Let’s Talk About Taxes

Phew, it took me longer than anticipated to finish this one. I was shooting to have it out on Wednesday, which was the day the Republicans in Congress passed their final tax bill. Both houses were supposed to be in recess by this past Sunday, but they stuck around to get this passed in a vote that shot straight down party lines, which interestingly enough, Senator McConnell doesn’t think should happen when it comes to such important legislation:

The chaos [the Affordable Care Act] has visited on our country isn’t just deeply tragic, it was entirely predictable. And that will always be the case if you approach legislation without regard for the views of the other side. Without some meaningful buy-in, you guarantee a food fight. You guarantee instability and strife. It may very well have been the case that on Obamacare, the will of the country was not to pass the bill at all. That’s what I would have concluded if Republicans couldn’t get a single Democrat vote for legislation of this magnitude. I’d have thought, maybe this isn’t such a great idea.

-Mitch McConnell, January 8, 2014

Tax Forms
Photo by ccPixs.com / CC BY 3.0

Ahh, isn’t it great that we live in a time where it’s possible to so easily expect people to meet standards they set for themselves? Anyway, with the tax bill in mind, I had been planning to do a breakdown of taxation, so I thought now was a good time to get it out of my head and post it. I wanted to address what I want in a tax system as a progressive, why I oppose the Republican’s bill, and why I believe I should pay more taxes than those less fortunate than I am and why I have an expectation that people more fortunate than I should pay more, regardless of how they come across their money.

As I dug in, my word count quickly grew, and I ended up splitting this into two posts because I think this is my longest post yet, even after splitting it. This one goes into the first part. It covers my philosophy around taxation. What is the purpose of taxation and why do we need to pay taxes even if some of them go to things we don’t personally like or believe they should? The other one targets the Republican tax bill specifically, and why I don’t support it based on how it was passed and what it ultimately does. The second part isn’t quite finished yet, but I’ll link to it here when it’s up. You can find that post here.

Being a progressive person, conservatives would either have you believe that I don’t understand what I’m really advocating for, or that I’m a socialist that wants to steal the wealth from the hard-working job creators in this country, a.k.a. the wealthy, and give it to lazy, entitled, poor people and millennials. Neither of those things is true. If anything, conservative ideology and legislation, so called “trickle-down” economics or Reaganomics, has been causing a redistribution of wealth going the other direction over the last 40 years.

All the numbers I’m about to go through have been adjusted for inflation. If you take a look at this site, you can see that 50% of US families made less than $50,246 in 1974. At the end of 2013, that same 50% saw their wages rise to no more than $51,816. That’s an increase in purchasing power of $1,570, or 3%, over 40 years for the most fortunate of the bottom half. In that same time period, the Real GDP for the United States increased from $5.4 trillion to $16 trillion, going up just under 200%. Now, personal income doesn’t have to go up at the same rate as GDP, but it’s weird that half the country didn’t see any improvement from the GDP essentially tripling, right? Where did the new income and wealth go? It went to the top. In that 40 years, the top 5% of American incomes went from $143,662 to $195,968. That’s an increase of  $52,306, or 36%. Digging deeper into just the top 1% that we hear so much about, their incomes went from roughly $400,000 to roughly $1,300,000, an increase of $900,000, or 225%.

Let’s take a closer look at one company in particular that goes by the name of Wal-Mart. I feel okay picking on them because they are the largest private employer in 22 different states, employing 1.5 million people overall. Today, the Walton family — the 6 people that currently own Wal-Mart — have a combined net worth of $121.9 billion. That’s equivalent to the combined net worth of the bottom 40% of American families. That’s 6 people, with as much money to their name as 129,240,000 people. To give that a little more perspective, the average, individual Walton has more wealth to their own name than a number of Americans equivalent to the population of the states of Florida or New York. Meanwhile your typical Wal-Mart employee, most of whom are in that bottom 40%, aren’t paid enough to survive on and need food stamps and Medicaid to get by, costing tax payers an estimated $6.2 billion per year in welfare, medicaid, and food stamp costs.

I apologize for how many numbers I just made you read, but they back up my point that the least fortunate among us have seen wages stagnate for 40 years, while the most fortunate have seen their wages more than triple. Let’s move back to taxes, though, and I’ll start by letting you in on a secret: I don’t like paying taxes. I like money, and I want to keep as much of my own as I can. The republican tax plan appears as though it will give my wife and I as much as $6,000 back in our refund than we would’ve gotten otherwise, but I still don’t think this bill should have passed. Let me tell you why.

