Bogeyman Taxes

Ezra Klein had an op ed in yesterday’s Los Angeles Times titled “Give bigger government a chance” online and “Government by Bake Sale” in the print edition. Ezra argues that there’s a backlash growing against conservative arguments that “smaller” government is always better, taxes are always “too high,” and privatization is the answer to all problems. He writes,

Libertarian humorist P.J. O’Rourke likes to say that “Republicans are the party that says government doesn’t work, and then they get elected and prove it.” Over the last few years, that’s been true. But government can work, and increasingly, Americans appear to be anticipating its return. A new Pew Research Center poll finds that public support for a societal safety net and for government protections is at its highest levels in more than a decade — which suggests that Americans don’t think bake sales are the way to fund their schools or that Philip Morris is really who they want subsidizing law enforcement. And in recent elections, the once popular “Taxpayer’s Bill of Rights” amendments that seemed so unstoppable a decade ago are being rejected and, in Colorado, repealed, as voters finally tire of paying the costs in broken infrastructure and insufficient public services.

Digby adds:

The Republicans just run on cutting taxes while promising all kinds of government largesse to get elected and get their hands on the treasury. It’s a very nice little racket that has far less to do with any kind of political philosophy and more to do with their inherent greed and corruption. They go as far as they can until the nation gets fed up and then they leave the field to the Democrats to clean up the carnage. …

… It’s not that taxes were ever popular, any more than paying your electric bill is “popular” or buying a new furnace is “popular.” But until the GOP hit on their free lunch propaganda they were just considered a fact of life (“death and taxes”) as long as the rich weren’t perceived to be getting off easy and the government was delivering services to the people. Republican campaign tactics and governance have pretty much destroyed that resigned acceptance by making people believe that taxes are inherently evil and if the government needs to do something it will magically find the money some other way. The truth is that the Republicans have been running a game that’s the equivalent of you or I taking off work without pay for weeks so we can go to Vegas and play roulette with our credit cards. One only hopes “the grown-ups” haven’t gone so far that we will have to spend the next decade suffering from the hangover.

What is it with Americans and taxes? I’m sure if you went about asking people “Do you think taxes are too high?” most of them would say yes, because that’s what they think they’re supposed to say. We’ve had years of politicians and pundits shrieking at us that taxes are too high, so it must be true, right? When some notion becomes embedded into our national mythos it can take real courage to say out loud no, I don’t think that. So most people reflexively will concur that taxes are too high, whether they are or not.

Of course, then you have to consider what “too high” means, and compared to what? Americans, I believe, pay lower taxes overall than people in many other industrialized democracies. But let’s just say “too high” is “more than I think I ought to be paying.”

Right after the 2006 midterm elections, Lawrence Levy of New York Newsday wrote a column about the suburban voters who had swung away from Republicans and voted for Democrats.

Suburbanites are not anti-change, just anti-extremism of any stripe – whether Democrats in the ’70s or Republicans in the ’90s. They’re not anti-government. Many people move here for more and better government services. And they’re not anti-tax. They’re willing to pay high taxes, to a point, if they feel they’re getting good value.

That’s true generally of northeastern suburbanites, up to a point. Many years ago I moved from suburban Ohio to suburban New Jersey. New Jersey property taxes were many times higher. But my old Ohio suburb had crummy public schools (conventional wisdom said that public schools are always bad, and if you cared about your child’s education you sent him to Catholic school whether you were Catholic or not), and if there was a snowstorm you could wait days before the street in front of your house was plowed. The New Jersey suburb I moved to valued good public schools, and roads were cleared before the last snowflake fell.

But a few years later I witnessed the state of New Jersey gripped by mass hysteria over taxes. As explained in this Wikipedia article about Democratic Governor Jim Florio,

The Florio administration started during the late 1980s recession. Faced with a projected 1991 deficit of $3 billion, Florio asked for a $2.8 billion tax increase. It was the largest increase of any state in U.S. history. The money generated would balance the budget, increase aid to public schools and increase property tax relief programs. Governor Florio also eliminated 1,500 government jobs and cut perks for state officials.

A grassroots taxpayer revolt in 1990, spearheaded by a citizens group named “Hands Across New Jersey” founded by John Budzash, a postal worker from Howell Township.

