Since it’s now the fancy third decade of the third millennium, I will offer a sacrifice at the Alter of Capitalism that is sure to bring out the Techbros, libertarians and criminals (but I repeat myself).
You may want to brace for this one.
Taxation is not theft.
There there there, Ghost of Ayn Rand, or Rand Paul, or Paul Ryan, it’ll all be okay. We know that none of you actually wanted to live the way you proposed others do, it was just an act. Sit in the back, or I’ll make you get your fuckin shine box.
Here’s the thing you need to remember that makes much more sense and is more reasonable and practical than that “Taxation is theft” nonsense that libertarians like to throw around:
“Taxes are the fee you pay to participate in a functioning society.”
It’s unbelievable to me that I have to put this in writing in third decade of the third millennium on one of the greatest (public-fund-originated) inventions ever – The Internet – in the nation that has not only become the most wealthy to ever exist, but which houses most of the wealthiest people to ever exist, who were all allowed to start earning their dragon’s horde of gold thanks to a system that had previously understood that taxes pay for many things that benefit us all.
And now, a brief commemoration of the things taxes has given us:
- Public infrastructure (roads, bridges, etc.);
- Public water/wastewater systems;
- Public landfills;
- Public parks, from local through state and national;
- Public education;
- Public social entitlements (Social Security, Medicare/Medicaid, WIC, TANF, SNAP, the GI Bill, etc.);
- Public first response;
- Public gathering spaces (city halls, community centers, etc.);
- Public defense;
- Employees to do all that work that serves to benefit the public.
There are others, of course, like diplomacy and discovery, but those words have lots of syllables and we don’t want to confuse too many people this early.
The fun part is, it’s all pretty equitable. Or at least, we had a system that was equitable until the Economic Masters figured out how to game it in their own favor and billionaires were created.
See, taxes have always been here, since the founding. The Founding Fathers pretended not to like it, and their are varying accounts of how and when they should have been applied, but for the most part it was known that if you wanted to have a functioning government Of, By and For the People, the People were going to be on the hook for paying for it.
See, their whole thing was not “No taxation,” it was “No taxation without representation.”
As time went on, things changed. Bad Actors who felt that they didn’t get to keep enough of their wealth began abusing the system – the same system that had provided them a mechanism to create that wealth in the first place.
While someday I will talk about how banksters like JP Morgan were responsible for the income tax being implemented in the United States, today is NOT THAT DAY.
Today, we talk more about equitability, and a return to the tax rates of a time when America was booming like never before (although we could return to that time if a few small adjustments were made and the scientists at CERN fired the Large Hadron Collider at the right moment).
In the 1950s, the U.S. was supreme. We’d come out on the winning side of the war and everyone at home was riding on two highs. The first was pride of victory. The second was pride of productivity and the return on investment that netted them. See, as the last major industrial power standing and the only one whose infrastructure was untouched by the horrors of war, we were not only producing most goods but we were selling them worldwide. The rest of the developed world just couldn’t do it. They’d been bombed to smithereens.
To make things better, we were also loaning other nations huge amounts of money so they could get back on their feet, and with a nudge-nudge-wink-wink telling them “Why dontcha buy American while you’re at it?”
And they did, because there were no other choices (until the 1970s).
During this time, nominal tax rates on corporations were as high as 90 percent. Now, nominal means “in name only” so that doesn’t mean those 90 percent rates were effective for most. Presidents Truman and Eisenhower – both staunch Republicans – noted that if corporations were going to make wild profits that was fine, but in the standard-keeping with their preceding generations of leaders, they also knew that corporations mush provide some public good. Commerce for the sake of commerce is not that.
If corporations were able to prove that they were investing their profits back into their workforce, into R & D, and into their communities, that 90 percent rate would come down pretty quickly, to around 50 percent. And still, this was the largest economic boom time of the nation’s history. The time of strong unions and workforce protections. The time of expanded public works projects like the Interstate Highway System and the beginning of the space race.
All because we weren’t looking at the word “taxes” like it would curse us if we said it.
But then came along global competition. And in the spirit of Americanism, along came the widespread usage of cocaine to try and keep up, and when that failed, massive layoffs.
Then the lie was inserted ever so carefully into the public consciousness: Taxes are bad, a voice whispered.
It started with Republicans like Ronald Reagan. The lie was bought so wholesale that it killed George HW Bush’s shot at re-election and gave us Bill Clinton, who oversaw a budget surplus until we got back to Bush Time, and the beginning of the $21 trillion debt.
“There is no other pill to take, so swallow the one that makes you ill.”
Do you think Rage Against the Machine was directly talking about shady government practice here, or the unholy merger of crony capitalism with public policy? Well, I’m sure some grad student somewhere is looking into it.
Now comes the beginning of the next chapter for our intrepid heroes (that’s us).
Remember how I noted earlier that in the 50s and 60s, corporate tax rates were between 50-90 percent? Those high tax rates helped do everything from expand our infrastructure to educate our kids to send us to the fuckin’ moon.
So where do we stand today?
I’m glad I made you asked that, because I’m going to fuckin’ tell you.
