was siphoning off our wealth, cluster-bomb-manufacturing Honeywell also raised total executive compensation for Cote and his top 4 executives to $54 million. That’s a 15 percent raise during the worst recession in modern history, funded by your tax dollars.

Now that’s wealth redistribution.

It’s no coincidence that Honeywell also spent more than $18 million on lobbying. That’s our money – spent to corrupt the political process which decides how to spend our money.

We’re also redistributing wealth to high-net-worth bankers who were bailed out with taxpayer dollars, then promptly went back to shafting the same taxpayers with usurious business practices. The Federal Reserve still provides them with risk-free profits without requiring them to lend very much money – which is, after all, what banks are for.

How do they get away with it? The lobbying helps. So does the money they spend on “grassroots” groups like the Tea Party.

The Fighting Side of Us

“Big Government Plus Big Spending = Slavery.”

That’s what a Tea Party sign said in 2009. We’ve since learned that some of those demonstrators were actually hired and paid to show up for the cameras, but the movement’s real enough. And yet polls show that Tea Partiers overwhelmingly support Social Security and Medicare, two key government programs now on the chopping block.

The “Fix the Debt” corporate-welfare crowd and “anti-government” Tea Party they help fund want it both ways. They love what they get from taxed revenue, but they don’t want to pay taxes. And theylecture us on the evils of government.

To use a line Merle Haggard deployed so effectively against peace demonstrators in the Vietnam days: “They love our milk and honey but they preach about some other way of livin’.”

Two Nightmares

Politics is an act of the imagination. We dream a future, then struggle to achieve it.

Any future can become a dystopia when taken to an extreme. We’ve heard a lot of scare talk about a “socialist” world in which a faceless “Them” confiscates everything we own and seizes every penny we earn. It’s a Borg-like collective without freedom, passion, or spirit, where every moment in our lives is “Theirs” to control.

It’s also nothing but a paranoid fantasy, a cartoon Communism which resembles nothing any American movement, leader, or party supports. It certains bears no resemblance to the vision of today’s Democrats, whose policies have often moved to the right of Republicans in earlier decades.

What about the other dystopia, the right-wing one? That’s a hellish Mad Max landscape where the few remaining resources are quickly seized by the most violent. It’s a world where everything you own, including your privacy and your life, can be stolen at any moment by brute force. It’s a world of disease, poverty, disfigurement, and death.

That world seems to have a lot of powerful backers. In fact, they run a huge cable television network – and an entire political party.

Corporatocracy USA

The Right has triggered the lizard-brains of a million Tea Partiers with fears of a country where every transaction is like “going to the Department of Motor Vehicles.” (It was actually quite pleasant when I last went to the DMV a few years ago, but that was pre-austerity.)

If you want to know what their world might look like, imagine a nation run by cable TV companies. That should trigger everybody’s lizard brain.

There’s a good chance you’re one of the millions of people who have been annoyed, exasperated, frustrated, and bilked by their cable provider. (I know I am.) Imagine what life would be like if you were forced to deal with – and overpay – a corporation like that whenever you had to meet one of life’s vital needs.

Hundreds of government functions would be cannibalized by corporations. We’ll pick one: Roads and highways. Imagine a patchwork system of toll roads, where every mile traveled – in your town, county, state, or nationwide – meant another payment to a different corporation. The pavement could crumble and the bridges tremble, and they wouldn’t care. You’d have to use them anyway.

You’d be poorer, life would be miserable, and a Sunday drive would mean taking your life into your hands.

Death and Taxes

Roads are a pretty good metaphor for health insurance. Unlike all other developed countries, we opted for a private-sector health system.

Our health insurance taxes – in the technical, government sense – are low. But we pay 60 percent more for health insurance than other developed countries, and get far less in return. We pay a dollar in cash to save a few cents in taxes.

And sometimes we pay with our lives. Our poor rates of mortality, infant mortality and longevity are our real “death tax.”

No Country for Young Kids

A new United Nations study shows that we’re near the bottom in the quality of our children’s education, in their health and safety, housing and environment, and their material well-being.

We’re worse than Lithuania and Latvia in education.  Worse than Estonia in child health and safety. Worse than Slovakia on child housing.

