But the debate about the tax policy changes has been more significant than personal spending money.
I’ve heard compelling arguments on multiple sides of the tax issue. But some of those arguments are simply so bad as to be, well, taxing the patience of rational thinkers.
One strand of argument comes from a hatred of wealthy individuals or corporations, or an assumption of bad deed or motive on the part of those with lots of money. I’ve seen the meme “tax the greedy not the needy” — which, albeit a clever rhyme, succeeds only in crafting a heroic couplet of two fallacious arguments.
For one thing, people are not greedy simply for possessing a large chunk of cash. Some might be, but most obtained wealth honestly, through hard work and pursuing an innovative idea. They provide employment, and I have seen numerous times tremendous and humble generosity from wealthy donors and philanthropists. This is far from greed. And, by the way, these people pay a phenomenal amount of taxes, far more than the needy.
A Pew Research Center analysis of IRS data from 2015, the most recent available, shows that taxpayers with incomes of $200,000 or more paid well over half (58.8 percent) of federal income taxes, though they accounted for only 4.5 percent of all returns filed. By contrast, taxpayers with incomes below $30,000 filed nearly 44 percent of all returns but paid just 1.4 percent of all federal income tax — in fact, two-thirds of the nearly 66 million returns filed by people in that lowest income tier owed no tax at all.
So, those advocating those they assume to be greedy be taxed should know they already are. And the needy already pay little or no income tax.
Another bad argument has to do with an unfounded hatred of corporations. Again, some corporations are shady and work to avoid taxes. But most do not, and persist in providing what economists call “positive externalities” — providing employment, useful products and services, and considerable federal to local tax revenue. Lowering the corporate rate to be on par with other nations is both fair and practical. Already we’re seeing more corporate money returning to and benefiting employees, consumers and the macro economy.
I’ve also seen some argue “what would Jesus do?” with regard to tax policy. This is problematic for two reasons. One, I didn’t see it in context as a referent deferral to divine wisdom, but more as a pedestrian rhetorical device to bolster the vague “care for the needy” emotion espoused in the bad tax arguments above.
Secondly, with regard to taxes, Jesus said little. The only time he spoke directly of taxes, he said, “Render under Caesar what is Caesar’s.” He said it to humble fishermen. His point was not to affirm a particular tax policy, but to distinguish between mere earthly rulers and the Kingdom of Heaven.
With regard to the rich, Jesus noted it is harder for a rich man to enter heaven than for a camel to pass through the eye of a needle, and he cautioned a rich man to sell everything and follow him. But there is also the parable of the talents, in which those who work and invest and increase their holdings are praised, but one who does nothing with what he has been trusted to him is chastised. Alternately, he praised the widow who gave what little she had at the temple.
So, I don’t think Jesus would advocate soaking the rich with taxes. He would probably say we should obey the government’s policy, whatever it is, and he would judge people’s hearts and not their tax return.
Lost in all of this debate is the consideration of why the government needs the money. To be sure, they do. But how much, and for what exactly? I looked at the list of federal agencies on USA.gov and was stunned by the number of them. None that I can see offered an annual report showing how much they received, what they spent it on, what they actually accomplished for citizens. Corporations do this — why not the government?
In some ways, tax policy reminds me of the famous bank robber John Dillinger of the Depression era. When asked why he robbed banks, he famously replied, “Because that’s where the money is.” It seems sometimes our tax policy taxes based on where the money is, rather than fairness, efficiency and demonstrated need. This is how we have personal income tax, corporate tax, sales tax, gas tax and all manner of taxes disguised as “fees.” Any discussion of taxes should be matched with a discussion of federal spending.
In the end, I think the new tax policy goes in the right direction, but some criticisms remain valid. We could go further by eliminating loopholes and certain deductions, especially those only accessible to the very wealthy and corporations. With lower, progressive rates, coupled with fewer itemized and complicated deductions, there would be more transparency, and paradoxically, revenue.
Nevertheless, our debates about tax policy will for sure continue and our tax policy will forever change. As Benjamin Franklin is said to have commented, “The only thing certain is death and taxes.”
A collection of columns by Tim Penning, Ph.D., is in the book “Thoughts on Thursdays,” available at The Bookman.