Political Culture: Reasons to Be Hopeful (Or Not) on Tax Day

Jon Cummings April 15, 2010 20

Happy Tax Day! A special shout-out to those of you who are operating under the delusion that your taxes have gone up this year – a belief shared by a slim majority of Americans, according to recent polls. (I’m assuming this column isn’t read by a Forbes-like audience of the super-rich, for whom taxes actually did go up this year … though not to a level anywhere near that imposed by previous presidents like, say, Ronald Reagan.) One needn’t harness the overwhelming brainpower in effect at a tea party rally to figure out why Americans are so disconnected from the reality of tax policy; enough “objective” media repetition of the lies and rabble-rousing propagated by the Teafoxlican crowd can’t help but open a chasm between perception and fact.

Of course, tax chicanery is only part of the right wing’s mindless, universal contrarianism. That package of financial-industry regulations working its way through the Senate – the one that specifically empowers the government to break up large institutions that are out of control and failing? A guarantee of “constant bailouts,” according to the ever-more-laughable Mitch McConnell. That new deal with Russia to cut each nation’s nuclear stockpile by about 30 percent – a decrease far smaller than the 50-percent reduction achieved by Reagan and George H.W. Bush in the START negotiations two decades ago? Certain to weaken our credibility as an international power, say the neocons and the Fox harpies – and, of course, they’re right, because now we’ll only be able to flatten the entire planet seven times over instead of 10. Heck, Barack Obama can’t even lean over to lessen his height advantage over some shrimpy Asian leader without being accused of selling out our national security.

Yet even as conservatives continue to insist the sky is falling – in fact, they seem more and more to be demanding that it fall, just so they’ll be right about something – we’ve seen signs lately that significant portions of the economy are Turning The Corner, and we’ve begun hearing from a variety of voices that it’s time for Americans to stop being so goddamned cranky all the time. Retail sales are way up; so is the Dow. And business inventories are creeping back upward, too – so much so that economists expect a boost in hiring as companies face increased needs to manufacture, transport and stock goods. Economic growth is anticipated to remain at 4.5 percent or higher for the first quarter of 2010. Of course, huge problems remain – a new wave of foreclosures apparently is on the horizon, and no one who remains un- or under-employed should be expected to take too positive an outlook – but there is some reason to hope that the economy will continue to recover.

Meanwhile, the new issue of Oprah Winfrey’s O magazine is encouraging its readership to ignore, for just a minute, “the panoply of things we have to complain about” and indulge in its list of “100 Things That Are (Actually) Getting Better” — from “dads” to “robots” to “Betty White” to “wind power” to “our reputation around the world” to “Hillary Clinton.” And in last Sunday’s Parade newspaper insert, counselor-to-too-many-presidents David Gergen bemoaned the nation’s generally “gloomy” demeanor and suggested it is time to, as his meticulously nonpartisan piece was titled, “Cheer Up, America!”

Gergen’s cheerleading mostly entailed comparing today’s enlightened society with the ills of yesteryear, from impoverished seniors (a thing of the past, thanks to Social Security and Medicare – institutions of which even vast majorities of Teafoxlicans approve, according to recent polls) to the onetime repression of women and minorities (women now outnumber men at the top medical and law schools, he reminds us, and hey – we’ve got a black president! Isn’t that neat?). However, he also reels off a series of statistics concerning America’s continued intellectual and competitive might. Recent Nobel Prizes in science and economics: USA 30, China 1! Percentages of new patents awarded lately: USA 49, China 1! World Economic Forum rankings of the world’s “most competitive” nations over the last three years: USA #1! (or #2, behind Switzerland, but so what?) USA! USA! USA! “Enough of the gloom and doom,” he concludes. “We are still strong, resilient people when we pull together.”

Wow, that’s a nice sentiment, Dave – but what are the chances of Americans “pulling together” anytime soon? Can you imagine the Teafoxlicans pulling together with the majorities in Congress, or with the White House, on anything these days? The last time we were naturally inclined to pull together, after 9/11, our then-president used the occasion to advance partisan goals (union-busting, dissent-crushing, tax-cutting, Iraq-invading, etc.) rather than universal ones – with the result that Americans now couldn’t recognize statesmanship if it smacked us in the face (or gathered a bunch of international leaders to rid the world of loose nukes). Considering that supermajorities of 80 percent or higher consistently said the nation was off track under the last administration, yet nearly-as-large majorities of 65-70 percent say the same thing now, when exactly is this “pulling together” going to come about, and how?

