Happy Tax Day, our annual celebration of American democracy. Today, more than any other day, Americans participate in the governance of their country. Last election day, only 36 percent of eligible voters went to the polls, but by April 15th, everyone but the wealthiest 10 percent has to have paid his or her taxes. A special tax-day greeting to all cheerful federal income taxpayers. I hope some day the two of you will meet in person. I have the potential to be a cheerful taxpayer – in theory I can see the value in pooling our resources to purchase large items that will benefit us all. In practice, it hasn’t worked out that way and I have little faith it ever will.
Much of the tax griping that goes on is about appropriation. We don’t like the things our tax money buys and we don’t like the inefficiency that seems to mire every tax-financed project. This year, I want to spend tax day complaining about allocation – the way we gather taxes. There is no central logic to the American tax code, not even a flawed logic. Some items, like cigarettes, are taxed because we want to curtail their use. Some items, like gasoline or alcohol, are taxed because we want to encourage moderate use, and in the case of gas, to help pay for things like highways. But most federal and state revenue is raised by corporate and personal income, sales and property taxes. The idea here is that those with higher incomes and more property should bear a greater tax burden, but that idea is negated by myriad exemptions and deductions until the rich wind up paying less than the poor. This in turn leads to even dumber ideas, like the flat tax.
For the last decade, there’s been a fair amount of intellectual movement, although very little political movement, around the idea of tax shifting. Tax shifting is based on the premise that taxes are a negative reinforcement and the more we tax something, the less we will see of it.
It should be easy to decide what we don’t like and tax it to death. This plan would be particularly beneficial for the environment. We know what the greatest threats are to the planet, but we’re paralyzed to do anything about them, because in a large part, our wasteful ways are supported by the tax code.
The greatest threat to earth is global warming, so we should immediately tax all fossil fuels, using some of that money to subsidize the proliferation of alternative energy technologies. The same goes for ozone-depleting chemicals. We have the knowledge, alternatives are sitting on the shelf, ready to be used. All we lack is the will to convert our industries. But if we do convert those industries, we will create jobs in the process and those jobs will pay wages that we will not have to tax, because we will have decided to tax things we want to eliminate, not things we want to retain. The list of what to tax trips lightly – and lengthily – off the tongue. Chlorinated chemicals, old-growth lumber, excess packaging, plastic, genetically-engineered crops, unsustainably harvested fish, et cetera, et cetera, et cetera.
So, what if this happened? What if, by some miracle, Congress decided tomorrow to stop taxing the things we want – income and commerce – and started taxing things we don’t want – pollution and waste. What happens in 10 or 15 years, when we’ve converted our society to clean technology and we’ve run out of bad things to tax? I would welcome such a problem, but I doubt we’ll ever get there, even with the most progressive tax system.
For better or worse, the way in which we as a society tax and spend is our most direct form of democracy. Our national tax day shouldn’t be known for adding insult to injury. It could be a day we look forward to.
Happy Taxes
Happy Tax Day, our annual celebration of American democracy. Today, more than any other day, Americans participate in the governance of their country. Last election day, only 36 percent of eligible voters went to the polls, but by April 15th, everyone but the wealthiest 10 percent has to have paid his or her taxes. A special tax-day greeting to all cheerful federal income taxpayers. I hope some day the two of you will meet in person. I have the potential to be a cheerful taxpayer – in theory I can see the value in pooling our resources to purchase large items that will benefit us all. In practice, it hasn’t worked out that way and I have little faith it ever will.
Much of the tax griping that goes on is about appropriation. We don’t like the things our tax money buys and we don’t like the inefficiency that seems to mire every tax-financed project. This year, I want to spend tax day complaining about allocation – the way we gather taxes. There is no central logic to the American tax code, not even a flawed logic. Some items, like cigarettes, are taxed because we want to curtail their use. Some items, like gasoline or alcohol, are taxed because we want to encourage moderate use, and in the case of gas, to help pay for things like highways. But most federal and state revenue is raised by corporate and personal income, sales and property taxes. The idea here is that those with higher incomes and more property should bear a greater tax burden, but that idea is negated by myriad exemptions and deductions until the rich wind up paying less than the poor. This in turn leads to even dumber ideas, like the flat tax.
For the last decade, there’s been a fair amount of intellectual movement, although very little political movement, around the idea of tax shifting. Tax shifting is based on the premise that taxes are a negative reinforcement and the more we tax something, the less we will see of it.
It should be easy to decide what we don’t like and tax it to death. This plan would be particularly beneficial for the environment. We know what the greatest threats are to the planet, but we’re paralyzed to do anything about them, because in a large part, our wasteful ways are supported by the tax code.
The greatest threat to earth is global warming, so we should immediately tax all fossil fuels, using some of that money to subsidize the proliferation of alternative energy technologies. The same goes for ozone-depleting chemicals. We have the knowledge, alternatives are sitting on the shelf, ready to be used. All we lack is the will to convert our industries. But if we do convert those industries, we will create jobs in the process and those jobs will pay wages that we will not have to tax, because we will have decided to tax things we want to eliminate, not things we want to retain. The list of what to tax trips lightly – and lengthily – off the tongue. Chlorinated chemicals, old-growth lumber, excess packaging, plastic, genetically-engineered crops, unsustainably harvested fish, et cetera, et cetera, et cetera.
So, what if this happened? What if, by some miracle, Congress decided tomorrow to stop taxing the things we want – income and commerce – and started taxing things we don’t want – pollution and waste. What happens in 10 or 15 years, when we’ve converted our society to clean technology and we’ve run out of bad things to tax? I would welcome such a problem, but I doubt we’ll ever get there, even with the most progressive tax system.
For better or worse, the way in which we as a society tax and spend is our most direct form of democracy. Our national tax day shouldn’t be known for adding insult to injury. It could be a day we look forward to.