My problem, as always, is that I actually read newspapers, and I knew that the new income taxes were very progressive (there was also a 1 cent sales tax increase). My state income taxes didn’t change at all, because my income wasn’t all that glorious. But people all around me were going nuts over the tax increase, whether it affected them or not. I saw “Dump Florio” bumper stickers on cars of people who appeared to make even less than I did. In fact, at one point a secretary where I worked was going around with a big “Dump Florio” pin on her chest, and I knew good and well she made less than I did. When I told her that her taxes weren’t going to go up, and explained to her how much one actually had to make before they did, she was dumbfounded. She’d been worried she wouldn’t have enough money left over from the new state taxes to live on.

Then what’s everyone so worked up about? she asked. You tell me, I said. You’re one of the people who is worked up; I’m not.

Mr. Budzash was on television and radio every time I turned around. Someone pointed out to him that, given what he probably made, his personal tax increase (if any) was negligible, and that Howell Township schools — a poorer district — would benefit a great deal. These facts appeared to throw him; apparently they were news to him. But he quickly recovered and declared he didn’t want to tax rich people overmuch because he might be rich some day himself.

Notice that some of the income tax money was to be applied to property tax relief programs. A few years later, when Republican Christie Whitman became governor, she lowered the Florio income and sales taxes. But to pay for this she cut the amount of state money going to public schools, fiddled a bit with state pensions, and outsourced the New Jersey Department of Motor Vehicles to demons from the Fourth Circle of Hell. In many parts of the state property taxes had to be cranked up even more to make up the difference.

The moral here is that in America, taxes are the bogeyman.

On the other hand, I think Lawrence Levy is right when he says people are less bothered by taxes when they feel they are getting value for their money. And they’re more willing to tax themselves when they value the services the government is providing. My neighbors in Ohio (who included Mean Jean Schmidt) were not bothered by crumbling public schools and snow-covered roads, but my neighbors in New Jersey wouldn’t have put up with them for a minute.

Another point: When I was a child, the grownups used to complain about their tax money going to foreign aid, but they didn’t gripe so much about domestic spending. I don’t believe most (white) voters got worked up over “entitlements” until they realized a substantial part of Lyndon Johnson’s “war on poverty” programs were helping blacks.

The moral to that is that people are less bothered by taxes if they think they (or some group they identify with) are getting the benefit of whatever the government is doing with the taxes.

That’s why it makes me crazy when people say government is “too big” without explaining what they mean by that. Awhile back some pollster asked people if they thought government was doing “too much” or “not enough.” Most people were true to their conditioning and said “too much.” But too much of what? Not enough of what? Seems to me the government is doing way too much that it shouldn’t be doing but not enough of what it should be doing.

I think large parts of the American public might agree with the argument that we should be using our tax dollars to invest in ourselves rather than burying it in the sand of Iraq. Instead of vague promises to cut taxes and spending (the latter of which never seems to happen) Democrats should be telling people “We’re going to see to it that you get value from your tax dollars.” Then deliver lower college education costs, better infrastructure, universal health care. I’d like to see it tried, anyway.

13 thoughts on “Bogeyman Taxes

  1. Excellent points, Maha. Unfortunately, I am not sure that many people will see the connection between taxes and maintenance of public schools and public infrastructure until they wake up to realize that the latter has been sold to the highest private bidders, and the former has disappeared to be replaced by homeschooling and vouchers.

    I fear it will take another Great Depression ( and I certainly don’t wish for one) to wake people up.

  2. I also think that voters are aware of the waste, fraud, pork, etc.
    They think that lowering taxes will give the government less to spend on these. They are not aware of what usually suffers from lowering taxes: poorer services with no decrease in pork.

    As Barney Frank noted – the function of government is to spend money.

    I think the only solution is to keep hammering away at good things to spend our tax money – such as free education and universal health care for starters.

  3. They think that lowering taxes will give the government less to spend on these.

    It doesn’t seem to work out that way, though, does it?

  4. BRAVO, Maha!!!!

    I couldn’t add a thing to improve on what you say.

  5. I blame Reagan for popularizing the idea that taxes are some kind of theft of “your money”, rather than a democratically-agreed upon charge upon oneself to support the societal goods we all share. Once it becomes an externalized “government” that “takes your money”, it’s easy to think any taxes are “too high.”

    Pair this with the idea that government is fundamentally wasteful and inefficient, and you have a powerful propaganda tool. Even if government IS paying for things you want, they’re “probably wasting a lot of money” doing it, and could do it for less if they were made to, but cutting the taxes.

