Tag Archives: taxes

Self-Interest Properly Understood–and Taxes

Since at least the late 1980s, policy disputes in the United States have largely revolved around the actual and perceived deficiencies of government. It has been an article of faith among self-styled fiscal conservatives that wasteful state and federal governments are imposing excessive and unnecessary tax burdens on the American public.

Engaging in this line of argumentation is particularly  appealing to candidates for public office, since it plays to widespread resentment of the obligation to pay taxes while avoiding the pesky need to identify specific instances of the “fraud and waste” that are widely supposed to exist.

There are certainly situations where tax dollars are misspent. Most of those situations involve poor management practices, since voters tend to base their support for political candidates on ideology rather than perceived managerial competence. But more often than not, assertions of “waste” are based upon disagreement with something that government is doing–a belief that services being provided or programs being supported are unnecessary (especially when such services or programs are primarily seen to benefit others).

What government should do, and how it should fund what it does, are persistent and entirely legitimate issues. The problem is, too many of us have imbibed the Kool-aid; we want the services, we want to live in thriving communities with a good quality of life, but we don’t want to pay for the services and amenities necessary to produce that quality of life.

Worse, we frequently don’t recognize the ways in which we benefit even from government programs and services we don’t personally use. A couple of examples:

When voters are asked to support bond issues or tax increases for public education, people who do not have children in the system (usually a majority of those voting) often oppose the measures, because they see no personal benefit, no immediate “return on investment.” What they fail to recognize is that the quality of local public education systems affects their property values, enhances (or diminishes) job creation efforts, and makes their communities safer and more attractive. In the long run, good schools are in their personal self-interest.

Similar metrics apply to taxes for public transportation. Even people who will never use transit benefit personally from public transportation systems that reduce congestion, improve air quality, connect low-income workers to their places of employment, and improve mobility for the elderly and disabled.

Even people who care only about minimizing their personal tax burden will ultimately benefit, because long-term, the ability to hold down tax rates  (especially here in Indiana, where constitutionally-imposed tax caps severely restrict municipal governments’ revenue options) will depend upon a city’s ability to grow its tax base–its ability to entice people to move in, buy homes and start businesses. Cities that successfully market themselves do so based upon quality of life measures–good schools, well-maintained parks, excellent public transportation.

Often, sound investments take time to generate returns. That’s particularly true of investments in our communities.

Sometimes, “self-interest properly understood” (as De Tocqueville noted many years ago) is the opposite of immediate gratification. That doesn’t mean the investments aren’t necessary and worthwhile.


One Mystery (Possibly) Solved…

None of the theories to date about the reason for Trump’s refusal to release his tax returns have seemed very persuasive, but when I read this reporting by the Washington Post’s David Fahrenthold, I had an “ah ha” moment. 

Apparently, “deadbeat Don” has reported–and presumably deducted– charitable gifts that he didn’t actually make. Multiple charities are telling Fahrenthold that they never received donations that the Trump Foundation listed and claimed on IRS submissions.

One can see how the disclosure of tax returns reporting non-existent donations might be…embarrassing.

Of course, even if the existence of improper deductions does solve one mystery– the reason for Trump’s refusal to share his tax returns–it leaves us with a number of others. Why, for instance, would a man who clearly has no interest in public policy or administration run for public office? Why would a candidate who is totally ignorant of the basics of constitutional government refuse to inform himself about those basics? Why would someone who has never run in a political campaign ignore all advice from people who understand what such campaigns require?

The answers to those and similar questions are probably only obtainable on a psychiatrist’s couch. And ultimately, unless he wins (which, thankfully, is unlikely) the idiosycrasies of a self-obsessed megalomaniac will ultimately be matters of only passing interest.

The more pressing question–the question that keeps me up nights and consumes reasonable Americans, Republicans and Democrats alike–is why would anyone vote for this man?

In any sane universe, Donald Trump is a joke: a tacky, ignorant narcissist who communicates at a third-grade level, lies compulsively (and not very convincingly) and thinks childish insults and ad hominem attacks are debate points.

The reason for some portion of his support is abundantly clear. (Despite walking her comments back, Clinton quite accurately described these voters as belonging in a “basket of deplorables.”) White supremacists, anti-Semites, racists, sexists and xenophobes see him–probably accurately– as one of them. But other people, who don’t appear to fall into those categories and who don’t appear to belong in the basket, also tell pollsters they support him.

