No one likes taxes, we do like benefits

Published on Wednesday, 16 April 2014 22:25 - Written by

Tax Day has just passed, and many are still feeling the sting. Still, an article that appeared in the left-leaning New Republic magazine deserves some attention, because it makes a valid point about taxes. We may not like them, but they’re an important fact of life.

We can argue about tax rates and tax burdens (a new study shows that the top 20 percent of earners pay 90 percent of the nation’s taxes). But we can all agree that taxes pay for things we all really, really like.

“Sure, there are plenty of principled, intellectually honest reasons to think taxes should be lower,” said Jonathan Cohn. “But one reason for the rage against them — and the perception that they are larcenously high — is that the act of paying them is so divorced from the act of receiving the benefits that they finance.”

He’s right. Many of us see a big tax bill all at once — on the dreaded April 15 of each year. But we enjoy the benefits throughout the year.

“You might not like paying a lot for groceries, clothing, a car, or a house,” Cohn wrote. “But it feels a lot better because, once you’re done with the transaction, you know what you’re getting for it. You’ve taken care of a basic need — there’s food on your plate, a roof over your head, and, if you’re lucky and can afford it, a Camaro in your driveway. Taxes do the same thing.”

But not all at once. Take entitlement programs, for example. Many of us pay into them for decades before we use them — years and years of payroll taxes, in hopes that someday we’ll take advantage of Social Security and Medicare to help ensure our retirement isn’t plagued with financial problems.

We do enjoy the fruits of much of our tax money on a more regular basis. We use infrastructure daily, for example — the roads and such that we couldn’t hope to pay for ourselves, individually.

And here’s Cohn’s most salient point. Cutting spending, in order to lower taxes, is the wrong approach. If there’s wasteful, redundant or even fraudulent spending in federal programs, then it makes sense to reform those programs — not just cut their budgets.

The food stamps program is a remarkably efficient way to help the hungry. That is, for a government program. It could certainly be improved. But complaining about the increase in food stamp spending — during the Great Recession and the economic malaise that has followed — isn’t helpful. It’s a simplistic response to a much more complicated question.

That’s where conservatives such as Grover Norquist miss the point. In a Tax Day editorial for the Washington Times, he wrote that “All taxes hurt the economy.”

That’s simply not true. Taxes are part of the social contract, a contract we all enjoy. They pay for things we all use, need and want.

Again, we can argue about tax rates. We can take issue with tax code complexity.

But if we’re honest, we know that “no taxes ever” isn’t a realistic position.