I don’t think we should raise everyone’s taxes so the lazy can live the good life without putting effort in. However, I do realize that I’m part of a society, and that living in it comes with certain responsibilities to my fellow members of that society. We need to ensure that people are given their 3 basic rights — life, liberty, and the pursuit of happiness. In my eyes, life necessitates healthcare, food, and shelter. Liberty necessitates our military defense, and the pursuit of happiness necessitates education, of any kind. A human being deserves these basic necessities, and they are necessities to a healthy, fulfilling life. Society can not be every man for himself. We need to come together to pay for roads, bridges, and the rest of our basic infrastructure that we use every day. We need to pay for schools to educate our descendants and ensure they have the tools to continue to improve the society we leave behind for them. We need armies to defend our livelihoods as well as those of our future generations. We need to pay for things that I may not support personally from a moral perspective and we have to pay for things that you may not support personally based on your own concepts of morality.

I’m not a proponent of socialism. I’m not a socialist. I like the free market. I think it fosters innovation and provides an incentive for people to try and better themselves in ways that other economic models can’t. I am not a fan of an unregulated free market, though, and that’s the key. Corporations have one goal: increase profit margins, and there isn’t much they won’t try in pursuit of that goal. Labor laws had to be put in place to protect children from being taken advantage of. Overtime laws were needed to keep people from being overworked without compensation. OSHA is a thing because worker safety wasn’t a concern that measured up compared to squeezing more profit out of people. Minimum wages needed to be implemented to ensure people were paid fairly, though I strongly believe it should be tied to inflation and/or the cost of living. Minimum wage was at it’s highest when it was $1.60 per hour in 1968, which was a time when the middle class was also at its strongest. If minimum wage had kept up with inflation since then, it would be approximately $11.40 per hour today, instead of it’s current $7.25. That extra $4.15 an hour would come out to $33.20 per day, $166 per week, $719.33 per month, or $8,632 per year. To help put that amount into perspective, the current poverty line for a family of four is $24,600.

If a person can work, they absolutely should. No one in this debate is advocating against that, but if you put in a full work week, you should be paid a living wage, regardless of how little skill or education your job requires. To be clear, I don’t believe a fast food worker should make as much as an EMT or a dental technician, as examples. I think all three of them are underpaid and deserve a raise. I also think it’s irresponsible of us to call ourselves a world leader when we aren’t taking care of those that need it in our own society and putting strong programs in place to help them get to a place where they no longer need that assistance. You should never be denied treatment that you and your doctor believe you need because you can’t afford the cost, and it’s absolutely ridiculous to suggest that you should. Imagine your doctor saying to you:

“We have treatment options for you, but they’re too expensive for you to afford and your insurance won’t pay for them because you had this disease before you started paying them your premium. I’m sorry, but I’ll do everything I can to make you comfortable while you die.”

How absurd is that? But that is more or less what used to happen to people every day. The concept of a preexisting condition is something we had to put legislation in place to stop. That’s another great example of what happens with an unregulated free market, and a clear reason that corporations need regulations to tell them what is and isn’t allowed in their pursuit of higher profit margins. A defect, mutation, or disease that you were born with could be called a preexisting condition, and keep you from getting coverage to pay for treatment related to it. That’s something that you had no control over, no power to avoid or fix, yet a private corporation that you bought health insurance from could unilaterally decide to withhold life-saving treatment from you because you had been born with the condition. Politifact’s lie of the year in 2009 was Sarah Palin’s myth that the Affordable Care Act would institute death panels, letting a group of bureaucrats decide if saving your life was worth spending money on, but even in that conservative horror story the bureaucrats didn’t have a direct financial stake in denying you coverage. Telling you no wouldn’t line their pockets. Private, for-profit health insurance companies make absolutely no sense to me, especially when our government already spends more per capita on healthcare than any country with a single payer system, but I’ll be digging deeper into that concept in a later post.

I know there is a subset of people that will take advantage of any social safety net we put in place, in any way that they can. People like this guy that was on Fox News. They touted him as the poster child of food stamp recipients, claiming that people like him were the ones taking the tax dollars from hard-working Americans, but that’s a massive over-generalization. For every one of him, there are hundreds of other men, women, and children thankful for getting to eat a meal and sleep with a roof over their head. People that have come on hard times and need some help with their bootstraps, even as they try and pull them up as hard as they can. I would happily give every asshole like Lobster Guy out there money for their sushi, lobster, cocaine, and heroin if it meant helping a family put food on their table or stopping someone’s mother, father, or child from needlessly dying from something they just couldn’t afford treatment for.

I told you I’m not a socialist, so what does that make me? Well, the closest thing I found to fit my beliefs is democratic socialism, which is what Bernie Sanders calls himself. I believe in a regulated free market with social programs that ensure even the most downtrodden member of our society can go to school, see a doctor, and get medication they need. I believe that when you lose your job unexpectedly, you shouldn’t have to worry about where your food or your mortgage payment is going to come from while you figure out what your next move is. If you get sick, need a surgery, or have an accident that hospitalizes you, money should be the last of your concerns when it comes to approaching treatment options with your doctor, as I’ve made clear above.