I assume some number of die-hard Republicans will vote for the party’s candidate no matter what–although Trump has made it clear that he has no respect for longstanding Republican positions (assuming he even knows what those are). And I suppose there must be some people who are so horrified at the prospect of a woman in the Oval Office that they will opt for any male, no matter how unfit and/or dangerous. But beyond those (hopefully small) categories, I am hard-pressed to understand why any voter would see this repulsive ignoramus as remotely Presidential.

I know I’ll hear from readers who hate Hillary and who will claim that Trump is no worse; however, even they know that is manifest nonsense. Even if you believed every accusation that has been thrown at her (despite the innumerable investigations that have come up empty), there is still no equivalence. Besides, large numbers of critics who detest her have publicly confirmed that they won’t vote for Trump. They’ll vote for third-party candidates or leave the Presidential line blank. Depending on the state the voter lives in, those actions do help Trump, but they aren’t the same as affirmatively supporting him.

I want to know about the people who actually plan to cast a vote for him. Who are they? What am I missing?

Why would anyone who isn’t a White Nationalist vote for an unstable, demonstrably unfit blowhard whose election would quite obviously pose a clear and present danger to the nation and the planet?

Inquiring minds really want to know.

The “Liberty/Equality” Conundrum

In my classes, when I get to the 14th Amendment’s Equal Protection Clause, I generally begin with a discussion of what Americans mean by “equality,” and the perceived tension between equality and liberty.

Clearly, if we are talking about the operation of law and civil government, we are bound to understand the call for equality as limited to those areas in which government operates, and not surprisingly, there is a pretty substantial literature exploring what it means to be “equal before the law”– to have equal civil rights and liberties.

It isn’t simply us lawyer types, either; political philosophers have argued for years–okay, centuries!–that government efforts to nudge us in the direction of egalitarianism–that is, in the direction of material equality— diminish liberty and are ultimately immoral, because advocates of redistribution tend to ignore the issue (near and dear to more libertarian hearts) of merit or desert.  Those who see it that way read the famous Marxist admonition: “from each according to his ability, to each according to his need” as support for expropriation — a system where productive and conscientious workers would be taken advantage of by the ineffectual and/or lazy.

Americans have a deeply-rooted cultural belief that people are poor because they are morally defective, and it didn’t start with the Tea Party. I once traced Indiana’s welfare system back to the 15th Century English Poor Laws- laws that prohibited giving “alms” to “sturdy beggars.”

So here we are, stuck, policy-wise.

We have a longstanding (and probably insurmountable) concern about the fairness of taking money from people who have (at least theoretically) earned it in order to help people who–for whatever reason–have much less. In more selfish eras (like now) that distaste for redistribution jaundices our approach to taxes for even the most traditional civic purposes. Paying more taxes than absolutely necessary (i.e., police, fire and maybe the sewer system)  is seen as state-sponsored theft, or at the very least, a deprivation of liberty.

As I previously noted, it isn’t difficult to find people arguing that efforts to narrow the gap between rich and poor (redistributive taxes) are assaults on liberty. If there is one thing Americans appear to agree upon, it is the pre-eminence of liberty over other values. What we don’t see discussed very often, however, is what we mean by liberty–and the extent to which government is responsible for ensuring that citizens can access it.

Liberty, at its most basic, is my ability to live a life of my own choosing, so long as I am not harming someone else–my right to live where I like, marry whom I love, choose or reject a church, vote for candidate A rather than B, raise my children as I see fit, opt to spend the weekend at a museum or in the garden….But there are a lot of people in my state (as elsewhere) who do not have liberty in any meaningful sense, that is, the ability to make these minimal choices, because every waking moment is spent simply trying to survive.

Every person struggling to make ends meet is not a “sturdy beggar,” trying to pull a con. (If research is to be believed, relatively few are.) But rather than trying to change this stubborn cultural meme, or reminding ourselves of the multiple ways we all benefit when societies are more equal, let’s ask a different question.

If a 10% increase in your taxes could be shown to provide public services  allowing every American to enjoy at least a minimal level of liberty/self-determination–would you pay it?

Or is the liberty you cherish limited to your own? If it’s the latter–I think that’s privilege you are valuing, not liberty.