Of course, both Oprah and Gergen’s assessments of the “good” are debatable in a political culture in which everything is now debatable. Oprah herself, of course, is hopelessly politicized after going ga-ga over Obama during Campaign ’08 – and you won’t find many Teafoxlicans supporting her magazine’s notion that America’s image in the world is improved, or that Iowa’s a better place now that gay marriage is legal there. (Even O’s apparently nonpartisan suggestion that “Your chances of visiting the moon” have improved – thanks to Richard Branson’s loony Virgin Galactic initiative – rings hollow when one considers the viciousness of right-wing ridicule that accompanied Obama’s decision to scuttle W.’s back-to-the-moon NASA program … proving that slashing needless government spending is only a good idea when the Teafoxlicans suggest it.)

Meanwhile, Gergen’s happy pill of a column leans entirely too much on unreliable juries (those Nobel committees? A bunch of freakin’ liberals!) and … horrors … international organizations (the World Economic Forum? Sounds like the New World Order to me! Sovereignty Now!). When all sources of information, save Fox News, have been discredited among a small, stupid but disproportionately influential segment of the population, no good news goes unpunished.

Beyond that, Gergen’s statistics should raise questions even among those of us who don’t worship at the altar of Sarah Palin. If America is a society that promotes such high levels of entrepreneurship and invention, why does it no longer create manufacturing jobs? If we have so many high achievers in science and medicine, compared to the rest of the world, why are our educational rankings among civilized nations generally so low? If we’re so universally self-satisfied about the advances attained for seniors, women and minorities over the last century – most of them tied inextricably to government action and, yes, spending – why did conservatives try so mightily to rend the nation in two over the possibility of making further advances in health-care provision?

You’ll never guess, but the answer to each of those questions circles back to … taxes. Simply put, we don’t like to pay ’em, and conservatives think we shouldn’t have to. For three decades, conservative politicians have insisted that we don’t have to, even as they pursued arms races (in the ’80s) and pointless scandals (in the ’90s), not to mention budget-busting pre-emptive wars and prescription drug programs … and de-regulation efforts that led to massive bailouts and an economy so far in the tank that it required enormous government stimulus spending.

Today, as far as you and I are concerned, the bill for all that (and more) is due. Pay Up, America! And Happy Tax Day!

  • joan

    Is it happy tax day or the 47% of families who pay no federal income tax?

    http://www.msnbc.msn.com/id/36226444

  • pj

    It was happy tax day for me. I gladly filed my forms, including voluntary donations to state wildlife and conservation funds, at the post office (our tax dollars at work), biking there on roads (our tax dollars at work), knowing that police and emergency rescue workers (our tax dollars at work) would be there if somebody ran a red light (our tax dollars at work) and hit me. Oh! I almost forgot: On the way, I stopped at the public library (our tax dollars at work) to make copies of my forms.

    And, by the way, I know some folks who make too little to have to pay income taxes, although of course they do pay FICA, sales tax, and various other taxes. They work hard at their jobs, but still find themselves having to make choices like: pay the gas bill or buy groceries? I'm quite certain than none of the commentators who imply that such families ought to pay taxes on an income that doesn't cover basic necessities would willingly change places.

    And then there are the seniors and people with disabilities among the families that don't pay income taxes… because they have no income. It's hard to imagine what taxes people imagine they ought to be paying in addition to the sales taxes they already pay when they buy groceries and other necessities with their meager social security stipends.

    And then there are laid-off workers who pay no income taxes… because they have no income. They all still pay sales taxes on whatever they manage to scrape up the money to buy. If folks want them to pay income tax, it might be a good idea to first ensure that they have an income!

  • joan

    That's great PJ. But those people are not 47% of the population, The bottom line is that many many folks are freeloading off others – getting something for nothing, including families making up to $50k salary per year.

    As the article says “It is a system in which the top 10 percent of earners — households making an average of $366,400 in 2006 — paid about 73 percent of the income taxes collected by the federal government.
    The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment. “We have 50 percent of people who are getting something for nothing,” said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.

