Friday, April 08, 2011

Shutdowns and Thievery - Taxation and Our Republic

The Tea Party rhetoric of “taxes are thievery” held by some of the angrier and extreme members of the polarizing group is not necessarily in keeping with the truth of our Democratic Republic. While often a view of the far left and far right on the libertarian spectrum it is not part and parcel of the republican theories that contributed to the construction of the United States governmental infrastructure.

The common error made by Libertarian extremists is that our founding fathers were all libertarians. Many were definitely libertarian idealists, but libertarian in the framework of the emerging Republican Theory of the 18th century. And these Republican Libertarians such as James Madison and Thomas Jefferson clashed with the Federalists, best typified by Alexander Hamilton.

I know that will gall many people especially this time of year as we are all rushing to file our personal income tax returns with the oppressive Internal Revenue Service. This is the first year in many years that I have had to write a check out to the IRS instead of getting my customary refund. I am not happy about this. The irony here is that I also paid less in personal income taxes this year than I did in 2009. This pain is made more outrageous by the reports that General Electric has managed to avoid paying hardly any taxes if none at all. It is certainly a condemnation of our current corporate tax laws.

But, at the end of the day, whether we like it or not, governments need to assess taxes. And as citizens of this democratic republic we have a responsibility to pay our fair share. That is part of the social contract. This is our government. We have a broad scope of civil liberties. We need to contribute to the upkeep of our national infrastructure. You want a voice in the democratic process you pay taxes for the privilege.

Certainly as one of the thousands of rank and file “little guys” I take umbrage at the vast amounts of corporate and personal accumulated wealth that escapes taxation while the vast majority of us struggle to get by. The reader should not mistake my tone as one of compliance or willingness to pay taxes. Taxes are an ugly reality, especially income taxes. I have often doubted the constitutional validity of the IRS…it does seem to be constitutional much to my chagrin. To be very certain some taxes are more unreasonable than others. The issue isn’t that we should never pay taxes, but what constitutes a reasonable tax and how much we should be required to pay. The Boston Tea Party, the iconic example of American tax revolt and the event from which the bellicose Tea Party takes its name, is the primary lodestone that laid the foundation for our revolutionary war -taxation without representation.

Taxation without representation is most definitely thievery. Taxation without representation is slavery. It is the world of lord and serf. The issue of taxation is pivotal to that most American of political questions. How large should are government be and how broad of scope should their involvement be in the lives of citizens? Even if we take the extreme position that the US Constitution, as stated in its preamble, exits only to provide for the common defense and keep the wheels of commerce rolling we still need to concede that a certain level of taxation need to exist. One of the necessary requirements of commercial enterprise is roads and highways. There are many others.

The problem that we are facing as a shutdown of the federal government is looming is that Americans are largely fiscally and economically illiterate. This is true of Joe Main-Street as it is of the majority of our elected officials. On one side we have the Republicans who are forming their ideology around discredited ideas and the Democrats whose centrists have largely adopted Reagan era fiscal policies – also discredited. Yes, I am talking about Clinton and Obama.

On the extreme left we have progressives that, while intelligent and socially concerned, also operate from ideas that have not proven to work readily as well. The most offensive of these Republican ideas is the constant refrain of cut the budget, cut taxes and lower taxes which is akin to saving a company from bankruptcy by cutting both expenses and revenue – Quixotic! As concerned as Republicans and Tea Partiers are over the Federal deficit they are more concerned with their own bottom lines. This guarantees that they are not after the best interest of our nation. The stark reality is that despite the budget cuts – upwards toward $60 billion in proposed reductions – both parties are doing precious little to mitigate the crisis and right size our federal government.

It is a myth perpetrated by conservative ideologues that liberals don’t like budget cuts. We are all for cutting pork barrel spending and redundant and unnecessary programs, especially those demonstrated to not work. Our concern is that congressional conservatives and libertarians of the right want to eliminate all entitlement programs such as Medicare, Social security and continue to support a health care system that makes insurers wealthy while breaking the backs of hard working middle class and working class Americans. As expensive as Medicare and Social Security are in terms of federal budget dollars, the cost of reducing and eliminating them create a potential humanitarian crisis that is unacceptable. Not to mention we have all had hard earned money taken from our paychecks in FICA contributions to help fund these programs.

No one in congress seems to want to address this or the reality that when you have a large deficit you can’t decrease taxes. In fact you might even need to increase tax rates. But, here is the thing – if corporations and private accumulated wealth are forced to pay their fair share of taxes rather than taking advantages of loopholes in the tax code, the federal government could see – theoretically, an increase in revenue that would be helpful in resolving our current federal budget – deficit crisis. Reasonable and necessary budget cuts are important, but that is only part of the solution. Generating tax revenue is also necessary.

Taxation is a necessary requirement of our democratic republic, but insomuch as the moneyed and privileged classes, by the fact of their wealth, have more power and influence it is only reasonable that we expect them to pay their share of the tax burden. In many ways it is they that are the thieves among us. They are not only robbing from us on Main Street, but from future generations as well. Taxation is not thievery as long as we have a say through our electoral process, the reasonableness of certain taxes and the use of tax dollars is another issue altogether.

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