Friday, September 19, 2008

Are taxes patriotic?

In a recent interview, Joe Biden suggested that for Americans who can afford it, paying taxes is a patriotic duty:
The truth of the matter is that we are in trouble. And the people who do not need a new tax cut should be willing, as patriotic Americans, to understand the way to get this economy back up on their feet is to give middle class taxpayers a break.
Is Biden right? Hell yes. It really shouldn't be that controversial, should it? If you love your country, you want it to function well. To function, your country needs money to have a military, build roads, run schools, and police your neighborhood. To get money, it needs your taxes. So do your damn duty.

I can see two reasons why Americans would consider taxes a burden rather than a patriotic duty. First, Republicans have been remarkably successful at framing taxes as "painful," unreasonable, and burdensome (e.g., Bush's "It's your money" slogan and McCain's recent ad). They have largely won the rhetorical battle on this issue.

Second, fiscal conservatives like Andrew Sullivan argue that government doesn't need that much money to fulfill its basic functions, and therefore taxes should be smaller and flatter. (Side note: current Republicans are NOT fiscal conservatives.) He argues that the government's role should be to promote economic efficiency while protecting formal (not substantive) equality. So anything beyond a small flat tax would be burdensome and unfair.

Although that argument is more reasonable, I disagree with it. I'm not an economist, but I just don't see how the numbers would add up under a small, flat tax. The U.S. already has the smallest welfare system among all advanced democracies. We have the smallest government overall, as a % of GDP, among all advanced democracies (144 out of 160 countries, according to one list). We have a roughly half-trillion dollar federal deficit amid a major financial bailout. I'm willing to be convinced otherwise, but what government functions are you going to cut to allow for a small flat tax?

I just don't see how the federal government can perform its basic functions, including having a fairly minimal social safety net, without having progressive taxation. It's not a matter of trying to achieve some utopian "substantive equality," but simply ensuring that extreme inequality doesn't prevent some people from meeting their basic needs. So yes, paying your share of taxes, especially if you're wealthy, is a patriotic duty.

(Credit: Sullivan)

9 comments:

Bryan said...

Death and taxes may very well be life's only true certainties, but I am leary about referring to them as patriotic duties, that is not to say I am against taxation, however. I am in fact a liberal, taxpaying American citizen who recognizes the government's need to seek funds from its citizenry to carry out the functions it was elected to provide, in this context provision of various welfare programs and tax cuts to facilitate economic survival for citizens struggling under current conditions.

That being said, I am also an extremely cynical human being who while considering myself a patriotic and dedicated American, try to shy away from labeling anything as pro or for that matter anti-American. There is simply too much rhetoric floating around the airwaves and chat rooms about what is and is not a patriotic or civil duty to continue throwing around labels, there is too little room left for reasoned dissent or at least discussion. Labeling tax paying as a patriotic American duty, whether it is or not, necessarily indicates that anyone who does not is un-American, that anyone who questions the nature and method and end result of their taxation is in willful defiance of that which is good and just and right for America.

I pay my taxes and will continue to do so, but personally I consider it patriotic to not blindly pay them but to in fact pay attention to where those taxes are going. Sticking a patriotic label onto payment strikes me as an irresponsible spin move that has the potential, although certainly not a guarantee, of abuse with all dissenters being written off as unpatriotic. That the government should tax in order to carry out its sworn duty and obligations to assist the American people in times of economic hardship is a given, but simply labeling that payment as patriotic does not necessarily mean the money will in fact go to carefully considered sources that will in fact benefit the economy, the country and the world.

Moreover, I believe that while government does and will always need to tax to provide services such as a basic glass floor of housing, education, food and medical care, I believe it should do so with keeping an eye towards taxing its citizens as little as possible. Taxes are manageable, and they should be kept as manageable, and minimal, as circumstances allow. Everyone, be him or her labor class or CEO wants to keep as much of their money as humanly possible. It seems to me that a great deal more than was absolutely necessary has been all but if not extorted from various peoples in various countries over the years in the name of patriotic duty. It may very well be and is of course a necessity of circumstances in order to provide needed services that should be provided no matter the economic situation and taxes should not be cut helter skelter while praying that the money to pay for government functions will become available, I believe the government should seek to tax as little as possible. The more money is in the hands of the public, the better off the economy is, its simple math.

P.S. I really miss your class and the excellent discussions we had in it professor.

Bryan Koenig

NickTroiano said...

I agree it's patriotic to financially meet your obligation in contributing to the operation of our country and its needs. It is a civic duty. I also agree you should pay your fair share.

