Strengthening Constitutional Self-Government

No Left Turns


The importance of taxes

On this April 15, I cite the wisdom of Oliver Wendell Holmes, Jr.: "Taxes are the price we pay for a civilized society."  Two thoughts on this:

1) In defending the forced sterilization of the "feeble-minded," Holmes also said that "[t]hree generations of imbeciles are enough," so who the hell cares what he thinks?

2) I'd be happy to pay a sufficient amount in taxes to support a federal government of the size and scope that existed in 1904, when Holmes made that quote.  I suspect that, in terms of actual civilization, we're not getting much bang for our buck these days.  

Categories > Progressivism

Discussions - 6 Comments

That depends on who you are. Much noted lately, 47% of the population does not pay income tax. They get plenty of bang for their non-buck. Wealth transfers are democratically popular; perhaps Holmes is correct and the rest of us are paying to keep a civilized peace.

Amen to all that. I've often mused on what exactly I get for my money. Other than defense (and other basics of government, like the legal system), not a great deal. All the important social goods in my life (such as the highway system) have other taxes attached to them. My income taxes? No, not much bang for the buck.

Too much has been made of that income tax figure that you're talking about, Kate. At no time before World War II did anything close to a majority of the population pay income tax. In fact, as a result of the Harding and Coolidge tax cuts, by 1927 only 2 percent of the U.S. population did so. But of course, there are all sorts of other taxes that everyone had to pay, and which they still have to pay today.

That may all be true, John . . . but, even so, don't you think that it is a useful heuristic device. Most people do assume that they pay income taxes because they see a portion of their paychecks being withheld--even though most of it is going to Medicare and SS (which, "in theory," they may get back). And, of course, they file their "taxes"--even if this only means getting money back (and, in some cases, much more money than you put in). It's about perception. When people hear this figure, they are shocked by it. It makes them think about taxation as it relates to justice and think about it in a new light.

Dredging up Buck v. Bell for a beating? According to my con law text it was latter discovered that she was actually of average intelligence, but for some reason Wiki won't let me change/challange a line that some smart ass inserted to the effect that she was an avid reader of coloring books.(apparently I don't have evidence that she didn't enjoy coloring books so I can't delete the modifier that puts a whole new spin on the article.)

I agree with Kate(or John replying to John), that is a usefull heuristic device and I am running with it as a rebutal in debates. Not sure what the import of the historical record is when argueing a point about skin in the game or "standing". At the same time in an environment where jobs are scarcer they seem to be less of a burden than a blessing and most folks want to get to being in the top 53% at the least.

Obama has the conversation by Buffet printed in the audacity of hope and oft repeated that he pays less in taxes proportionally than his secretary, but Buffet appart from giving massive amounts to charity is unlikely to subsitute these with giving a check to the fed. gov. By the same token even folks who pay no federal taxes aren't about to cut a check to the gov even if they do agree that the tax burden on the top seems disproportionate....

On the other hand I am not sure I like the proposals for a fairtax either(national sales tax).

The nature of our government has changed since the institution of the income tax. When people call the income tax a progressive tax I think that ought to be spelled with a capital "P", as the point of it really was in keeping with Progressive ideals. John's response up there made me wonder what proportion of income was paid towards taxes by the average man prior to the income tax?

I found this for modern data:

"The top-earning 25 percent of taxpayers (AGI over $66,532) earned 68.7 percent of the nation's income, but they paid more than four out of every five dollars collected by the federal income tax (86.6 percent). The top 1 percent of taxpayers (AGI over $410,096) earned approximately 22.8 percent of the nation's income (as defined by AGI), yet paid 40.4 percent of all federal income taxes. That means the top 1 percent of tax returns paid more in federal individual income taxes than the bottom 95 percent of tax returns."

That does not really answer my question about total taxes from all levels of government as a percentage of income (marginal tax rates). It does mean that the income tax is still primarily a wealth tax. It also means that more of us are wealthy (at least in terms of income) than once was true if 53% of us are now paying income tax. I love America.

However, it reminds me of when President Clinton wanted to raise taxes on the wealthy and our family (with a shabby house overflowing with kids, driving used cars and struggling to pay our taxes already) fell into the "Wealthy" category because my husband was self-employed. A good portion of what he earned went into making it possible for him to earn money at all, but not all of that expense was tax-deductible. That he was not a particularly profitable business was not the government's problem; it was mine. The only difference between me and the little old woman who lived in the shoe was that I was not yet old. I looked at my husband over the newspaper and asked if I could take the kids to the dentist since we were wealthy and by the way the oldest one needs orthodontia. He laughed at me. Then I tried to laugh at Bill Clinton, but his characterization of us as the stinking rich just was not funny.

This was interesting: about the different kinds of state taxes that people, though it only goes to the county level to consider property taxes. There additional local taxes not accounted for.

I find this: wherein Alan Reynolds says "Depending on deductions, a taxpayer might pay a relatively modest average tax on total earnings, yet nonetheless face a 28–35 percent marginal tax on any activities that could push income higher—such as extra effort, education, entrepreneurship, or investment. "

Average tax rates and marginal tax rates vary according to locale. Perhaps that is why I cannot find a nice compact chart telling me what I want to know. My initial comment was not really to say that everyone should pay income tax. We could limit that tax to the top ten percent of earners and not really cut federal revenues all that much.

I was suggesting that the wealthy (the true wealthy, not me) pay their income taxes in order to pay off the low-income masses. It's like protection money extorted by our Congress. Consider that if a wealthy individual or a corporation is known to have "evaded" income tax, through shelters or even business losses, they are excoriated in the press. They are not paying what they ought to keep the government spending on social programs like welfare and all sorts of other programs that "take care of the poor" chugging along. They owe us -- well, not me, but everyone who is now dependent on federal government for some kind of assistance.

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