Privatizing Libraries

What with the wild and weird Presidential campaign, and the focus on the Supreme Court in the wake of Scalia’s death, there’s much discussion about the operation of the federal government. But Americans have really been engaged in a much longer debate–largely uninformed–over the role of government in general.

And that debate has “evolved;” a recent column from the LA Times brought me up short. It began:

The list of responsibilities that a local government must shoulder isn’t an especially long one. Typically it includes keeping the streets paved and the streetlights lit, maintaining adequate police and fire services, inspecting buildings, sometimes providing water. One hallmark of almost every local jurisdiction is the free public library.

So the proposal before the Kern County supervisors to turn over the county library system to a private company operating out of suburban Maryland marks a major step. If you’re looking for a sign that local political leaders are intent on giving up all pretense of working for the public interest, look no further.

As the columnist points out, the proposal to privatize the library system is part and parcel of the long slide in spending on public infrastructure, the result of viewing the public budget as an expense rather than an investment. The Kern County supervisors are choosing between turning the library over to a private, for-profit company, or imposing a sales tax increase of one-eighth of a cent to fund the libraries.

How, one might ask, does a company make a profit operating a library? According to the story, LSSI, the company in question, cuts down the number of employees, “squeezes” those who remain, and replaces existing pensions with cheaper 401K plans. Even then, the proposal defies logic.

Chronic underfunding and repeated budget cuts have allowed the Kern County libraries to deteriorate physically, while the county spends money instead on an 822-bed expansion of its jail. Library employees are among the lowest paid public workers in Kern County, the advocacy group says.

Turning management over to a firm that will add its own profits to all the other expenses incurred by a library system doesn’t seem on the surface to be a path to improved library services. The money will still have to be found to improve and maintain the physical plant, acquire books and magazines, and upgrade the system’s electronic access.

Something more fundamental is lost when a system such as libraries becomes privatized. The sense that government exists in part to provide infrastructure and services that should be immune from the influence of private interests.

Free public libraries create and nurture community. They cannot be replaced by bookstores (as former Mayor Goldsmith once advocated) or other for-profit ventures. Their importance in the age of the internet has actually grown, as they have moderated the digital divide and curated essential access to credible information.

Government isn’t a business. It exists to provide public goods– services that the private sector cannot and will not provide. When we starve and diminish it, we lose that which makes us a community–an “us”–rather than an assortment of winners and losers who simply occupy a common geography.

Privatized libraries are a step too far. Far too far.



Bosma: The Grownup in the Room

Well, the usual suspects are all ganging up on Brian Bosma, the Speaker of the Indiana House, who has had the temerity to suggest that, if we want roads we can drive on, we probably need to pay for them.

As the Indianapolis Star reported

Hoosiers could pay more for gas and cigarettes under a road funding proposal being crafted by Indiana House Republican leaders.

The proposal also would provide for a study about turning I-65 and I-70 into toll roads.

House Speaker Brian Bosma provided some details about the proposal during a legislative conference Downtown on Wednesday. The funding plan would index the state’s fuel tax to inflation and gradually shift all of the 7 percent sales tax on gasoline to the motor vehicle highway fund, which is used for state and local road projects.

Bosma said the plan would create a sustainable, long-term solution for maintaining Indiana’s roads and bridges, but he acknowledged that some would consider it a tax increase.

Now, it’s perfectly reasonable to argue for alternative ways to raise the necessary revenues, or to ask for assurances that funds raised will be prudently spent– but those aren’t the arguments being mounted by Bosma’s opponents. They are opposed to anything that looks remotely like a tax. No matter what.

Senate Appropriations Chairman Luke Kenley, R-Noblesville, said the proposed tax adjustments would be a tough sell in the legislature, where many Republicans have pledged never to increase taxes.

This impasse is a stark reminder that there are two kinds of Republican in Indiana (as elsewhere): those interested in actually governing, and those (like our embarrassing Governor) interested only in pulling down a public paycheck for posturing and pontificating. And there are more of the latter than the former.

News flash, ideologues: there is no free lunch. There is no way to provide necessary public services, no way to maintain critical public infrastructure, without adequate funds. Taxes are “user fees”–they are the price we pay for civilization, our social “membership dues.”

Grownups understand that.