    I can only hope that, over the remainder of the Bush administration, we can get enough publicity about what happens when you don’t have levees, or National Guard trucks, or fire planes, or food inspectors, or safety inspectors, etc. And about the relative levels of wastefulness between well-meaning bureaucrats vs. corrupt Bushistas and Treasury looters.

  6. Too bad the local government model doesn’t scale to the national level. At the local level you can draw a fairly direct line between a tax and a benefit. “Your kids can continue to attend classes in the leaky trailers, or you can approve this construction bond issue to build a new elementary school. Choose.”

    Reasonable national leaders (am I describing any Democrats?) need to start drawing that line for people. “You like your Interstate Highway System? Do you think we should do more to secure our ports? Well, guess what…”

    I’ll go on record as saying that taxes are too low. Then again, I’d like a safety net on health care in case I get unemployed again. And I’d like the wounded troups to get better care from the VA, and not have to pay for their meals while hospitalized. And I’d really like to see some improvements in the telecommunications infrastructure so more people had access to broadband. Then there’s…

    Gee, maybe I should move to Denmark. 🙂

  7. I also sometimes wonder, if we had universal health care, good enough that I didn;t need health insurance … would the necessary extra taxes be less than or more than the money I’d save by not having to pay for health insurance?


  8. I think the line about “I don’t want to overtax the rich because I might be rich someday” has a lot to do with this. As many observers have noted, Americans, as compared with Europeans, have little class consciousness. I think the difference (part of it, anyway) is that American workers don’t think of themselves as workers (as European workers do), but as “future rich.” They think “my ship will come in someday” and identify with the wealthy, rather than recognizing the reality that the vast majority of us will never be rich, and thus we’d be better off supporting programs and services for the poor and middle class. This theory makes opposition to the estate tax, which is fundamentally insane for the vast majority of Americans, a lot easier to understand. I first came to understand this back in the 1970’s, when as a teenage baseball fan, I was baffled by other fans’ hostility to the players and support for the owners during that sport’s labor disputes. Of course, these cultural beliefs make us vulnerable to manipulation by the people who really ARE wealthy, and they take full advantage. Europeans must be convinced that we are truly crazy.

  9. Pingback: Russ McBee : Quote of the day (on fiscal irresponsibility)

  10. VALUE is the key word here. A large part of the the Republicans’ victory was the result of their successful campaign in selling tax cuts. However, even republican voters are now realizing the cost of those cuts – those ‘savings’ were offset exponentially. Everyday expenses – utilities, gasoline, groceries, and especially health insurance premiums continue to rise. The trickle-down effect is alive and well – less $ from the federal govt to the states results in less $ from the states to local government results in increased property taxes. And as they say, all politics is local. The Bush tax cuts realized by the middle class have been more than offset by increased property taxes and as everyone knows – all politics is local. And what’s the other saying – oh yeah – you get what you pay for. Now is the time that the Democratic candidates must mention the word “Value” every time the republicans mention the word taxes.

  11. I may well be the only ‘idiot’ who doesn’t and never has complained about taxes, high or otherwise. Taxes pay for smooth roads, taxes pay for fire protection, taxes pay for 9-1-1, taxes pay for police protection, taxes pay for safe air travel, taxes pay for _________ (you fill in the blank).

    To me ‘outsourcing’ of traditional government functions is the source of many of our problems. Graft, greed & corruption follow when government decides to outsource a function.

  12. Many many good points in this post and in the comments. I think the link between taxes, perceived value, services, pork, etc. is self-interest. IOW, all government spending is waste unless it helps me. If people don’t see the connection, they think it’s waste, even if it actually does benefit them. I agree with Zeus that the Dems should take every opportunity in any tax discussion to point out to the taxpayers what they get for their money and how much their tax “savings” actually costs them.

  13. Your column was interesting, I am honestly flattered that you, or anyone, remembers so much of my activities in the 1990’s. You are correct that I did appear on literally hundreds of TV and radio shows.

    As for that comment you said I made, I really don‘t remember that, but it‘s possible I said something along those lines. BUT….. I was at all times aware that Florio’s INCOME taxes did not affect me AT THAT TIME, but I knew within a year or 2 they would. Regardless they were unfair and he lied and I was tired of being lied to by politicians.

