Happy Tax Day!

Tea Party activists are marking the deadline for filing federal income taxes with a protest hear in Washington, D.C. Yesterday, Sarah Palin was in Boston, site of the original Boston Tea Party, giving her fair and balanced interpretation of American history and its current political circumstance.

I was not in attendance in Boston, but from the clips on television, it was unclear if Palin understood that the Boston patriots were protesting taxation without representation, not taxation per se. The Boston patriots did not say that the tax on tea was too high, they said it could only be imposed on them by their own legislature, not by the British parliament because they were not represented in that parliament. Of course, neither were most Britons represented at that time given the quirky way boroughs had been established.

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Palin, who presided over a state monopoly on oil revenues that permits Alaskans to receive a government check each year – dare we point out that it is an essentially socialistic enterprise! – may be unfamiliar with tax laws. But, I do not think anyone doubts that Congress has the power to tax, that all Americans are represented in Congress (except the residents of the District of Columbia, a cause that for some reason never comes up at the tea Party protests), and that the conflation of the symbolism of the Boston patriots with the current opposition to the Obama administration is a bit strained.

It goes without saying, that the American Revolution was also motivated by less noble concerns. Those who invoke "the Founders" the way a witch pronounces a spell tend to overlook the vile anti-Catholicism that was of great concern to the representatives at the First Continental Congress. Among the "Intolerable Acts" was the closing of the port of Boston (in response to the Tea Party), but another was the Quebec Act which granted religious and civil liberties to Roman Catholics in Canada. In an address to the people of Great Britain, America’s first Congress referred to Catholicism as a "a religion fraught with sanguinary and impious tenets," and, further on, said Catholicism "has deluged your island in blood, and dispersed impiety, bigotry, persecution, murder, and rebellion through every part of the world." They warned that Catholic emigrants in Canada would "be fit instruments in the hands of power to reduce the ancient, free, Protestant colonies to the same state of slavery with themselves." Do our contemporary patriots wish to associate themselves with those sentiments too?

Back to taxes, as much as we all grimace when we see what we owe, the fact is that our taxes are too low in this country and the tax code is a mess and needs a drastic simplification. It is a crime that the first dollar a poor person makes must pay FICA and Medicare taxes, but that the billions in dollars made by investment bankers and their clients do not contribute a penny to the solvency of these most basic foundations of the social contract. Our corporate tax rate is way too high because businesses, instead of seeking a lower rate, have filled the tax code with loop holes for their companies. The super-rich, who can afford lobbyists to get tax breaks and accountants and lawyers to harvest them, should not be able to evade taxes while the small businesspeople and hard-working professional pay the lion’s share of federal tax collections.

Palin does not have the answer to the problems of the tax code. But, it is an area where the President and Congress could reach some bi-partisan solution, especially regarding tax simplification. The last major effort to eliminate special tax privileges was undertaken by GOP icon Ronald Reagan working with former Democratic Sen. Bill Bradley. That was in 1986. I suspect that Senators Brown from Massachusetts, Graham from South Carolina, Snowe and Collins from Maine and maybe others could be persuaded to adopt a tax simplification scheme. Whatever craziness exists in the Tea Party crowd’s ideology, it is matched by the craziness of the tax code.

Michael Sean Winters

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8 years 3 months ago
"approximately 60% of workers pay more in FICA than they do in ordinary income taxes"
 
I'll take, for the sake of argument, that this is true, but why is this wrong if they, as most economists also believe, they disproportionately benefit from the 2 programs "funded" by FICA.  Its amazing to me that liberals think we can still fund sinking entitlement programs with FEWER people paying taxes and make it all up by taxing the rich fat cats (who already pay nearly 65% of all the income taxes).  I'm all for a simplified progressive income tax (along the lines of that proposed by Pres. Bush's and Paul Ryan's tax plans) BUT You also need spending cuts and entitlement reforms that most liberals (as evidenced by Bindner's blather above) view as sacred cash cows.
8 years 3 months ago
"Back to taxes, as much as we all grimace when we see what we owe, the fact is that our taxes are too low in this country and the tax code is a mess and needs a drastic simplification. It is a crime that the first dollar a poor person makes must pay FICA and Medicare taxes, but that the billions in dollars made by investment bankers and their clients do not contribute a penny to the solvency of these most basic foundations of the social contract."
 
