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    « The Ought of Compromise | Main | Caught in the Tea Party Maze: David Frum’s "Why Romney Lost" »
    Tuesday
    Nov202012

    Taxes: The Final Problem

     

    A couple of weeks ago I sat down to watch an episode of the latest Sherlock Holmes incarnation, a rather intriguing British production in which Holmes’ and Watson’s adventures have been updated to contemporary times.  I remained fascinated for the first fifteen minutes or so; that was how long it took me to realize that the plot seemed overly familiar. Turns out the stories are based on Conan Doyle’s originals, all of which I’ve read over the years.

    I continued to watch even as more and more of the details recalled themselves. This version might be different, after all, and I wouldn’t know until the end. Perhaps a contemporary twist would flip the story on its head, have it turn out somehow differently than I expected. But no; it was largely the same as I remembered it, though the updated setting unquestionably added an interesting veneer.

    That just about sums up how I feel right now as I watch this taxing tussle: who we should or shouldn’t, and how much, and why.  It’s all been done before, and the more important question now isn’t the plot itself, but whether the protagonists plan to struggle unendingly even as they dive headlong over Reichenbach Falls.

    The current struggle (or the previous struggle redux, if you prefer), is what to do about the Bush tax cuts, those fiscal bunions that are due to expire shortly and have us all walking on tiptoe. Obama has long argued that we should let them expire on the top tier earners while leaving them in place for everyone else. There is widespread support for this idea, with polls suggesting that as many as two-thirds of Americans are just fine with it.  The GOP, of course, generally (though not unanimously) disagrees, predicting wide-spread job losses if “job creators” are forced to pay more; Republican Representatives and Senators alike continue to stand in opposition, arms locked together like children from the 1950s playing a game of Red Rover.  Meanwhile, Dems disingenuously suggest that if the GOP would just approve the extension of cuts for the not-so-wealthy, then, hey, we can talk about that other part later on. Republicans, correctly, aren’t buying it.

    Meanwhile the marketing continues, most aimed at swaying public opinion (on the weakly plausible assumption that politicians care what we think). We hear cries that the wealthy should pay their fair share (though there’s no real consensus on what “fair” means), and swallow stories that tell of the greedy and dissolute who stomp on the world’s Twinkie-loving rank-and-file while lining their own pockets (ignoring, of course the vast amounts of non-job-creating money pulled down by more liberal communities like actors and athletes). We’re also regularly Buffettized to believe that the wealthy want to pay more (though certainly some—such as the Patriotic Millionaires—actually do). And if it’s really okay with them, then what’s the big deal?

    The counter-messaging is just as facile, resting largely on the historically inaccurate myths of job and wage destruction, and on the outright boneheaded logic that suggests that just because the revenue raised is a small (relatively speaking) amount, that it’s therefore trivial (as if small amounts collected here and there can’t add up to significant numbers).  There’s also the tried and true (trite and true?) chestnut which says that “we don’t have a revenue problem, we have a spending problem.”  Well, that’s as may be, but ignores the fact that (a) the spending problem isn’t a faucet you can just turn off, and (b) people, by and large, both like and need the government services they’re getting.

    (And, by the way, the same people who are telling us we have a spending problem are the very ones who created the spending problem to begin with, so why in hell would we trust them anyway?)

    From my vantage point all of the arguments are specious. Our friend Sherlock famously said that “The world is full of obvious things which nobody by any chance ever observes,” and it seem so in this case. We are all suffering under an incredible illusion, one that makes us believe that taxing people is what we should be talking about at all. The obvious thing which nobody “by any chance ever observes” is that even as we get closer to the falls, our conversation is suddenly absent any mention of companies and the gifts given to them by government.

    I do not believe taxes should go up on anyone right now, and by that I mean on any persons—at least not until we’ve detected all the potential sitting in corporate coffers. Consider that a Cato Institute study from earlier this year suggests that we will spend upwards of “$100 billion on corporate welfare this year.” This compares to the $45-80 billion expected to come in should the top tier Bush rates expire.  There are numerous other revenue-generating options that should be on the table as well, including the idea of a financial transaction tax (estimated to raise about $35 billion per year), and the closing of loopholes related to shifting jobs and profits overseas (perhaps raising nearly $300 billion). These were all things we were talking about not that long ago, and yet, somehow, now we’re spending most of our energy talking about taxing people. I wonder how that narrative shifted…I suspect our debates are not fully organic, that there are many constituencies out there bent on manipulation because they are perfectly happy to have us judging other people and not paying attention to entities that pay, often, even less. 

    I’m not suggesting that raising taxes on people is off the table—quite the contrary.  Nothing should be off the table. But it’s not the conversation we should be having first. It doesn’t matter to me whether Patriotic Millionaires are willing, or whether my neighbor thinks his neighbor isn’t paying a fair share. First we tax the corporations, the entities, the things. Then let’s see where we’re at and what other conversations we need to have.

    Seems elementary to me.

     

     

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    Reader Comments (1)

    You seem to have forgotten the insistence by the Right Party Opposite that corporations are people . . . .

    November 20, 2012 | Unregistered CommenterPhilip H.

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