    Simply put I do not believe in Robin Hood. I do not want to carry the tax burden for others and I do not want others to carry the tax burden for me. I do agree with you about a progressive income tax. I prefer everyone pay their own way in life, unless honestly disabled and unable to work.

    I also knew I’d be getting his new $500 rebate. I live in Howell Township that is not and was never, a “poor district”

    Actually, I have never been driven by money. The only way I’ll get rich is to win the lottery and I do not buy lottery tickets. I have never had any burning desire to be wealthy. If so, I certainly wouldn’t have been working at the US Postal Service. I would have done the same as Gov Corzine and gone into selling investments and stocks, where the investor and investment can both go bankrupt and the broker still gets a big commission.

    Your problem isn’t that you read the newspapers, it’s that you failed to think or realize what the Tax Revolt was all about. It also seems you and your fans forget that the USA was founded on a Tax Revolt and a quest for a government void of corruption that actually worked for the publics best interest. There were a few people who sided with England, kinda like you are doing here sticking up for those who waste our hard earned tax` dollars

    When any government imposes any tax that is unneeded, regressive, or unfair, people need to speak out.

    Necessities should never be taxed. NJ Government mostly agrees and does not tax clothing or unprepared food, however your NJ home is taxed at a higher rate than in any other state. A persons home is not a luxury. It is necessary to have a place to live. I believe property taxes should be totally eliminated or made minimal to pay for basic services like police, fire and first aid

    In 1990, the economy was in the toilet. NJ was the first to feel the affect of the recession and came out of it later than the rest of the country. Foreclosures were up. Businesses were failing at a high rate, Shopping centers all over the state had high vacancy rates. Factories closed and hard working people were losing their jobs and their homes. Many people were fleeing NJ.

    I got a letter from a woman in Trenton who sent us $1 with a note that said (paraphrased) “Please forgive me for my problems, I’m an 82 year old widow. My Husband died 15 years ago and my only dream was to live the rest of my life in my home that I have lived all my life. It was also my parents home. Now I can no longer pay my property taxes because my retirement income is not enough. I am sorry I can not afford to send you more. Please keep up the fight.

    A big part of the motivation in the 1990 Tax Revolt, was the lies that got both Florio and Bush elected. Florio correctly stated “The Kean years were a runaway freight train of spending” “we don’t need new taxes. There is no shortage of revenue” He promised a total audit of state spending (he did do this, but then ignored the findings) along with many other great and worthy promises. The problem is that once in office, he couldn’t cut spending for programs that gave money to political hacks, or contributors. He passed the biggest state tax increase in our nations history. A record that I believe still stands today.

    Everyone was affected by Florio’s tax increases, just as we all were by Bush’s tax increases after he also won election with a promise of “Read my lips you’re all assholes for believing me” Oops sorry that‘s a misquote, he said “read my lips, no new taxes” then passed the biggest federal tax increase in history.

    You allude that Florios taxes were an income tax and a tiny “one cent” increase in the sales tax. In fact there were many many new taxes on soft paper AKA the infamous ‘Toilet Paper Tax’ a new tax on heavy trucks, real estate sales taxes, lots of other new taxes and the repeal of many state income tax deductions

    In NJ, the sales tax increase was not a as you claimed, a “one cent tax increase” unless you only spent one dollar. In fact it was a 17% increase in that tax. Everyone paid it until we forced the repeal of that tax, the infamous Toilet Paper Tax and many other taxes. Did NJ suffer at all with the repeal of those taxes? Nope!

    NJ suffered because EVERY politician in office for many years before or after Florio, failed to try to improve government, cut corruption, or to control spending.

    Several times a month, some politician, hack, or public employee is in the news for ripping off taxpayers in some manner. Most get away with a slap on the wrist.

    I agree with your quote of Lawrence Levy of New York Newsday who said “They’re willing to pay high taxes, to a point, if they feel they’re getting good value
    Are we getting good value for our taxes?

    I’m using approximate figures below, because I do not have a great memory like you do, but I’m close and the actual amounts are not important to the point I want to make.

    Around the time I started HANJ a “whistleblower” in Monmouth County exposed a bus company owner who won a contract to provide bus service. I believe it was for commuters. NJ paid the bus company about 14 million a year of our tax dollars to provide the service. The bus company owner skimmed off 7 million for personal use, but was still able to provid the service they contracted to provide, supposedly with no complaints from passengers or anyone.

