Thursday, April 16, 2009

TAX TALK AND TALK AND MORE TALK

I actually like to pay my taxes—do not urge me to pay yours, though—and, when I used an accountant, my instructions were, “when its gray, be sure to pay.” But I do not want to pay for waste, fraud, and abuse—one reason why I repeatedly criticize both private-sector health care and public-sector education costs. Too much for too little.

But the litany which I have heard throughout my lifetime—taxes are too high—never resonates with me for a lot of reasons. First, no one who utters this inane litany ever defines the yardstick. After the war, the upper tax bracket was 91 percent—too high. It has been coming down ever since. It is now 35 percent—still too high. When will it not be “too high”? I suppose that someone’s answer will be a “fair tax,” namely, a regressive (low) flat tax rate proposal, which would transfer the greatest proportionate of the tax burden to the middle class. Perhaps someone can tall me why people in the middle class hard pressed by the economy like the idea of the rich getting ever richer. Do they think that they are going to win the lottery to put them in the upper crust?

Politicians pander that the taxes sent to Washington should be money kept in our purses and wallets. What a joke: our money is not in our purses or wallets; it is overspent in credit cards. In aggregate personal spending, We the People are over $2 trillion dollars in debt. We feel pinched because of our own versions of waste, fraud, and abuse; and our inability to manage our budgets to match income with expenses. We blame Uncle Sam instead of ourselves.

And second, I no one who utters this inane litany ever specifies which cuts in expenses would results from a rest of a cut in tax revenues. No one says, “let’s cut Medicare, Medicaid, Social Security, national defense, or disaster relief.” No one says,” let’s cut VA hospitals, assistance to small businesses, agricultural subsidies, construction of dams and levees, funds for roads and highways and bridges and airports, research grants to colleges and universities, or anything else. Some people just get cute about some highly specialized, lightly funded research project on a species of butterfly and think that they have proposed a solution to the budget problem. Either get serious or give it up to private grumbling over beers with friends.

A relevant story from the mid-80s. When, as chair of a country-level PTA committee, I discovered that a management problem was causing enormous waste in the computer program: one staff committee purchased 48K software applications, and another purchased 16 K computer; of course, no one could use either, so everything sat unused and unusable in storage rooms. With my committee’s support, I persuaded the Executive Committee, then the county PTA, to seek a drastic cut in computer funding until the school administration could proceed sensibly. (BTW, no PTA had ever asked for budget cuts.) In response to pre-budget pressures, staff reduced its request 50 percent; in response to my speech stating the PTA’s position, the School Board cut the computer budget another 50 percent and directed the Superintendent to form a joint staff/public committee to review and redesign the entire computer acquisition and training program and to develop a more modest budget. Results: savings estimated at over $15 million (almost $30 million today) over the original plans three-year life, and an effective, efficient planning and budgeting process of the computer program. The point: specify and explain.

1 comment:

  1. I too get mad when people's kneejerk reaction to the word 'tax' is to hunker down. As a recent NYT article made clear, a big reason nothing much gets done re global warming is the reaction to the word "tax" in the phrase "carbon tax." Yet a carbon tax is the sensible way to make sure emissions get cut.

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