Years ago, I saw that word in a George Will column and was intrigued; “what does THAT mean??” I found the answer using a fairly simple exercise; I consulted a dictionary: “to widen in scope, increase in size or intensity”. These days, I have my Dictionary app handy whenever a word stumps me. When that doesn’t work, I simply go to the website itself.
In a sign that our stagnating educational outcomes of recent decades might start at the top, those who shape & influence our public policy in government and the media seem too often to be grammatically-challenged. In few places does this manifest itself more than in discussing & debating tax policy.
“The rich are now paying their fair share in taxes.”
“Across-the-board income tax cuts would benefit the wealthy disproportionately.”
The U.S. has a progressive income tax structure, with seven rates ranging from 10% to 39.6%; the more you earn in wages & salary, the greater the percentage you pay in taxes. As a result, one-fifth of American households pay roughly two-thirds of federal income taxes. We’re already in ‘disproportionate’ territory. Logic dictates therefore, that those who pay more would experience a greater absolute ‘benefit’ from an ‘across-the-board’ cut in income taxes. Although one might say that ‘benefitting’ from Uncle Sam taking less of our earnings is akin to ‘benefitting’ from him spying on us less.
Moreover, the concept of ‘across-the-board’ income tax cuts is itself erroneous when almost half of all Americans pay no net income tax (either they have no taxable income, or it’s cancelled out by all the deductions, exemptions, credits & other loopholes). It’d be more accurate to say ‘halfway-across-the-board’, though that admittedly doesn’t roll off the tongue as smoothly.
“The border adjustment tax … is needed to help pay for a steep cut in corporate and income taxes.”
“… costs a great deal of revenue …”
“I just don’t see how we can afford these tax cuts.”
Taxpayers ‘can afford’ to fund the National Institute of Health’s study of tobacco use in Russia, the National Park Services research into how bugs respond to lights, and the National Science Foundation’s $1.6 million project programming robots to dress senior citizens and see how well it works in their dating life (all info courtesy of Oklahoma Senator James Lankford’s “Federal Fumbles” report) … but we have to find a way to ‘pay’ for the ‘revenue’ forgone when we forcibly extract (by threat of imprisonment) less from productive citizens??
The poor essentially subsidize the rich via the National Endowment Of The Arts, but it ‘costs’ Uncle Sam to withhold less from our paychecks? In a world of seemingly infinite television channels, tax dollars support PBS, but we have to find a way to ‘pay’ to be taxed less? The federal government spends $70 billion yearly on the department of education (constitutionally a state responsibility), but our elected representatives don’t think we ‘can afford’ to allow graduates to realize the full rewards of the skills/intellectual capital they gained??
“Tax cuts pay for themselves.”
Indulging the notion for argument’s sake, it’s hard to tell for sure whether or not tax cuts ‘pay for themselves’. The Congressional Budget Office doesn’t even try, preferring the use of static scoring to predict the effects; a tax cut of $1 necessarily means a loss of revenue for Uncle Sam of $1.
However, it’s probably safe to say that the vast majority of us do not take any increased disposable income and simply stuff it under the proverbial mattress. And by virtue of that fact alone, it contributes to increased economic activity no matter what we do with it. Many of us may go shopping (we are Americans after all; we buy so much ‘stuff’ we have to rent storage in which to put said ‘stuff’). My uncle stuffed most all his lifetime raises into savings, which banks typically turn around & lend to those who have a more immediate use for it. And then there are folks like a couple friends of mine.
In the last couple years, they have branched out, either expanding an existing business to another location, or opening another different business altogether. That requires buying capital equipment, wiring a new building for electricity, water & the like, and hiring new staff. That new staff will pay some income taxes (not to mention payroll & sales taxes). If they left another job, it’s possible they were lured away by higher pay. And the jobs they left vacant maybe had to be filled.
It’s activities like those that have historically produced greater revenues in the wake of income tax cuts than the CBO originally predicted.
“Tax cuts cause deficits”
When a person’s income declines (as has happened to many in my industry in the last few years), his credit card balance doesn’t automatically increase as a result. It increases only if he doesn’t reduce his level of credit expenditures.
It’s spending that ‘causes deficits’; not lower tax rates.
“Tax cuts” vs. “tax reform”.
These are not the same thing.
The former now seems to require the use of budget reconciliation in the Senate to get around the sixty-votes necessary to invoke cloture (i.e. breaking a filibuster), and pass with a simple majority. The problem is that the tax rates must revert to their former levels in ten years should deficits increase (see ‘tax cuts cause deficits’ above) over that time, thereby introducing impediments to peoples’ & entities’ long-term planning.
The latter on the other hand, would require all sides to marshal up a filibuster-proof majority who could resist the urge of social engineering via the tax code and agree on one rate that would apply equally to all citizens (something that might even be a challenge in the House, where few hurdles to a majority vote exist).
The former can be used to bestow favoritism on this demographic or that, while the latter takes political courage to eliminate such benefits that arguably shouldn’t have been conferred in the first place.
The former has therefore turned into political red-meat, something on which to campaign nearly every congressional cycle, while a comprehensive, ideal version of the latter would strip busy-bodies of something ‘to do’, allowing us to shift our collective attention to real issues.
On one side opposing true ‘tax reform’ you have folks like ‘conservative’ talk show host Hugh Hewitt, who recently wrote in The Wall Street Journal that “Generations of Americans have relied on (mortgage interest, charitable contribution and state taxes) deductions in making enormously consequential decisions(.)” In an unscientific poll of my friends, I found that little (though not totally zero) attention is paid to the charitable deduction in that vein. Same goes for the mortgage deduction. As my wife & I near closing on a house, that consideration never came up.
On another side of opposition you have the likes of former presidential candidate Bernie Sanders, who doesn’t think ‘the rich’ pay enough in taxes. One of the first & most regular things I tell all my classes is to see things from the supply side. ‘The rich’ that are invariably in these crosshairs aren’t always the mansion-dwelling, sports-car-driving, private-jet-owning people we see on T.V. They are just as likely to be my students’ employers. “We’re all demanders” I tell them; we already know how prices & incentives work on us. For every extra dollar their managers have to pay in taxes or tax-preparation however, they’re that much closer to hiring one less employee.
“Taxes are the price we pay to live in a civilized society.”
This quote is attributed to an opinion rendered by Supreme Court Justice Oliver Wendell Holmes, Jr. in a 1927 court case about business insurance premiums in the Philippines, which was a U.S. territory at the time. Before it was bandied about as a rationalization for the size of our government (by some who don’t even pay net income taxes; see above), ‘civilized society’ had a simpler meaning: to protect the private property that fosters widespread prosperity; to provide a police force & court system to take the place of duels in settling disputes; to carry out a democracy & setting up a government.
Is it really ‘civilized’ for someone to commandeer the earnings of her neighbor to pay for her pet project, when what the coerced is really paying for is her requisitioner’s haughtiness & lack of initiative?
Part of effective communication is ensuring the message gets across. It’s a fine line between being understood, and using the most accurate, appropriate word possible. I feel it’s my duty as an educator to talk UP to people. Even though our (elected) leaders are primarily an extension of us, they should rise above the heated fray & carry out the best, fairest public policy. A good start in conveying what that might be is using accurate, objective terminology.
Last year one of my friends posted on Facebook “I fear there is too much eleutherophobia in our society today.” When I looked up ‘eleutherophobia’, I discovered that it’s an ancient Greek term for a “fear of freedom”. I countered with “you could add epistemophobia & hypengiaphobia to the mix.”
Don’t know what those words mean?? Prove me wrong & look ‘em up.