    Yes, Heritage is conservative, but these numbers are true and even MSNBC and NPR ran this story and confirmed, Bottom line, there's a lot of hate for wealthier people in this country, but they fund the bulk of your library and police etc etc. I'm for a progressive tax system, but this is basically wealth redistribution and it's a bit much. Bush's tax cuts – which were to ALL – helped give a lot more of these credits to not-so-poor people. Last year it was 49% who paid no federal taxes, it actually went down under Obama.

    So next time your at a red light and a wealthy looking guy in a Jaguar is next to you – thank him.

  • JonCummings

    This is such a complete non-issue — a bit of information (and one that's been true for many years) that ought to go in the “Isn't that interesting?” category rather than the “Grab the pitchforks!” maelstrom. But, predictably, it's been pitched by cynical anti-tax extremists and flogged relentlessly by a category of media outlets (one in particular) that make their living manipulating folks whose worldviews are built on petty resentments. (It's a nice little twist on those blame-grandma-and-the-working-poor resentments, by the way, to posit that “there's a lot of hate for wealthier people in this country.” Really? Hate?)

    The tax code is full of goodies for various demographics, many of which are debatable in the grand scheme of things. (Why are homeowners favored over renters? Why are parents given advantages over the childless?) But these goodies are hardly a new development under our complicated system of (sorta) progressive taxation — and despite the rabble-rousing generalizations being flung about in relation to this story, it is a minuscule number of folks who are “freeloading,” or somehow gaming the system to pay less in taxes than their financial status would suggest. And the money lost to the Treasury this way hardly compares to the potential revenues that corporations instead transfer (or hide) offshore. Exxon-Mobil (2009 US tax liability: $0) alone probably ought to be paying more in taxes by itself than every one of your scapegoated 48 percent combined.

    As for that guy in the Jaguar, before I consider him some sort of hero to be thanked for funding the local library, he'll have to show that he's some sort of job-creating, tax-shelter-abhoring entrepreneur type. Not that the guy's to be derided, or “hated” as you imagine — but a whole lot of the people who fit into that top-10-percent category are working stiffs who just happen to have succeeded in highly paid fields like finance, law and medicine. I certainly don't begrudge him his Jag, but I do expect him to pay his fair share into our progressive system — and I'll “thank” him as soon as he thanks (by way of demanding a living wage for) his daughter's preschool teacher who works full-time at $8 an hour, a salary that most likely leaves her with no income-tax liability.

  • http://www.popdose.com Ted

    Sorry Joan, but police and libraries are not funded solely by the federal government. Rather, they are funded by a variety of sources that's much more complicated than your premises suggest. Local public libraries, for example, get the lion's share of their budgets from state, county, and local governments. The federal government does kick in a good amount, too. And the rest comes from foundations created to aid a particular library (i.e., “Friends of the Walnut Creek Library”).

    Also, if we're using this MSNBC article as a guide to who pays what and at how much, there are a number of things we pay for that lumped under the rubric of “taxes:”

    The vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes that fund Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local taxes on sales, income and property.

    That helps explain the country's aversion to taxes, said Clint Stretch, a tax policy expert Deloitte Tax. He said many people simply look at the difference between their gross pay and their take-home pay and blame the government for the disparity.

    “It's not uncommon for people to think that their Social Security taxes, their 401(k) contributions, their share of employer health premiums, all of that stuff in their mind gets lumped into income taxes,” Stretch said.

  • JonCummings

    BTW, “Clint Stretch.” Not a bad porn name.

  • http://www.popdose.com Ted

    So is Dick Army!

  • http://thevitaminkid.blogspot.com autodidact

    I can't correct all the errors here, unfortunately. But I can at least get a start on it.