You see, this thing, the Internet, which was publicly financed at the beginning by defense research dollars, holds all kinds of things aside from cats, porn and libertarian memes. It also serves as a repository for massive amounts of information that in the past you would have had to call someone on the phone to get. CALL THEM! ON THE PHONE!
One such site, Quartz, can show you historic tax rates. I’m going to hop on my jump to conclusions mat and let you know where this ends: For nearly all income brackets, taxes are historically lower than at any time going back to 1943 – when we were a nation in the grips of World War II.
Elsewhere in the Great Ether, the nonpartisan and independent Tax Policy Center shows historical average federal tax rates for all households. The chart on this page shows rates by year and income quintiles. Interestingly, the only rate that’s gone up since the late 1970s that would affect most people is the average payroll tax rate. Even then, it’s only grown by a few percentage points, and this particular tax is the one that feeds entitlement programs – you know, the programs you’re entitled to, like Social Security and Medicare.
The Tax Foundation, which provided the second line graph up top, is one of the older tax-focused think tanks in the U.S., and has a whole bunch more to say on the subject, ‘natch. The Tax Foundation’s outlook is focused on taxes – not on removing them – but in creating a system of taxation that’s based on four principles of “sound tax policy”:
Interestingly, the Tax Foundation, which is nonpartisan but still has a tendency toward fiscal conservatism, (the real type, not the type that Grover Nordquists of the world espouse) offers a detailed chart showcasing how most people – individuals AND households (there’s a distinction) – saw their marginal tax rate decrease over time. For instance, a single person earning $62,000 in 1980 (the equivalent of a cool quarter million in today’s monies) would have paid a 65 percent marginal rate. Ten years later, in 1990, that person would have paid a 33 percent rate. In 2000 that was lowered to 31 percent, and at the time of this writing, this year, 25 percent.
So if the conservative-leaning, oldest tax organization in the U.S. is saying that taxes have steadily gone down, where exactly is the proof that taxes are too high?
It doesn’t exist. But that doesn’t stop the anti-tax warriors out there. Because it was never really about taxes. It was about starving the government of funding so that its ability to regulate and punish would diminish, and then disappear completely.
The main problem is that the objection rests on the inadequate foundation of libertarian entitlement theory. I know, I know, “inadequate foundation” and “libertarian theory” are redundant. Stay with me.
It is not theft if you receive something in return. It cannot be theft if the only reason the currency value is because that value is determined by the same entity appropriating it: the government.
We’re not going to give Robert Nozick any more credibility than he’s already received by dwelling on his entitlement theory for too long, but his notion that “taxation is akin to forced labor” was nonsensical from the start since the very same Founding Fathers who agreed to the principles of “life, liberty and the pursuit of happiness” specifically did not include “and property rights,” which is where all libertarians fall short. Until such time that the U.S. Constitution is amended to specifically include property rights as natural rights, this is the law of the land.
To put it another way, there is no right to property unless you have an entity that agrees to protect that right. A collective of libertarians and anarchists can hold all the property rights in the world until someone comes through and poisons their water supply because the government couldn’t protect it. Without the force of the state acting in the background through the arms of law enforcement and the courts, property rights have no validity, and can therefore be said to not exist as natural rights.
To put it the way that American right-wingers will understand, your property is only guaranteed until someone else comes along with more guns than you. Absent the government, that’s the case. In the animal world, survival of the fittest is a day-to-day reality. In the human world, governments help facilitate the survival of even the weakest and most at-risk, because we look out for each other via the mechanisms of society and government.
Property rights only exist after the state has defined them. The same state that is funded by your taxes.
To put it yet another way, the Gadsden Flag loses any and all potential for response without Big Brother standing behind it and guaranteeing its freedoms, either through the U.S. Constitution or the “kinetic application of military service.”
Libertarians don’t want to admit that they are only as strong as the state allows them to be via applied commerce on public rights-of-way, sanitized drinking water, sewage systems that transport your waste away for you, an education system that at the very least provides everyone with access to a basic education, and first responders to help in case of emergency.
Or, like Obama correctly said in 2012, “You didn’t build that.”
In order to maintain this structure we have all benefited from to some extent (or should have been able to benefit from), we create a system where everyone benefits a little because everyone gives a little, via taxes. The more you have, the more you’re taxed, but also if you’re earning more you also take more home. The rich may still get rich, as we saw in the Boom era of the 1940s-60s, but society can also be taken care of. There’s enough to go around, so long as the rich stop hording their wealth and sending the libertarians out to run interference on their behalf.
The problem shared by fictional Fry above with nonfictional anti-tax warriors is that they want no taxes, which means no government support for anything that they’ve already been felt the support of.
Were we to renew our tax rates to those put in place in the 1950s, our education system would be better off for it. Our public infrastructure would be better off for it. Nearly everything across the board would be better off, and the only thing that would have to change is that we’d start taxing the wealthy again at historic rates from that mythic time modern right-wingers refer to when their cult shouts MAGA!
And the first step toward understanding that problem is the acknowledgement that taxes are not, and have never been, theft.