From a very young age, I was taught to hate taxes by playing Monopoly. Whenever there was a tax in the game, it was used as a penalty. Money was taken from me and I didn't know why except that the word "tax" was always involved. I jest, but there is a history of hating taxes in America, especially taxation without representation. Oh, Boston Tea Party, how I fondly remember your terrorist violence.
Do You Know What Your Taxes Pay for at the Local, State and Federal Level?
As a nation we hate taxes. The problem is, taxes pay for our government, military, roads, public schools, public parks, fat politicians, etc... When people are disengaged from the political process, or taking in false information, they are disconnected from the reality that their taxes pay for things they use or can use, everyday. This is what I like to call, the Monopoly view of taxation - we see the word tax and only know it as a word with the power to take away our money with no explanation.
It's politically unpopular to say you want to raise taxes, but if you want to live in a country that pays for unemployment benefits, social security, medicare, police, firemen, a top military power and a list of other things people don't want to go away, we've got to pay for it. What's interesting is that a lot of people don't connect the dots between public services and their tax dollars. Perhaps some Democrats do, but there's a huge disconnect with the general Republican population and their favorite mantra of "no new taxes."
The Other Half of the Budget Equation - Raising Taxes
I've talked a lot about spending cuts in the form of eliminating some entitlement programs, cuts to military spending by reducing waste and fraud, and savings to be had by efficiency in all government, but I've written very little on raising taxes. It's a crappy subject. But the reality is, if we want public services, we pay for them together with our tax dollars. Now, when people think raising taxes the first thing that usually comes to mind is more money lost from your paycheck. I do the same. Your paycheck is the most regular way you see the government at work - to take your hard earned money away. But there are plenty of other ways to raise taxes and it doesn't have to come from the middle class.
Getting Rid of Tax Loopholes is Another Way of Raising Taxes
There are many tax breaks, benefits, loopholes, whatever you want to call them, that most middle class Americans do not use. In fact, you can find a list of them on the Internet very easily and the New York Times does a decent job of publishing a number of pieces that focus on specific tax loopholes. These could be anything from ridiculously expensive mortgages to capital gains and futures contracts (stock market stuff). The money raised from those three issues alone is more than the annual federal budget for education.
Now, we have to be careful here, because political reactions to "rich people getting all the breaks" can cause policy to go overboard, which can have huge negative consequences. For example, let's look at the issue of repatriation or bringing back money your company earned in overseas markets. If you owned a business and I told you that when you bring those earnings back onto U.S. soil that you had to give me about 40 percent of it, what would you do? My guess is you would keep it off U.S. soil. That's the current practice for a lot of companies in the Silicon Valley. I say tax them, but do it at a more reasonable rate, let's say, 20 percent. 20 percent of something is better than 40 percent of nothing.
Anyhow, long story short, in order to truly deal with this budget problem we've got to take cue from both sides of the battle. That means making meaningful reductions in spending, cuts and raising taxes.
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