There is a lot of talk about cutting taxes. Why cut them? Why not eliminate them altogether? Is there a floor below which people would cease asking for tax cuts? Most likely not.
Taxes are universally hated. We all hate them. Even the wise king Solomon’s subjects resented the taxes he levied. “Thy father made our yoke grievous: now therefore make thou the grievous service of thy father, and his heavy yoke he put upon us, lighter, and we shall serve thee.” (1 Kings 12:4). Could Solomon have built the temple without the ‘grievous’ taxes?
We all call ourselves ‘taxpayers’ conveniently forgetting that we all are ‘benefit receivers’ as well.
Who invented taxes and why?
If there were a profitable activity, some one or the other would start a business to pursue it. But, there are many unprofitable tasks that must be performed. These can be paid for through user fees or taxes. If it were possible to assign costs to individuals or families, the former would work.
Taxes are levied to fund the activities benefiting so many people to such variable extents that the value of the benefit accruing to each individual person or family cannot be ascertained. Such activities cannot be funded through ‘User Fees’. Being so, it is improper to argue that a particular person, family, city or state is not getting its ‘fair share’ from the taxes it pays to a higher jurisdiction.
We expect our township, county, state or the federal government to perform increasingly large variety of functions. As soon as an untoward event with even a small probability of recurrence happens, we demand the appropriate jurisdiction to pass laws to prevent or regulate that type of event. For example, Megan’s Law, laws against selling alcoholic drinks to youngsters, laws against drunk driving etc. were passed in response to popular demands and rightly so. It is practically impossible to exempt people without kids from sharing the expenses of administering Megan’s Law. Similarly, we all have to pay for the cost of implementing all the laws regardless of whether a particular one benefits us individually or not.
Once we demand and have such laws enacted, their implementation requires funding that cannot be met with from ‘User Fees’. Tax moneys must be spent. As we keep adding laws after laws, taxes must be raised. Therefore our incessant demands to cut the taxes are unrealistic at their best and immoral at their worst.
Taxes cannot be reduced until and unless we take a really hard look at all the laws, rules and regulations to repeal those that are not necessary. Just one case in point; we make our townships require that our neighbors maintain their properties to certain high standards so that, if at all we decide a few years later to sell our house, we can get a good price. This is an unnecessary burden on the townships and can be easily dispensed with. We can settle this with our neighbors through direct personal interaction. We do not like the governmental bodies to interfere with our personal lives but do insist that they pass laws interfering with other peoples’ lives. Is not that hypocritical?
Deaths of a few pets have generated demands for extensive and effective inspections of pet foods. Likewise have demands for more stringent regulation of all sorts of humans’ foods such as spinach, seafood etc. All these do not come cheap. Where else are the money going to come from but taxes?
We must realize that our lives are getting increasingly complex with time needing more laws causing greater governmental expenses leading to higher taxes. For example, only during the last decade has arisen the need to protect children from pedophile predators on the Internet. So has the need to prevent student rip-off by the student loan industry. Should only parent(s) of vulnerable age kids pay the incremental taxes? If yes, how can we manage it? If no, why complain about higher taxes caused by these genuine needs?
Elimination of waste and corruption from the public bodies can reduce our tax ‘burden’. But, if we try to do a perfect job, so many inspector generals and attorney generals with supporting staff would be needed that the process itself may raise our taxes. In fact, the need to keep detailed records to prove the guilt or innocence of public employees does add to the costs of public administrations.
While comparing the taxes levied by different jurisdictions, we must also compare the demands imposed on those jurisdictions by its residents. Some jurisdictions pay higher taxes because their residents hold their governments to higher standards and vice versa.
Our total tax bill can be reduced marginally only if at all it can be reduced. What we do not pay the federal government we must pay the state government. What we do not pay the state government we must pay the township. There is therefore no point in complaining about property taxes.
As regards property taxes, there is another factor to be considered. If a child were to be enrolled in a private school, the tuition must be paid every month for the twelve years. By educating the child at public schools, the tuition is spread out over a much longer duration. This makes it easier for the parent(s) to pay for the tuition. If we were to replace all public education with private one, how many parent(s) will be able to pay?
Then there is the argument that lower business taxes generate more business and jobs. How low should the taxes go? Will the businesses ever stop complaining about ‘high’ taxes? Is it better to have a low gross profit and pay less tax or have a much higher gross profit and pay a little higher tax?
One fact is unavoidable. The rich will always lower their taxes by getting the legislature to inclde loop holes in the tax code. The poor do not have the capacity to pay. The only group that cannot avoid paying high taxes is the middle class.
In short, it does not behoove us to keep complaining about taxes. They have an important and useful role to play in our lives. If we would not give some money to our nation, what else would we give?