    After they were found to be ripping off the NJ Government, the contract was revoked and awarded to another company. Makes sense right? Yep except the contract was for about that same amount. NJ officials ignored the fact the 1st company actually performed as agreed needing only ½ the amount, so why wasn’t the contract price lowered to what was actually needed to provide the service? Neither NJ or the Federal Government are known for getting a dollars worth of anything when they spend our dollars. In fact we tend to spend $2 for a one dollar product . Then there’s the extremes like the Feds paying $495.00 hammer and $640.00 for a toilet seat, and NJ DOT paying $4 Million for overhead signs on highways that Ohio buys exactly the same for only $7,000.

    I’m glad where you live provides excellent service. My street was supposed to be repaved 20 years ago, but they said they had no money, so instead they sprayed oil on the old road and dumped gravel on top. My street is like a minefield of potholes. There is no money to pave it, but there are always funds to pay teachers and town employees higher salaries or to hire some hack or build commuter parking, or a new park, or for dozens of unnecessary projects

    I have to admit plowing is far, far better now, but for the first 8 years, I’d use my old International farm tractor to plow my street because it usually took a day at best, or 2 days normally for my town to plow my street.

    Our taxes (yours and mine) pay 2 of my neighbors disability to sit on their butts. This is fine if they are truly unable to work, BUT both are capable of hard manual labor and do so often. Both are divorced and have kids who also get paid because dad is ‘disabled’ 1 runs a welding business and sells stuff at flea markets, the other lives quite well and is able to lift heavy logs, split them, stack them and carry them to his house. He raked out 4” of heavy gravel for a 10X24′ shed and never shows any sign of discomfort. Yep I reported him to S.S. and furnished several videos of him working hard manual labor but apparently nothing was done and they can not discuss this.

    OK that’s fraud, add in the strippers who get welfare, section 8 housing and make $200- $1500 a night off the books ‘dancing’

    Lets look at ‘entitlements’ and ‘subsidies’.

    We pay high property taxes to send kids to school for K-12, now we’re also paying for preschool, free busses, free lunches, after school care and health care. We also pay taxes to subsidize bus, rail and boat fares for people making 6 figure incomes to commute to NYC. Our taxes subsidize marina’s, golf courses, where people far better off than me enjoy their boats and to play golf (I trailer my 25‘ boat) local and international airports, We subsidize housing for poor people and also to help people who make double what I earn so they can buy a home many of which are ‘affordable houses’ that are priced far under market ( because of tax subsidizes) enjoy SUPER
    LOW interest rates or 0-3.5% and also enjoy extremely low property taxes that are capped so these few people can live ‘affordably‘

    Problem is, when you tax people to help others live more affordably, you make NJ less affordable for those you took that tax money from.

    Our tax dollars also subsidize restaurants at private clubs, Horse racing (I drag race cars where no subsidy exists) We subsidize the opera, ballet and other ‘Arts’ that bore me and I never attend and are mostly patronized by people earning far more than me, while I must pay full cost to see the Beach Boys in concert.

    No one pays me anything to subsidize my art when I build custom cars or motorcycles, while many ‘artists’ or ‘performers’ get state grants for their art, like a few years ago a guy got about a $500,000 federal grant for his ‘art’ that was to put colored plastic rings around a very small island off the Carolina’s . I think they lasted only a few days before the tides destroyed them.

    This country was founded and built on a free market system with taxes gotten from import taxes and duties. Today people are trying to make us communist by increased taxes, sending jobs overseas, sharing the tax dollars ‘wealth’ by making thousands of subsidies and entitlements. The USA became great without these socialistic ideas and a true free market system can and will make us great again.

    As for education, I’d love to get into that but have taken too much time already, I’ll just say spending more money does not equate to a better education. Dollars spent without firm guidelines such as for every 30 students a school must have 10 computers, 2 microscopes, 1 football, 1 basketball, etc., etc., Instead we give money that only ends up in higher administrative and teacher salaries.

    If you’d ever like to debate the tax issue or anything to do with State or Federal spending, I’d be happy to meet you face to face for some friendly banter on the subject.

    In closing, if you and your fans really think we are under taxed in NJ or the USA, you are free to send the NJ or Federal Gov. as much extra cash as you want. Will you? I tend to doubt that you will. Did you refuse any of the tax cuts we got for you? I doubt it. If I’m wrong, please correct me

    John L Budzash

    Email [email protected]

    Website HandsAcrossNewJersey.US

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