Originally published on by Herald and News

Doug Matheson: Taxes not good or bad, just necessary and responsible

At tax time this year, with the last-minute budget wrangling and state and national deficit problems, there’s even more than the usual reason to consider taxes. Unfortunately, we’re still a long way from addressing them realistically, honestly, responsibly, and urgently.

Let’s start by acknowledging one reality. Most people seem to think their vote carries a magic wand quality – they can vote for high government services (a forever superior military, unlimited Medicare, quality infrastructure, schools, and public safety, etc.), and vote for low taxes, and voila … you get them. Fortunately states can’t borrow to make up the difference so our struggle with those incompatible expectations is immediate. Still, many seem genuinely frustrated by the realities of services being cut because we’re unwilling to pay for them.

At the national level, our resorting to borrowing to fill the gap between what we expect and what we’re willing to pay for has been growing steadily since about 1980. The recent compromise between Democrats and Republicans that resulted in trimming $38 billion from one year’s budget is, forgive us, almost a joke. We can’t pat each other on the back for ever-so-slightly reducing the rate at which we’re digging our national hole deeper.

Please, what makes us think we have a right to spend to maintain our quality of life, but refuse to pay for it ourselves? Really! If we just stick with our current habits, we’re passing a giant credit card bill down to our grand or great-grandchildren. Is that conscionable?

Assuming we finally understand that we can’t keep doing this, how do we actually change our habits? The proposed solution in many states, and coming from the Republican wing nationally, is “cut spending, cut services.” That does need to be part of the solution, but it can’t be the only part.

Many have heard Paul Ryan’s more radical proposals to cut national spending. For a politician, he is certainly showing guts to offer major changes to Medicare, a program prized and protected by the most faithfully voting group. Overall, his numbers go well beyond joking. Unfortunately though, his proposals aren’t half broad enough.

Is there some good reason we can’t significantly cut back on spending seven times more than any other nation on defense? Rep. Ryan seems willing to ask for sacrifice from regular citizens … but not from the military industrial complex.

Further, is there some good reason we can’t step up to the plate and raise tax revenue? Many are aware that numerous giant corporations (GE, Bank of America, ExxonMobil, Citigroup, and more) paid a big zero in taxes last year … after making billions. Check out USUncut.org. No, we don’t want to overtax corporations; they are a reality in our nation, but if they want to play here, they should pay here and not use deceptive bookkeeping to offshore their profits. If we insist, the loopholes could be closed, but it’s going to require guts to break the golden rule (he who has the gold makes the rules). If we want to put some pressure on corporate practices, let’s change where we spend and keep our personal money.

Capital gains tax

One more major change involves changing capital-gains tax. Billionaire Warren Buffet has pointed out the absurdity of his paying a lower tax rate than his receptionist. Current tax code allows the wealthiest (those who have enough money to make their living off of investing their money) to pay a maximum tax of 15 percent on the profits they make. Those of us with “jobs,” from the burger flipper to the plastic surgeon, pay at rates that can easily double that of the wealthy investor.

There are wealthy people who speak out about their responsibility, and their privilege, to do more to close the deficit gap; check out wealthforcommongood.org and businessforsharedprosperity.org. Understandably, they want the tax code changed so they are not the only ones among the wealthy who put their shoulders to the plow and make a difference.

Consider one long-term consequence of our perpetual expectation of low taxes. We aren’t producing enough doctors, nurses, and engineers of numerous types to meet our own national needs so we brain-drain other places and issue green cards to import them. Why aren’t we producing more of these? Many well-qualified applicants don’t get accepted to these specialty programs and universities. Why? Because building, developing, and running such aspects of our national infrastructure costs real money … and we haven’t been willing to pay up.

Taxes aren’t good or bad; they’re just necessary and the responsible thing.