Sales Tax as a Moral Issue

National Public Radio reported on the trend among Republican governors to cut income taxes, often by proposing a broader sales tax.  Even in once-progressive Minnesota, Democratic governor Mark Dayton is proposing a scheme to increase sales tax by increasing the goods and services subjected to the tax.

In an era when the wealthiest enjoy a lower real tax rate than the poorest, it seems immoral to increase the tax burden on the poorest.  Furthermore, we have a depressed economy and that hurts the poor and the middle class the most.  Meanwhile, the very wealthiest, those already paying the lowest tax rates, have realized strong economic gains.

Forget the phony arguments about supporting job creators and business owners — an argument you’ll hear in NPR’s story — isn’t this really a moral question when we choose to increase taxes on those least able to pay them while those who have the resources to pay them get by with lower real rates?  There’s something almost criminal about that.

Let’s look at an example.

Let’s use after-tax disposable income and say that Family A has $50,000 after taxes and Family B has $500,000.  In this hypothetical example the sales tax rate is 5%.  Suppose family A spends only $40,000 of their income on taxed items at 5%.  That’s a tax of $2000.   Family B spends $200,000.  That’s a tax of $10,000.  So Family B is doing more to support our government, right?

Well, yes…in dollars.  But Family B has $300,000 in savings, a valuable asset that Family A does not have.  We could talk about the material benefit of having five times as much goods and services to enjoy, too, but cranks will complain that this is a subjective criticism akin to resentment.

The real issue is in the rate of tax.  We can look at the rate of tax as a factor of overall disposable income to make a comparison.  Family A pays an effective rate of 4%.  Family B, however, pays an effective rate of 2%, half as much.  Now I think we CAN look at the discrepancy of material benefit in items and services bought and savings gained.  Family B is much better off in the end while Family A pays a disproportionately higher amount in taxes.

In the age of inequality — with all the harm that that it creates — why would we foster further inequality?  On what sensible argument can you justify further depressing the wealth and power of those who are already behind?

Keep in mind, too, that the very poorest among us cannot escape sales taxes.  The mean-spirited argument that some people pay no taxes at all is demonstrably false.  Those “tax free” people actually pay.

Finally, as taxes expand to cover essentials like food and services like legal representation, the poorest are hit again.  We should protect the basic necessities of life, like food, clothing, and shelter.  And in a society where the quality of legal representation matters in issues of justice, freedom itself can depend on the ability to pay for legal services.  Taxing these services only tips the balance away from serving the poor and working classes.

In the age of inequality, sales taxes are not just a bad idea, they are an unjust solution that point to moral problems in our society.

Related articles

• Wealthiest Americans Pay Half the Effective Tax Rate That Poorest Pay in State and Local Taxes (yubanet.com)
• Budget 101:  A graphic primer to Dayton’s budget proposal (minnpost.com)
• The New Republican Tax War:  State Tax Hikes on the Poor to Fund Tax Cuts for the Rich (politicususa.com)
• Poor Americans Pay Double the State, Local Tax Rates of Top 1 Percent (huffingtonpost.com)

America’s Real Job Creators

America's Job Creators

Republicans are at it again.  Claiming they are going to save America by protecting America’s job creators.  If by now you don’t experience a sudden gag reflex whenever you hear a conservative say “job creator,” you need to understand who creates jobs in the United States.

The job creators are not the wealthy elite who fear uncertainty and risk.  No.  The real job creators are the people who actually work the jobs we need to create.  This argument might seem circular because…well…because it is.  Without jobs for America’s middle and working classes, our economy hasn’t the demand for goods and services it needs to spur job growth in an economy like ours.

There is no rational reason — none whatsoever — for the so-called “job creators” that the Republicans protect to create jobs unless and until average Americans have resources to spur economic growth.  Without demand, our economy remains flat.  Even a sophisticated supply-sider understands this; Milton Friedman himself understood this.  But you don’t need an economic degree and a fancy theory to understand this.  Look around.  As we have allowed America’s wealth to trickle upward, detrimental economic results have followed.  The numbers are what they are and those numbers are not good.

Conservatives perpetuate misleading job creator myths because they need to hijack the economy they wrecked in order to impose their regressive social agenda.  The starve the beast strategy is working.  By underfunding government and leaving the economy in ruin, conservatives can argue that poor economic times equal poor prospects for economic growth.

Republicans either don’t understand what is stunting economic growth or they prefer to lie about it in order to trick people into voting against their best interest.  I believe more in the latter than the former.  Regardless, Republicans in Washington should know better…and they do.

An economy that depends on middle class spending is one that needs to respect the middle class more than our current political efforts allow.  Unfortunately, politics today have gone dangerously awry.  It is a disgrace.  Once respected professions in the public sector, like teachers, are dismissed as lazy beggars.  Unions have become a slur on par with communism, socialism, and fascism…never mind the accurate definition of any of these terms…when telling lies they’re all equally bad and equally to blame for ruining America.  Ask Scott Walker.

More Job Creators

What people don’t seem to notice is how gutting the middle class and disparaging the working class has coincided with America’s decline.  The problem is simple.   Our economy does not work because it has less and less to work with.

Meanwhile, as our wealth and treasury flows overseas — into markets in which we haven’t a competitive advantage — those who have the good fortune to invest in those markets thrive while the rest find it more difficult to survive.  The quality of life most people once took for granted is in decline and in danger of being lost for years to come.  And yet we continue to pursue policies that perpetuate this damage, not policies that offer real alternatives to the damage caused since politicians turned against America’s real job creators.

