Who Pays?

Election time, contrary to common wisdom, can be a useful time to evaluate who we are. Most of us are ready to gag and barf at the candidates throwing themselves and their egos at us. But if we get past the personalities, there are some issues at stake that involve all of us.

John Marshall, first Chief Justice of the Supreme Court, gave us a useful axiom in the course of rendering a decision in 1819. Marshall wrote that “the power to tax is the power to destroy,” and captured in that one signal frame a huge truth in the making of civic life in this country, or any country for that matter

One might rephrase that a bit to “to tax is to govern,” which I’m sure is probably also axiomatic. Think about it. If we didn’t have taxes, we couldn’t have government.

Taxing goes far back into the early history of the world. In Matthew 22:17-21, the Pharisees asked Jesus a question: “Tell us then, what is your opinion? Is it right to pay taxes to Caesar or not?”

Jesus asked them to show him the coin used for paying the tax. So someone pulled a denarius out of his purse.

“Whose portrait is this? And whose inscription?” Jesus asked them.

“Caesar’s,” they replied. Then He said to them, “Give to Caesar what is Caesar’s, and to God what is God’s.”

So there. Government has the right to collect taxes. The two big questions are, of course, how much, and how does the government use our taxes?

If you were to strip all the hype, insults, strutting, bragging, accusations, finger-pointing and all the other theatrics accompanying this year’s presidential election, you might come down to money. What wants more of your money, and what for? Some want to rebuild the military. Others want to pay for tuition for all college students. Others want universal health care guaranteed and paid for by the government. Everyone wants to change the way taxes are structured. Some want an equal percentage, let’s say nine percent, deducted from everyone’s earnings or paycheck, no exceptions. Others want to eliminate income taxes altogether and have a sales tax. Everyone says their plan is fairer, more equitable, and more efficient. Some would tax the rich more heavily, and give the poor a tax break, or not pay any taxes at all.

We are, in fact, all over the board in taxes. In some countries with socialist regimes, like Venezuela today, the government has almost driven the national economy into bankruptcy with huge government expenditures on the historically poor and lower classes. Everyone has low taxes, but there are huge shortages, empty grocery shelves, and the country is close to revolution.

In Sweden, on the other hand, with one of the highest personal income taxes in the world, the Swedes are generally happy, trusting that their taxes come back to them in services.

So, the question becomes, in our country at any rate, do we want to preserve a system—capitalism—that expects its economy to grow and prosper based on a generally low level of taxation and the high productivity of the individual with liberty and freedom to invest his time, his talents, his money the way she wants? Or do we want to turn to socialism where the major driver of the economy and politics is the government, hopefully—from the Bernie Sanders point of view—creating something between Venezuela and Sweden. There are lots of other examples, but that will do for the moment.

There are no simple answers. The object, overall, is not to kill the goose that lays the golden egg. Our market, free enterprise economy is the most successful in the world. Even fairly tightly run Communist countries, like China, allow and encourage free enterprise, while attempting to continue controlling politics through the Communist party. The people of Cuba, under almost sixty years of Fidel Castro, are desperate to throw off the chains of a socialist system where the government owned and ran everything. They hardly needed to tax.

My prejudice is to have a system in place where everyone works to earn a living, and there is only a minimal expectation of what government should be doing for you.

Published in The Tuscaloosa News as Raising Taxes Means More Government Sunday June 12, 2016