And we’re not expanding programs that help kids. We’re cutting them.

Measurement Bias

But our media and political celebrities ignore these statistics to focus on a deficit that’s already declining rapidly. It’s a kind of blindness. Even our employment reports focus only on private-sector job growth, as if teachers, police, and firefighters weren’t people who perform socially valuable work.

Our leaders insist on spending cuts which make unemployment worse and strangle our economic recovery, even though the United States spends less on government than many other developed nations. And even though much of our recent spending was caused by reckless and fraudulent activity on Wall Street, bankers aren’t being asked to help pay for the damage they’ve caused.

Taxes in the US are extraordinarily low for corporations (real corporate taxes are at a 40-year low) and the extremely wealthy (who pay a fraction of the rate they paid under Republican Presidents like Eisenhower and Nixon.) And the wealthy have captured all of the benefits of our post-2008 “recovery” – and more, as real wages for the rest of the country continued to decline. (More here.) That wealth shift is the result of deliberate policy decisions, too.

No wonder consumer confidence plunged to its lowest level in nine months last week, far below what the experts predicted. Who can be confident when our leaders are pursuing policies like these?

Weak Tea

The payroll tax “holiday” wasn’t the best way to give middle-class and lower-income Americans a much-deserved break, but at least it helped. Now that it’s gone they’re struggling even more, and a new (and better-designed) tax break for working Americans isn’t even “on the table” in budget talks.

But the Bush tax cuts are still in place for income of up to $400,000. So are the tax breaks that let some of the ultra-wealthy pay little or no taxes. The President’s proposed “Buffett rule” would help with that (although we’d expect Warren Buffett to pay more than his secretary, not just the same amount.)

And in these recession- and austerity-buffeted times, the President’s proposed “corporate tax reform” would eliminate some loopholes in a way that freezes corporate taxation at today’s historically low rates. That’s unjust. When it comes to Washington’s fixation on “deficit reduction,” it’s also extremely unwise.

And you can be sure of one thing: Once the new low rates are in place, lobbyists will start working on the next set of loopholes.

The Democracy Tax

The anti-tax trope says it’s an invasion of our liberty when “they” take “our” money.  But in a functioning democracy, “they” is us. When the system not’s working for the majority, it means that democracy itself is broken.

rj-eskowSure, sometimes our tax dollars are wasted. Two unnecessary wars and the accompanying loss of life are our most tragic examples of that. Every wasted tax dollar that enriches a corporate executive is a “democracy tax.” We pay it whenever money’s political influence overrules the people’s will. Tea Partiers should join in the fight against this “taxation without representation.”

Instead of complaining about “taxes,” we should be fighting to take our democracy back from the moneyed interests that corrupt it in order to pilfer our shared wealth.  That’s something to remember – on Tax Day, and every day.

 RJ Eskow

Published with the author’s permission from Huffington Post

Monday, 15 April 2013

Comments

  1. JoeWeinstein says

    Thanks to author and editors for this article. Too bad that the only prior reader comment utterly and airily misses the article’s main points. So I want to add my words too for taxation.

    The idea of taxation is virtuous: get everyone to pay (reasonably but involuntarily, without tolerating able free-loaders) something like a fair share to fund the public’s instruments – governments – in order that they may do at least the basic needed good for necessary or very useful public purposes.

    Inevitably, real taxation is less than ideal and gets corrupted – at some places and times just a bit, at others very badly.

    But those who try to twist current corruptions or failures into an argument against the very idea of taxation are deluded. When governments aren’t adequately funded, an inevitable casualty is any hope for reliability of the allegedly great alternative to governments: market systems.

    In an ideal market system, you pay a fair price to get a useful reliable responsibly made private-sector product. The reality there too has also been equally corrupted from the ideal. Indeed it’s even worse: without a government enabled and willing to enforce them, you can’t expect to achieve or maintain basic standards of market reliability.

  2. Reverend Draco says

    Saying that there’s an upside to taxes is like saying there’s an upside to rape. “Hey, at least you didn’t have to go hang out at a singles bar!”

    A = A. Armed theft is armed theft – whether the thief wears Crips colors or a suit-and-tie with an IRS badge makes no difference. Both are taking, by force, that which rightfully belongs to someone else.

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