Taxes, tea and tyranny

This past week across the country, several “Tea Party” protests took place. Naturally, much of the media coverage of these protests focused on taxes, and for seemingly good reasons: the rally in DC was billed as the “Tax Day Tea Party”, one prominent event had a huge banner on-stage that said “Tax Revolt”, several Taxpayer advocacy groups were among the organizers / sponsors, and many of the speeches at the events focused or touched on the topic of taxes.

But the media attempted to paint the picture that the focus of the protesters’ ire is “Obama’s” taxes – presented as last year’s taxes (paid this year) – and that’s where things get a little tricky.

Now, it is true that a) Tea Party protesters don’t like Obama’s policies and his ideologies and b) as economic conservatives, they generally believe taxes should be lower.

However, the media seems intent to link those two elements in a simplistic, finite way. Basically, their goal seemed to be to point out that taxes have not gone up under Obama, and that, in fact, individual’s taxes for 2009 were relatively low. Most news outlets attempted to do this in more traditional journalistic ways. On her MSNBC show on the 15th, Rachel Maddow, of course, couldn’t help herself to smarmily beat her audience over the head with it: she sarcastically characterized the Tea Partiers’ general complaint as “President Obama and those commie Democrats in Congress have raised taxes sooooo much. Since they took over, taxes have just gone through the roof.”, and then going on to describe in detail how, in 2009, taxes “under Obama” were cut or historically low.

In either case, the not-so-subtle implication is that Tea Party protesters and their supporters are either misinformed, untruthful (in a politically or even racially motivated way), or just plain stupid.

The problem is, it’s a straw-man argument. X is true, so y necessarily follows. Only x is what’s not really up for debate.

For one, a recent poll of Tea Party protesters and supporters showed that many believe they currently pay a fair amount of taxes  (currently being the key word). What the poll also showed is that many have a problem with the way their taxes are spent, specifically, they feel that an unacceptable portion of the taxes are spent in a wasteful manner.

It’s not that the Tea Party and those of the same ilk have a problem with their 2009-2010 tax returns. I didn’t hear one sound bite from anyone giving a speech or being interviewed last week say that in this last fiscal year, the taxes they paid went “through the roof”. What they have a problem with is how the decisions of yesterday and today will virtually certainly impact their taxes in years to come.

As the media points out, the tax cuts in Obama’s stimulus are what created this past fiscal year’s relatively lower taxes this year. But the Tea Party was against the stimulus from the beginning, because they saw through it as one of Obama’s short-term, politically-motivated fixes to a long-term problem. Sure, taxes are lower today. The price of that is, by including billions of otherwise unfunded dollars to a bill (in that case, the stimulus), taxes will necessarily need to go up tomorrow.

The vast majority of Americans, no matter what their political bent, have no problem at all with paying a legitimate, fair amount in taxes. But it’s an issue that rightly should face unending scrutiny, because it may be the single most important element of the government-citizen relationship in our country. As the existence of today’s Tea Party movement reminds us, it was the very issue of taxation that in many ways directly lead to the American Revolution: “No taxation without representation” was the colonists’ rallying cry. In the Declaration of Independence, King George was, among other things, proven to be a tyrant “For imposing Taxes on us without our Consent”.

And after all, it is now as it was then: since the government should be by, of and for the people, the very granting of the power to garnish a portion of one’s wages, the very fruit of one’s labor, to the government comes with an inherent caveat – the money better be spent wisely.

What the Tea Party (and every economic conservative) is looking at is the myriad ways they feel their (and future generations) tax dollars will have to be spent, based on recent policies (nearly all of which originated with the Democrats or under Obama/Pelosi recently). They are rightly concluding that taxes will be increased and/or mis-spent in the future, considering that:

– 47% of American households pay no federal income taxes. Despite how the New York Times tries to spin that, that’s a disturbing, unsettling fact on it’s own.

– State and local taxes are already high in some places, and forecast to explode nearly everywhere – mostly due Federal policies. States are going broke primarily because of unsustainable Medicare and Medicaid mandates. The only way for them to recoup those costs is through taxing the public – or get bailed out by the Federal government (either way, it’s the taxpayer’s dime).

– Corporations pay a large portion of the nation’s total tax bill. Do small businesses fall into the same “wealthy” category as that of huge multi-nationals and wealthy individuals, having to pay into the same top tax bracket? If it’s true, as I hear all the time, that “small businesses are the engine of our economy”, then shouldn’t they get extra breaks (and not just in short-term stimulus bills, but annually by law for the long-term)? Most people in the work force understand that, large or small, the more money their company has to pay the government, the less money there is for them to hire new workers or give them a raise. And when it comes to the economy, isn’t it all about jobs?

– New spending legislation recently passed (healthcare reform) or in the hopper (cap-and-trade) costing undisputed trillions of dollars we know we don’t have. Again, there’s only one source to pay these bills when they come due down the road.

– Social Security is broken. When it was instituted back in FDR’s days, people lived an average of 63 years. Social Security kicked in at 65. At the time, there were about 40 workers paying Social Security taxes for every 1 retired person. Today, people are living on average past 65, and the ratio of workers to retired people is nearly 2:1. Once all the baby boomers retire, and medical advances keep them alive longer, that ratio will be less than 1:1 on the workers side. The Social Security trust fund is forecast to run into the negative in the next 30 years or so. It’s simply an unsustainable system unless taxes to keep it afloat go up.

– About a week or so ago, Paul Volcker, the head of President Obama’s Economic Recovery Advisory Board, characterized the idea of instituting a European-style Value-Added Tax (VAT) as “not as toxic an idea” as was presumably once thought. The VAT tax is a tax on production and consumption – it generates a tax on a good or service at every stage of its life cycle, from production through consumption.

This CBS News article on the VAT disgustingly sums up the case for a VAT, and increases in taxes in general as such:

Americans as a whole did not squawk when spending rose during the Bush administration, and in electing Barack Obama, they voted for bigger government. At some point, the politics we have voted for have to be paid for. A VAT is likely to be part of the answer.

Ahh, right. Everyone who voted for Obama was knowingly voting for more taxes. So the spin is now, “C’mon, he told us things were going to change, you knew what that meant.” Unreal.

Taxation without representation was tyrannical. But just as wrong is its evil cousin, tyranny disguised in sheep’s clothing: taxation with misrepresentation.