Let’s move away from healthcare and welfare, though, and on to education to round things out. An educated, informed society is necessary in democracy. Critical thinking skills are crucial to being a productive member of a society. Knowledge of government, politics, world history, and logical fallacies is vital to being able to make good decisions about your government and who you vote for. A strong education system is also important in ensuring people have ways to get back on their feet if they’re laid off because the industry they were in has become outdated or obsolete. We are in a time where technology is advancing faster than it ever has before. Progress that used to take an entire generation now comes in a couple of decades. The personal computer started to become feasible in the early to mid 1970s, and now, just over 40 years later, the smartphone you could very well be reading this on right now has more computing power than anything NASA had during the Apollo program when the first humans were sent to the moon.

It’s unsurprising that industries like coal are automating or becoming obsolete as greener technology advances, but President Trump lied to the coal miners in Appalachia. He lied to them when he told them he’d bring their coal jobs back because he can’t. Natural gas and renewable energy technology are better, cheaper, and cleaner. The men and women losing those jobs are largely going to need to do what people like Bill O’Reilly and Tomi Lahren love to tell my generation to do when we complain about the job market we inherited: learn a new skill; hit the pavement; find a new job. The difference between Bill and Tomi and myself is that I want social programs in place to help them do that. Programs to help them go back to school or find a new apprenticeship. Programs to help them find new work. Programs like the Appalachian Regional Commission, or ARC. ARC has been working to reduce the number of people living in poverty from Mississippi to New York for decades. They research and fund programs that work to educate people and help them find careers. Their work has helped over 100,000 people, and one of their current areas of focus is programs that help ex-coal industry workers learn to code and find work in software development. This is the type of thing President Trump should love. He promised to get coal country back to work and ARC is literally doing that across a stretch of 11 American states, 9 of which went to Trump in the election, but that sadly isn’t the case. The budget proposal that the white house sent to congress for 2018 included eliminating ARC completely, betraying his supporters in West Virginia, Kentucky, Alabama, and the rest of Appalachia who put him in the white house.

Getting a college education is hard. It’s far harder today than it has been historically. When I was going to college, my parents couldn’t afford to help me out; I had to pay for everything on my own. Rent, food, tuition, books, etc., all came out of my own pocket. I worked multiple jobs, and put in a minimum of 35 hours a week across them every week. That was on top of the roughly 36-48 hours each week that school was supposed to take up based on my credit load. I had semesters where my classes started by 9am and I wouldn’t get home from work or studying until after 11pm on most weekdays, and I’d work more on the weekends. I still graduated with almost $40,000 in debt. I didn’t see a dentist or visit a doctor in over 4 years because paying for insurance wasn’t an option while I was in school. I’ve lived that struggle, and I was terrified of getting really sick or having an accident and needing to stay in the hospital because it would have bankrupted me and I’d likely have had to drop out of school afterwards.

I had to put my future above my present at the very real risk of having neither. I don’t want to ask my children, or yours, to do the same.

I believe there is a need for education reform, and I understand that not everyone needs to go to college, though it seems to be a lot more important than it was in prior generations. My employer hires a lot of people; it’s pretty common for more than 100 people to start in any given month. I’ve been involved in the recruiting process and we don’t even consider people without a bachelor’s degree for almost every position, even ones that don’t require a specific area of study. The reasoning I’ve been told for that is having the degree proves you’re dedicated, responsible, and hard working, and we are nowhere near the only company that puts that level of stock in the degree. Our society already pays for the first 13 years of a person’s education. With the importance of a degree rising as it is, why is it so outrageous to suggest that we tack on another 4 years for people with good grades and the drive to continue and pursue a job that requires it? How many great doctors have we lost because the prospect of finishing school with literally hundreds of thousands of dollars in student loan debt kept them from trying? And as I said, not everyone needs to do the 4-year route. I have plenty of friends and family members that went through a one or two year degree or certificate program at a community college and are doing just fine now, so lets fund that year or two for the people that are interested in pursuing something along those lines. I also love the idea of huge tax breaks for businesses that hire apprentices in industries where that’s all that’s necessary for someone to strike out on their own afterwards.

My progressive ideals are focused on a single goal: create the healthiest, happiest, most intelligent society that we possibly can. The future of the human race will almost certainly depend on it in any number of ways. Our government is supposed to be us. It’s supposed to be one of the people, by the people, for the people. Our taxation paradigm, and the programs we choose to spend those tax dollars on, should reflect that. The goal of a tax system should be to make society better — to make us better. One might even say my goal is to make America greater than it is today.

Thanks for stopping by,

-Malcolm

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