Nothing prevents you from willingly pay much more to the IRS than simply what you "owe" them.  You, or any liberal who feels our taxes are too low can write as big a check to the federal government as your heart desires.  But before you complain about taxes, please check your facts.  As Greg Mankiw at Harvard and others have pointed out, the argument that rich people don't pay enough taxes is a total cannard.  In fact, more people in this country pay no taxes and the Obama administration's policies will only increase the number of non-taxpayers despite increasing the amount of government services these people receive.  You have been way off the mark this week with your posts.  Do some research.
8 years 3 months ago
Mr. Winters has truly lost it in this post.  In order to undermine Sarah Palin he has resorted to attacking the founding of this country.  I doubt that Ms. Palin would want to get rid of all taxation.  I want to say pathetic as a description of this analysis.  But that is too generous for such a transparent illogical diatribe. 
James Lindsay
8 years 3 months ago
I always find it astounding when people who are against higher taxes protest against a President who lowered them.

Tax simplification is a good idea, especially if it results in a shift from employee filing of wage taxes to employer filing (since the employers do the collection anyway). Indeed, an employer filed wage tax could be used to vastly increase tax breaks for families and eliminate tax breaks for McMansions, which would be in line with the option for the poor which the Church has insisted on for almost 150 years, since the time of Pope Leo XIII.

The market economy can't pay a living wage, since there is no way to justify paying a janitor enough money to support his or her children - even if the business owner or share holders desire to do so. Writing family benefits into the tax code and distributing them with salary is the only way to do what the Church demands of us in this regard. Tax reform could, and should, be used to make that happen - but it won't unless we speak out for it.
WILLIAM HAUK
8 years 3 months ago
In fact, more people in this country pay no taxes and the Obama administration's policies will only increase the number of non-taxpayers despite increasing the amount of government services these people receive.
Very few people in this country pay no taxes.  As Mr. Winters points out in the part of the post that you quote, every worker pays FICA taxes on the first dollar of income that he or she earns in wage or salary income.  Indeed, if you add the employer contribution to FICA (which most economists believe is in practice borne by workers in the form of lower salaries than they would otherwise have without employer contributions to FICA), approximately 60% of workers pay more in FICA than they do in ordinary income taxes.  I've never quite understood why this is somehow held to not count in statistics about how many workers allegedly don't pay federal taxes.
Liam Richardson
8 years 3 months ago
Beware lazy thinking about tax simplification: the real devil that creates lots of details is defining what income is. Believe it or not, it's not self-evident. Moreover, the fact that people get creative to avoid having income included in the definition means there is a perpetual bias in favor of complexity that you cannot avoid if you wish to maintain something of a free market economy.
James Lindsay
8 years 3 months ago
Mr. Landry, considering the wealthy who pay so much in tax also own 90% of the wealth, a bit of progressive income taxation is appropriate. While the wealth itself cannot be confiscated without compensation, the income must be taxed.
8 years 3 months ago
"Mr. Landry, considering the wealthy who pay so much in tax also own 90% of the wealth, a bit of progressive income taxation is appropriate. While the wealth itself cannot be confiscated without compensation, the income must be taxed."
 
They own it because they created it, Mr. Bindner.  It was you who referenced Leo in an earlier post, so I suggest you read what he had to say about socialism & the value of work.
 
"Quite justly, the low income earner got treated very well in these cuts, with not only the lowest level tax rate being reduced, but also with the level at which taxes begin being raised 50%. Partly because of this, 47% of the nation's citizens pay no income taxes at all. Now if you were voting in your own interest, as most of us tend to do, and a proposal came up to spend money on almost anything, even if 90% went to lobbyists and bureaucrats, etc, you might be inclined to vote for the remaining 10%, as it would "cost" you nothing. How does that bode for voting against spending money on anything, or controlling deficit spending?"
 
Precisely the point I attempted to raise earlier.  We keep talking like the rich are an endless piggy bank who have unjustly appropriated something that does not belong to them.  Capitalism is still the best system this side of Eden for allocating resources.  And no one has yet to mention that unsustainable level of government spending.  It is, and if not ought to be, the first principle of Catholic social teaching that the poor are better off with a functioning economy rather than one taxed or so subsidized to death.
 
 
Jim McCrea
8 years 3 months ago
It’s interesting that people who have a mortgage don’t object to the fact that others pay taxes so the mortgage holders can deduct the interest.
 
It’s interesting that people who make contributions to churches don’t object to the fact that others pay taxes so the church members can use the contribution to offset income.
 
It’s interesting that people who send their children to public schools don’t object to the fact that people without children pay taxes so these parents can take advantage of public schools.
 
It’s interesting that people who drive on public highways don’t object to the fact that people without cars pay taxes so these parents can take advantage of the highways.
 
We all have our favorite tax “gripes”, but does the term “common good” ever enter into the thoughts of the “woe is me; I’m so overtaxed” folks, most of whom are generally what is called “sitting pretty?”
8 years 3 months ago
"We all have our favorite tax “gripes”, but does the term “common good” ever enter into the thoughts of the “woe is me; I’m so overtaxed” folks, most of whom are generally what is called “sitting pretty?”
 