    Retail sales are “way up?” Actually, they are better than last year, but still not as good as 2006. I say stagnation at best or a second dip in the recession is likely in the cards. Enjoy these “good times” of 17% U-6 unemployment while they last.

    http://www.economagic.com/em-cgi/charter.exe/ce…

    Economy is growing at 4.5%? Of course, this is the number we're told, and numerically I'm sure it can be justified. But wages grew 2.2% while prices grew 2.4%. Even if taxes didn't go up (state and local taxes have gone up in many localities), on average the tax bite feels as bad or worse. See the wage/inflation data here:

    http://www.bls.gov/news.release/wkyeng.nr0.htm

    Also, when considering 4.5% GDP growth, put this in the context of deficit spending that is about 11% of GDP. This is, quite literally, a “borrowed” recovery — fueled on borrowed money. And we will pay for it, sooner or later. The growth we have today will be matched by more sluggish growth in the future. There is no dispute about this, even from the elite economists who never saw that last bubble-pop coming. Today the bond vigilantes are going to make Greece honest. Tomorrow Portugal. Sooner or later they will get around to the USA, which is running Greece-like levels of deficit spending.

    Conservatives don't want the sky to fall. I think you have us confused with anarchists. What conservatives and Tea Partiers see is that by transferring massive amounts of private debt onto the public balance sheet (bailouts for billionaires) and massive increases in deficits, we are postponing a day of reckoning which will be worse when it finally comes than if we faced it now. If you accept the premises, that's a reasonable position to take. Not accepting the premises would be magical thinking, in my opinion. But we'll have to wait and see who is correct. The happy talk just doesn't work when you can't find a job for over a year, like my friend, or when you're already paying over 10% of your income in property tax (like me) and the city is proposing to hike it further.

    As I've written before, a lot of problems are baked in the cake. When they hatch out is hard to tell, exactly. I think between now and the end of the year it will become apparent, due to increasing pressure on banks from defaults on residential and commercial real estate, corporate debt defaults, reductions in state and local spending, and the end of federal stimulus. On the other hand, if the government does succeed in reflating the economic bubble, the next pop could absolutely do us in completely.

  • joan

    We're not talking about “freeloading” or “garnering the system”. The article is saying that 47% do not OWE any federal income taxes. Period. They don't have to pay. They're not cheating, they don't owe. Now, I understand the elderly and sick etc etc. But a family of 4 with a $50,000 income should be paying some federal income taxes. They are not poor. Granted, Bush gave them many of these write-offs, as he cut taxes for even the poorest Americans (even though liberals refuse to acknowledge this).

    You should still thank that wealthy guy. The fact is the wealthy pay for most of what the federal government provides. It's a few paying most. Again, I have no problem with a system where wealthier folks pay a little more, but it's been way out of hand for a while now.

    Simple question – do you think it's appropriate that the top 10 percent of earners pay 73% of federal taxes? Do you think a group so small should be asked to contribute THAT much? While some who aren't exactly poor (making 50K) should be allowed a free ticket (I'm talking income taxes, Yes, I realize they pay other taxes)

    They should still be thanked – take away the top 10% of earners and the Federal Gov would be in big big trouble.

  • joan

    Ted, sure you are correct, many of those things are paid by local taxes. Most local taxes are progressive as well, so it's likely still a system of the few top earners providing money to the local government that everyone benefits from. I can't find numbers for my local government, but I realize based on my local tax charts that the wealthy should be thanked as they clearly pay for most of what I have here, although it sounds like my bike trails aren't as nice as yours.

    And yes, even a very poor person who buys a pack of gum at 7-11 pays sales tax. Agreed. But that's not the issue I'm talking about, nor was it of the blog post. The issue is federal income taxes, and the truth is that the wealthiest few pay the way for the rest of us and we should thank them. Look a the president – he and his wife made over 5 million last year and they paid 1.8million in income taxes. People like Obama who make 5 million or 1 million or even 300,000 per year are the ones actually paying most of our federal income taxes. The numbers are clear. I think we need to dial back some of the Bush tax cuts that went to middle class earners so that they are responsible for contributing something in fed income taxes.

  • joan

    Bottom line, even if you don't want to thank that fictional wealthy guy in a jaguar, at least thank the top 10 percent of earners, as they are paying into the system the most, and we are all benefiting.

  • brettalan

    >>Simple question – do you think it's appropriate that the top 10 percent of earners pay 73% of federal taxes? Do you think a group so small should be asked to contribute THAT much?<<

    Well, first of all, it's not true. They pay 73%, by your own words, of federal *income* taxes. I see no reason not to consider FICA and other federal taxes in the mix, not to mention non-Federal taxes such as sales tax, which tends to fall much more on the less wealthy than income tax does.

