We all know the legends of Robin Hood and his band of outlaws. According to the legend, he was born a nobleman but experienced the inequities of society and decided to correct them. Whether or not Robin was real or fictional, the notion that the bounties of society are not distributed equally has always been with us.
The American Revolution, or as the British call it, the War of Independence, was equally about power and money. Taxation came to be viewed as a transfer of wealth from the colonies to the British Crown, and that became the sticking point. The French and Russian revolutions too were about the concentrations of wealth, and became radical solutions to redistribute it. Not entirely successful, as history will tell us.
I heard an interviewee on the radio the other day mention, upon seeing pictures of billionaire Jeff Bezos’ recent wedding in Venice, that it was one of the “greatest collections of tax evaders”. Indeed, it was – people frolicking amidst vast wealth while the Senate has just passed a government budget proposal, yes, the one the president describes as “big, beautiful”, and what polls show is wildly unpopular, that sustains and prolongs tax cuts for the wealthy and promises to add trillions to the federal deficit, while cutting services – healthcare services and protections primarily for lower income people and seniors, food subsidies, cultural enrichments like libraries, environmental protections, medical research, all that benefit everyone. The president has surrounded himself with the superrich like himself. Perhaps seeing a reminder of French King Louis XVI’s severed head being held up while the Paris crowds cheered, or the bullet-ridden body of Benito Mussolini hanging upside down in disgrace, might be vivid reminders to Mr. Trump and his advisors of what happens when leaders turn a deaf ear to the whole of society. And yet the Trump administration, with its recent campaign of “slash and burn” funding, continues to take a “let them eat cake” approach.
In centuries past, taxes were raised for Kings to wage war. Those paying the taxes, the workers, tenant farmers – in fact, the vast bulk of the population, didn’t see much of any return on their taxes, nor was much of anything provided for them by their government. The Crown raised the money and spent it, mostly on themselves, because keeping up Hampton Court, and later, Buckingham Palace, were expensive. Of course, the aristocracy didn’t pay taxes, nor did the church, leading of course to some bitter resentments. The responsibility to fund the government feel on those least able to pay. I remember a number of years ago, driving along the coast of Nova Scotia, seeing small villages of humble houses, but in each one, an enormous, elaborately built church of brick or stone. To last generations, centuries. On reflection, that told me where the community’s wealth was going. Because the Church has always been good at inflicting guilt to encourage donations. In reading a biography of Queen Victoria, it was curiously pointed out that Prince Consort Albert would, from time to time, venture into the “less respectable” parts of London to see the living conditions of the poor. The filthy living conditions, the pollution and disease. He was appalled, and brought this to the attention of the Queen. Parliament was, however, resistant to change, and poor Albert was but a voice crying in the wilderness.
In the United States, since the income tax was instituted more than 100 years ago, the concept of taxation to fund the common good – national security, along with education and much later a host of social programs like Social Security, Medicare, Food Stamps, and the like have taken hold. These are programs that Americans have come to know, to use, and to expect, and typically go far beyond a community’s or even a state’s ability to fund. Former Vice-President Al Gore was keenly attuned to climate change and the environmental dangers of our heavy reliance on fossil fuels. Former President Biden took it to the next step, instituting a program of tax credits for new, clean energy. The range of programs for the future were to become his legacy – tax credits for clean, sustainable energy, expanded health care, and infrastructure like highways, bridges to name a few. Those are works in progress, with Americans standing firmly on either side of those issues. But they bring us back to the basic premise of taxation. It’s a balancing act – how much is too much, or in fact is anything too much? How much should we count on state, and the federal governments to fund, and how much is community or personal responsibility? Again, we come back to the central tenet – is taxation, government spending, an investment from which everyone benefits, or is it something we can fight against with every fiber of our being, on the assumption we can all pay our own way? Except we can’t. There is significant documentation that up to the housing crisis of 2008/09, the leading cause of personal bankruptcies in this country tended to be costs associated with health care. That is in stark contrast to most other industrialized countries, all of whom make medical care a priority. And yet, the current budget proposal slashes funding for most or all of those domestic initiatives, it’s a giant step backward both in the history of taxation and in the history of human development. Its effects will be felt widely and disproportionately.
Taking from the poor to give to . . . .
The contentious issues with taxation, of course, are two-fold. Who should pay, and how much? Should it be based on income and overall wealth, property and other assets, or should everyone pay the same? There is an interesting and sometimes hostile debate going on now about a “wealth tax” in Massachusetts. It’s generating government income, while critics claim it’s driving out those with high incomes. Should people with greater wealth pay more in taxes? Some high-earning folks like Warren Buffett say, “absolutely”, while Jeff Bezos and Elon Musk don’t agree. Even the wealthiest Americans can’t agree on what is fair. I personally saw some benefit to the federal income tax revisions of 2017. However, I’m not sure that everyone did. We know that the wealthiest individuals and corporations made out really well, including the president. Those of us in the middle/lower income tiers made out marginally better, and some not at all. That, perhaps is to be expected – in any tax shift, there will be winners and losers. State funding for education in New Hampshire is not terribly significant – the state contributes only a fraction of what most towns and cities spend per student. Because we “live free or die” here in the Granite State.
This all comes down to the initial question. Is taxation an investment or a curse? Is it a societal responsibility that we all must bear, or is it something we can manipulate to our personal advantage because taxation is inherently a “bad” thing? If in fact, we think of it as “wasteful spending”, as is evident in many political statements these days, then it’s a curse. Whatever is collected and spent is unwanted and unnecessary. They’re not always wrong, and I don’t, from time to time, know where I stand on certain issues. We all know about the thousand- dollar Pentagon toilet seats. Or fraud in the pandemic reimbursements and Medicaid. So yes, wasteful spending of tax dollars does exist, but studies have shown repeatedly that it’s a very small percentage of the overall spending. On the other hand, if we think of taxation as comprehensive improvement, there are swings and misses, but a lot – a healthy percentage – of hits. New roads, railroad tracks, bridges, and public transportation, new schools, newer and safer sources of clean energy and jobs associated with them, technological innovations, less pollution (or pollution cleaned up) along with newer and safer water and sewer connections, new food products, medical research, consumer protection, are a few. It’s doubtful that Elon Musk or Donald Trump will ever need Medicare or Medicaid, so what they perceive as “wasteful” are to millions of folks, essential and life-saving. Nor will they ever know of the short-and long-term damage their cuts have made until the consequences begin to reveal themselves. And they will. Unintended consequences. As, for example, the current heat wave sweeping Europe, a direct result of climate change, for which we humans are significantly responsible. Considering government spending with some degree of thoughtful analysis, those on the side of “investment” have something much more convincing to argue.
Have a great July 4th, Everyone.
I'm Thinking...No! 