The furor over the non-payment of taxes by Tom Daschle and a few other recent nominees for public office should not obscure the deeper truth that the United States has become a nation of tax-evaders.
On the simplest level, this tax evasion is exemplified by the fact that vast numbers of people, including some who are quite wealthy, under-report their incomes to avoid paying their lawful share of the nation's taxes. And still others, especially millionaires and billionaires, avoid taxes quite legally through a range of obscure loopholes and other tax dodges, including deposits in offshore tax havens. Numerous giant U.S. corporations pay no taxes at all.
Even more striking, cutting taxes is wildly popular among Americans and, as a consequence, in recent decades tax-cutting is all the rage among politicians—whether in good times or in bad, in war or in peace. Taxes, it is assumed, are evil, and like evil should be driven out of American life.
But, in fact, taxes are not evil. They are a central means whereby citizens contribute to the welfare of their country. Taxes pay for public schools, hospitals, parks, libraries, roads, public safety, sanitation, mass transit, food stamps, public housing, regulation of food and drugs, environmental protection, and numerous other crucial facets of American life. What kind of civilized society can dispense with these things?
Of course, as tax evasion has gathered momentum, political leaders often seem quite willing to shut down public institutions in the interest of tax-cutting. The recent debate over President Obama's economic stimulus package is revealing in this regard. Although the package contained hundreds of billions of dollars in tax cuts, that was not enough to offset its great crime: government spending on schools and other public services. As a result, only three Republicans in the entire Congress voted for the package—and even then only after it was stripped of substantial funding for education and aid to the states for the public services they provide.
According to Congressional Republicans, they are in favor of schools, hospitals, libraries, and other public institutions. They just don't think Americans should pay for them. And, to be fair to these GOP solons, many Americans agree that, although they like their public institutions, they want to avoid picking up the tab.
How can one account for this failure to reconcile ends and means? Sadly, it looks very much as if large numbers of Americans are simply tax-evaders, eager to avail themselves of the benefits provided by their country but unwilling to pay their fair share. In short, they are selfish.
Of course, Americans have plenty to be angry about in connection with taxes. Thanks to tax cuts for the rich championed by Presidents and delivered by Congress, the progressive nature of the income tax structure has been sharply undermined, with the poor and the middle class shouldering an ever-greater share of the burden. On the state level, too, the weight of taxation has shifted significantly away from those with the greatest ability to pay. In New York State, for example, the income tax rate for the wealthiest residents has fallen in recent decades from 15.38 percent to 6.85 percent. When property and sales taxes are factored in, poor and middle class New Yorkers actually pay a higher percentage of their incomes in taxes than do the rich.
In addition, taxpayers might well object to the way a large portion of their money has been spent. How much benefit did Americans receive from the estimated trillion dollars that the Iraq War has cost them? How much benefit do Americans receive from annual U.S. military spending—by far the costliest item in the federal discretionary budget, equal to the military expenditures of all other nations combined?
Nevertheless, anger at the regressive nature of the tax structure and at the questionable priorities of the federal budget should not drive Americans toward tax evasion. Rather, it should spur them on toward restoring progressivity in taxation and toward the funding of programs that meet their public needs.
Ultimately, tax evasion, like selfishness, is a dead end. As U. S. Representative Barney Frank declared during the debate on the federal stimulus package, a tax cut never built a school, funded a playground, or put a cop on the beat. Only we can do that—through taxes.
Lawrence S. Wittner
Dr. Wittner is Professor of History at the State University of New York/Albany. His latest book, co-edited with Glen H. Stassen, is Peace Action: Past, Present, and Future (Paradigm Publishers).