    Having said that, we must also consider: how much benefit do the wealthy receive from their taxes? They benefit the most from the economic programs the government institutes. They benefit the most from things like the interstate highway system or the communications system. (Wherever their money came from, it almost certainly involved advertising on the airwaves and transporting goods and/or customers over the roads.) And you mention that the rich fund the police; of course they do, because they couldn't BE wealthy without the protection of police!

    I don't begrudge anyone wealth, I really don't. But the fact is that this country–thanks in large part to the anti-tax Republican presidents that the Heritage Foundation supported–has an inconceivably high debt, an economy that still needs help, and a crumbling infrastructure. And as this was happening, the rich were getting major tax breaks and were seeing their incomes skyrocket in relation to the rest of us. Who do YOU think should pay more in taxes?

  • joan

    As I said I'm for a progressive income tax system, but I think it's gone too far when a family of 4 can get enough deductions to pay no federal income tax. Plain and simple.

    Yes, all folks pay taxes, especially of course when they spend money. However, the rich pay FAR larger total amounts in sales taxes because they spend more money and buy more goods. Although, it's obvious that the poor spend a higher percentage of their income in sales tax as they have to spend most or all of their money to buy the things they need. Except don't forget they get lots of freebies from the rich (er).

    It isn't the fact that the Republicans were/are anti-tax, the debt is because they spent like drunken sailors. And our new prez keeps spending like and even-more-drunken sailor. He's taken it to new heights. They're all to blame, and there will come a day when we all pay, dearly.

    Thirdly, EVERYONE got a tax cut under Bush – fact.

    As for your last question, I think basically everyone should pay the same percentage – a percentage is a percentage. Except the very wealthy – say those who make over $500k – should pay a higher percentage (maybe 5% higher), and lower earners should pay less progressively until you get down to the very low earners who should be exempt. And all the rest of the complicated B.S. that makes it so complex to do taxes (farm write-offs, this deduction, that deduction etc) should go away.

  • brettalan

    So what would you have Obama do? Not pass a stimulus, and let the economy go south? Pull the troops out of Iraq and Afghanistan with no warning? Cut off unemployment benefits when jobs are so hard to find? It's easy to say that he's spending too much money, but under the circumstances I don't see what other option he had. And before you bring up health care, remember that health care will actually improve the deficit.

    And, really, what difference does it make whether the family of four is paying no income tax but is paying other federal taxes? I mean, would it be any different if they were paying the same amount, but less of it was payroll taxes and some was income taxes? If you count payroll taxes, only 13 percent paid none–almost all of them low income elderly people.

  • joan

    You're under the delusion that the 'stimulus' helps. Wake up. Really, wake up.

    Second, it's nice how you now say “should he pull troops out with no warning? What other option does he have”. Where were liberals in October 2001 after 9/11? Bush had no other option but to go into Afghanistan in '01, then later on he was lambasted for the debt. Well, Afghanistan wasn't the only reason for the debt, but you're revising history if you don't understand that 9/11 was a huge reason the economy has had problems and it forced us to spend billions on a war that was not our choice (Afghanistan, not Iraq of course which was a stupid decision)

    Blah, blah, blah. Way off topic. The point of my comments is to point out that the rich pay WAY MORE than their fair share in this country. Plain and simple. So lets all stop the class warfare and thank them.

  • brettalan

    The stimulus certainly helps. The economy, while still bad in a lot of ways, has improved in several areas.

    Yes, Bush had to go into Afghanistan, but there are a lot of other things he could have done so that the debt didn't get this bad.

    I still think the rich pay less than their fair share. Being rich in America, all in all, is a pretty sweet deal. But I'll certainly agree that we don't need any sort of class warfare.

  • jiminychristmas

    Do you ever get parched, drinking from the same empty glass all the time?

  • http://popshifter.com Less Lee Moore

    I think someone should interview this “family of four who makes $50K and owes no federal income tax” so we can all shake our fists at these disgustingly wealthy freeloading assholes with at least two kids under 17. What kind of lazy under-17-year-old doesn't have a job? Honestly!

  • http://www.popdose.com Ted

    According to last Sunday's SF Chron, the chance of a double dip recession is not likely. Plus, many of the economic indicators are moving in the positive direction, except for unemployment: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/…

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