It is time we support America’s real job creators.  After all, what has been the advantage of doing otherwise?  Can we really say we are better off today than we might have been 20 or 30 years ago?  How about just a short ten years ago?

It is hard to see what more anti-tax, anti-government policy will do to make us whole again when that approach is precisely what hasn’t worked for our nation’s advantage.  A key to fixing what isn’t right is a better understanding of what really creates a dynamic economy and economic growth.  Wealthy investors enriching themselves overseas at taxpayers’ expense isn’t the way to get that done.

Save your future.  Don’t vote Republican.

Related articles

• Is it Taxes or Demand?  (alittletourinyellow.com)
• 7 Ways to Support the Real Job Creator: Main Street (alternet.org)
• Paul Krugman: All the G.O.P.’s Gekkos (economistsview.typepad.com)
• Harry Reid: Millionaire Job Creators are Like Unicorns (michellemalkin.com)
• Don’t Tax the Rich.  Tax Inequality Itself.  (nytimes.com)

A New Idea for Cap and Trade

Look closely...I'll be damned! Do you see that?

As the GOP and their exploited poorer cousins in the Tea Party seem to be in a race to outdo each other in bad ideas, the country suffers.  There doesn’t seem to be any stopping their pointless symbolic posturing – big issues, real issues can wait – so we might as well find a way to benefit from their fumbling about.

Why not impose cap and trade-style limits on GOP stupidity?  (That’s emission control we can all learn to live with!) 

Give them as much rope as they need to hang themselves while preventing wholesale destruction of the country.  Quantifying stupidity of the conservative sort would require a great deal of super computing power, so let’s keep things simple and keep the policy limited to elected officials. 

Limit legislators to one stupid bill per session, one stupid amendment, and maybe five stupid comments made to the media (we do need our comic relief).  Of course Democrats get the same allocation.  They can sell their stupidity quota to particularly prolific bad idea generators like Michele Bachmann or Scott Walker and help those poor little wannabe fascists.  Voila!  Redistributing stupidity can be a bridge-building activity!

I haven’t worked out all the details.  Key is getting the Republicans to go along with the idea, but that shouldn’t be so difficult.  Someone could start by going to Wikipedia and entering a paragraph in Ronald Reagan’s entry saying he actually came up with the idea.  Then have someone like Rachel Maddow call it a bad Reaganite plan.  In no time there will be a lot of conservative support for the idea.  Let’s get that done quickly, however,  so we can fast track laws creating the Stupidity Cap and Trade Act.  I even like the sound of it.

(By the way, we’ll all have a good laugh and feel good if someone could sneak a phony amendment into the Cato Institute‘s online version of the United States Constitution.  We can then look forward to hearing people like Glenn Beck and Rand Paul support the idea on the grounds of Founding Fathers’ authority.   Get those originalists all worked up!  Speaking of originalists, maybe someone could add a little to the Bible, too:  “And the Angel of the Lord said unto them, cap it and trade it, for your stupidity dost offend the Lord.”  That is a nice touch for Bachmann et al.)

But what will we trade?  Details.  I haven’t worked out all of the details.  Perhaps we could trade in something that could be paid in character and style, two things the GOP desperately lacks.  I don’t know.  Somebody help me out there.  However let’s not delay.  We have a country to save!

Related Articles

• Understanding Cap & Trade: The Infographic (treehugger.com)

Populist Misperceptions

Always Be Suspicious of Reckless Self-Promotion.

For my friend U No Hu, a very brief post commenting on current political thought as the middle class seems set upon eating its own.

The GOP of yesterday — say pre-Reagan — doesn’t look all that bad anymore.  The bad guys were clearly identified and most Republicans were rather civil and even somewhat liberal by today’s standards.  And they seemed to share at least one goal in common with their Democratic counterparts:  A better United States, even if you had to reluctantly engage government resources to get it done.

I’m not sure you can say that a better country is the goal of today’s populist politics, particularly from the point of view of the right.  It is more cut, cut, cut and we have reached a point where government workers — scofflaws like university professors and snow plow drivers — are “stealing” from the people.  I would venture to guess that many government employees work at least as hard as the people attacking them unless, of course, they are someone like Gov. Scott Walker who has a cushy office job and has someone else clean his official toilet.

The problem here is ignorance.  I actually think the problem is stupidity, but if people are too stupid to understand facts and reasoning, then we will forever be subjected to the will of the minority, as we are now.  I don’t like believing that…so I’ll ignore it.

People on the right fail to see how they support interests that pull our wealth up to the lucky few while at the same time dismantling decades of social and economic progress. 

Maybe it is time to start asking the knuckle-dragging mouth-breathers on the right to explain how…say…cutting government spending without raising taxes is going to erase a debt that exceeds total government spending.  In a state where an annual budget needs to be balanced, something doesn’t add up.

Or perhaps ask a more simple question.  What is rich?  And who fooled the average Tea Partier into thinking he is rich?  The truly rich have fed this idea into the heads of their followers.  A full third of Americans believe they are in the top 10% of income earners.  Again, a problem with basic math exists there.

Aw, isn't that cute? Did you make that for your mommy?

Ask a more complicated question, one that evaluates real versus nominal incomes and wealth, for example, and you can understand why the right stubbornly sticks to simple complaints that can fit on a 18″ X 24″ sheet of poster board.

But we’re better than this, aren’t we? 

http://www.ourfiscalsecurity.org/

Related Articles

• Class inversion (nowpublic.com)
• GOP set sights on Consumer Financial Protection Bureau (dailykos.com)