Again, nothing keeps you from writing as large a check to the IRS as your (liberal) heart desires.  As someone far from "sitting pretty" as a young (recently married) professional, I welcome a simpler, fairier tax systems where I'm not supporting cadillac health plans for union members whose leaders make upwards of what many CEOs damn near earn, and are constantly getting special deals from the Obama administration.  What the current tax and spend and spend and spend and spend system is hardly the 'common good'.
KEVIN MULCAHY
8 years 3 months ago
I'd be curious to see evidence that the wealthiest Americans are suffering from over taxation.  Even if one dislikes the NY Times for its politics, look at it at some point in a library-not for the news or editorials, but for the advertisments and feature sections aimed at the rich.  Jeff as a young professional might well be over taxed, but the rich have money enough left over for astonishing extravagances.
 
Perhaps that is too anecdotal, so let me offer a historical argument.  During the 50s and 60s, when tax rates on the wealthiest were far higher than anyone would dream of proposing today, the United States enjoyed significant prosperity and a rapidly expanding middle class.  Some economists call it the great contraction-in the very narrow sense that the discrepancy between the incomes of the wealthy and the poorest, though still significant, was at historically low levels.  Higher taxation on the wealthiest need not damage the economy: there is significant evidence that a prosperous America can quite well coexist with higher rates.
And if taxes are spent on the common good-on things that few or no individuals can afford themselves-roads, bridges, colleges, schools, libraries, the national defense, etc.-spending is not necessarily bad.  Of course there needs to be balance and shared sacrifice.  But it's hard to argue that the very wealthiest are making any sacrifice now.  Remember Warren Buffet's comment that his secretary pays a higher tax rate than he.
Stanley Kopacz
8 years 3 months ago
Mr. Landry, loyal worshipper of the rich, talks of them as creating wealth.  As in Wall Street?  The artificial bubbles created the wealth.  The government, which is supposed to be us, creates wealth by printing it or changing the bits in a computer and lends it out to the banks at near zero interest.  This forces people who have saved money to lend it to the banks at near zero interest, effectively taxing those who have saved all their lives.  This is a tax that doesn't go fot the common benefit but to private hands.
Also, the government creates wealth by subsidizing risky technological development, or have you never heard of DARPA?  The government also gives out all kinds of corporate benefits, with our Republicrat president, for instance,  announcing loan guarantees for new nuclear plants, two new terrorist targets, thank you very much.  IF government isn't involved in making the rich rich, why do they have so many lobbyists leaving slimy trails in the halls of congress?
I give money to charity.  At least it's supposed to go toward helping people, not support ineffective, wasteful Republican wars.  It's a shame our present Republicrat president feels the necessity to continue the waste, expense and horror.  The idea is to change government policy to help everybody, not favor the machiniations of the powerful.  Perhaps you like the war programs, Mr. Landry.  Then you should donate extra money to the government because it will benefit the pursuit of war and buildup of defense.  And a lot of it will end up in the pockets of the rich, adding to what they're already stealing from you.
 
 
8 years 3 months ago
"astonishing extravagances" - I'm not against a consumption tax; but to argue that wealthy Americans do not pay enough in income taxes is factually incorrect.  If you'd like some facts about taxes from a Harvard economist, i recommend this as a starting point: http://www.economics.harvard.edu/faculty/mankiw/files/Spreading%20the%20Wealth%20Around.pdfWarren Buffet probably pays less in INCOME tax because most of his wealth comes from Capital Gains, which are taxed at a lower rate than income.  I suppose you'd argue, however, that we should tax investing (which most people view as a good thing) enough to build free libraries for people who don't use them (ever heard of Amazon?).
 
I don't feel the need to respond to Mr. Kopacz's leftist lunacies.
KEVIN MULCAHY
8 years 3 months ago
According to all of the studies I have seen, the past 30 years or so have seen a very large transfer of wealth to the very wealthiest, and a very great increase in economic equality.  I would never argue that everyone should get exactly the same pay, since there are clear differences in talent, productivity, and the value of the work we do.  But the differences in income now are staggering, and almost certainly not healthy for a society.  And Michael is right that our market economy not providing a living wage to many who do the hardest and most necessary work for our society (e.g farm workers and the folks who tend people in nursing homes).
 
Perhaps followers of Ayn Rand or other libertarian thinkers can defend such disparities, but I'm not sure Christians can and be consistent with the teaching of the Gospels.  Jesus most emphatically does not tell us we are entitled to the wealth we've earned; He tells us if we have two coats to give away one.  Certainly that demands private charity, but it might also suggest that paying more taxes to insure health and education and decent shelter for all is not the terrible evil some profess.  We should be smart (and virtuous) enough to figure some way to harness the wealth creating possibilities of capitalism and at the same time insure a far more equitable distribution of that wealth than our system currently provides.

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