That said, our current system that is designed to penalize those as they become more successful is anything but patriotic. As you achieve the American Dream, the American government reaches deeper into your pockets. Indeed the spirit of this country is equality and the pursuit of happiness. Explain to me how the current tax-bracket system is equal in the absence of a flat tax percentage across the board, or how the individual pursuit of happiness is still alive when our politicians are increasingly favoring income redistribution and manipulating our tax system to achieve it. The question of one' own liberty comes into question when the average American had to work until April 23 this year just to pay their local, state, and federal taxes.

Successful entrepreneurs, including many small business owners, are paying upwards of 40-50% of their income to Uncle Sam. Just think what Franklin said: It would be thought a hard government that should tax its people one tenth part. What would he say today? What would any of our Founders say today? I have a feeling we'd be in a second revolution (cue Ron Paul).

My thought: A flat tax is fair, and has worked successfully aborad. A fair tax (www.fairtax.org) is even better. But one this is sure: our current system, which soaks up hundreds of millions of dollars to even sustain itself (IRS, filing costs, lost productivity, etc.), is horrendous.

So I wouldn't jump to the conclusion that those who object to paying into such a flawed, unequal system, especially one that funds a bloated and wasteful government, is unpatriotic.

Joe Biden is right by saying we are in trouble. But we can't play class warfare and leave the burden of our problems on a small part of this country and oppress the minority. How we get out of this mess is to bring some fiscal sanity back to our government, something both parties fail miserably at. This past week was a perfect example of that.

Nick Troiano

P.S. I second the previous poster on his PS.

Andy said...

While I prefer to think of taxation perhaps more as a duty to the whole (rather than the state) making it not patriotism so much as commitment to our fellow wo/man, I otherwise wholeheartedly agree!

PS: Not gonna be a kiss-a** but all intelligent conversation is a plus, so do remember your class with much fondness. Will be following your musings, added to my feed!

Andy T.

Andy said...

Oh and I forgot to vehemently disagree with the second comment, flat taxes are bad for equality, and dont particularly share sympathy for the oppressed minority in the top 1% who control a vastly disproportionate amount of the wealth of human society and natural resources, which are surely the inheritance of all people. In my view, anyway.

But im a bit of a left-lib nutter arent I?

andy, again.

Bryan said...

As appealing and simple as a flat tax might be, it is simply not feasible, and is perhaps even less fair than the current tax system. It would mean that someone who toils to earn $20,000 a year would face identical taxation to a multimillionaire. I am not suggesting that the successful be punished, I am suggesting that they share a part of their wealth with the less fortunate. The previous posting was exactly right, a vast swath of financial and political power is amassed in an impossibly tiny class of people and I am a big advocate of a price being necessarily paid for power of any kind.

NickTroiano said...

"It would mean that someone who toils to earn $20,000 a year would face identical taxation to a multimillionaire."

The only way that would be true is if the person with $20,000 income paid say $5,000 and the person will a million dollar income paid $5,000. With a flat tax, which is inherently both fair and proportional, person A would bay $5,000 and person B would pay $250,000. That's far from identical.

The idea of usurping power and wealth from a small group of individuals for no reason but they are powerful and wealthy has no place in our country. Dare I say that sounds like Marxism to me.

Acrobat said...

Hard to make flat tax criticisms without addressing: 1) current effective tax rates of the wealthy; 2) flat tax rate under consideration; 3) types of income subject to taxation; 4) income level where taxation begins; and 5) administrative and compliance savings with simpler system. Devil’s in the details, but these issues are necessary for justice and revenue criticisms.

Assuming patriotism is not a binary proposition, am I less patriotic for planning to reduce my taxes?

Dan Chong said...

Ah, Mr. Acrobat, I knew you'd like that post.

Yes, I'll assume that patriotism isn't binary. So, for example, volunteering for the front lines in Vietnam would arguably be more patriotic than joining the Texas Air National Guard. But my main point was that there's no good reason why serving the People with your body is a duty, but serving the People with your money is a burden.

You're right, the devil's in the details, as it is with most things. I'm open to seeing a flat tax proposal, or a simplification of the tax code (not necessarily linked), that will raise $3 trillion without overburdening the poor and middle class. But I just think the details have to account for some pretty big structural issues that I mention above, and I think our initial presumption should be a willingness to do our duty rather than assuming we shouldn't have one.

Dan Chong said...

Ah, Mr. Acrobat, I knew you'd like that post.

Yes, I'll assume that patriotism isn't binary. So, for example, volunteering for the front lines in Vietnam would arguably be more patriotic than joining the Texas Air National Guard. But my main point was that there's no good reason why serving the People with your body is a duty, but serving the People with your money is a burden.

You're right, the devil's in the details, as it is with most things. I'm open to seeing a flat tax proposal, or a simplification of the tax code (not necessarily linked), that will raise $3 trillion without overburdening the poor and middle class. But I just think the details have to account for some pretty big structural issues that I mention above, and I think our initial presumption should be a willingness to do our duty rather than assuming we shouldn't have one.