The Real Tax Debate

Posted April 14, 2010, at 8:20 p.m.

Americans are wise to scrutinize U.S. tax policy. Thanks to the Tea Party movement, today — the deadline for filing federal income tax returns — is more politically charged than it has been for years. But Tea Party adherents would do well to examine the foundations on which their activism is based.

Their anger is easy to understand as they calculate how much of their paychecks or business profits are sucked south to Washington each year. According to the Tax Foundation, Americans will have to work 99 days of the year — until last Friday — to pay the typical federal income tax bill. That’s one day more than in 2009.

Tea Party followers aren’t the only tax protesters. On the left, many oppose the federal government spending so much on defense. For every $1 of federal income tax, the government spends about 41 cents on military personnel, hardware, benefits to retired personnel and interest on the military portion of the federal debt.

For the record, the rest of the federal tax dollar includes: 19 cents devoted to health programs like Medicaid and Medicare; 12 cents for poverty programs; and 10 cents on interest for the nonmilitary portion of the debt.

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The pocket change portion includes: 5 cents on community and economic development, including agricultural programs, highways and mass transit; 5 cents on education, employment training and other social services; 4 cents to operate the government, including law enforcement, homeland security and benefits for government employees; 3 cents for science, energy and environmental programs; and 1 cent for international humanitarian aid and other diplomatic efforts.

If tax protesters on all sides truly want to change these numbers, they need to focus their activism and be informed by the realities of federal tax policy.

A good first step is to urge government to examine its mission statement, to reimagine what it exists to achieve. Government can be reconfigured with a much narrower mission; in this, the Tea Party and Libertarian Party are correct. It’s just that the strict constitutional structure they imagine is not realistic, given the size and complexity of the nation compared to its 18th century roots. And Tea Party members also must be realistic in envisioning what their lives would be as if the federal government were limited to providing for the national defense and protecting trade.

Still, every new initiative should be weighed against a consensus of what government’s core mission is. In addition to providing for the national defense, it should provide a social safety net. It must spend money to enforce the nation’s laws in arenas such as the environment and workplace. And it makes sense to spend the big money that only it can muster to tackle infrastructure, energy, agricultural, medical and scientific problems.

When the economy improves, tax activists must sound the real battle cry. When both Washington and Augusta are flush with revenue from a growing economy, our representatives must resist the urge to restore funding across the board, or create new programs. The Tea Party and others can play a vital role in reminding them to keep government lean.

At the same time, if our congressional representatives hold the line in the growth of government spending in the 2 percent to 4 percent range, they have succeeded. Expecting a tax rollback of 10 percent is a fantasy, just as expecting the cost of living to drop by 10 percent is unrealistic.

Many Americans are still sore about the government bailouts. Seeing the huge outlays of our tax dollars for others’ mistakes was galling. Allowing AIG, our largest national banks and American automakers to collapse would have provided a satisfying sense of comeuppance, but would have meant a frightening implosion of our economy. Deficit spending in poor economic times is essential.

The second battleground cry must come in how the tax bill is split. On this matter, the Tea Party is silent. Yet tax cuts benefiting the wealthiest of Americans under the Bush administration and the Republican Congress — while the administration waged two wars — contributed largely to the deficit. President Barack Obama’s pledge to shift more of the burden back to those earning $250,000 or more is just and fair. While fiscal restraint is important, the vast majority of Americans have a better chance at seeing tax relief through this shift than through a hoped-for dramatic contraction of government.

Throwing tea, metaphorically speaking, into the harbor makes a powerful statement. Dogging the heels of our representatives as they decide what to fund and how to split the bill is harder, but more effective work. printed on October 28, 2016