Tax Free

Just finished up an all too short vacation, which ended with the Massachusetts tax free weekend. I didn't plan it that way, nor did I really participate in this event. Although I did buy a few things, they were things we needed to get anyways. But I'm a little puzzled about why this is a such a big deal for people.

If a store was to run a promotion in which they were to say "This weekend everything in the store is 6.25% off," would anyone show up? My guess is probably not. But in saying everything is tax free then everyone comes because they think they are getting away with something. Even more puzzling is that the vast majority of people are paying for all these items on their credit cards. So they want to save $62.50 when they buy that $1000 television, but they are going to put it on a credit card at 14% interest (that's the current average, meaning many people are paying a lot more).

If people pay $50 more a month on their credit card to pay this off, they will end up paying $145.38 in fees to the banks rather than to the government. If they pay an extra hundred dollars a month, they end up paying $69.62 in interest fees. Those are both losing propositions. And remember, that would require people to pay more each month on their credit cards. If they kept paying the same amount, or only paying the minimum those rates go through the roof. Making the minimum payment on that $1000 TV at 14% will add an additional $509.57 to the total cost. Good thing they saved the $62.50 in taxes or it would be really expensive.

Now this statement will tell you exactly where I am on the political spectrum, but I would much rather give $62.50 to the government then even the same amount to my credit card company. Do I love paying taxes, no, but I understand their purpose and necessity. Oliver Wendell Holmes, Jr., said that "taxes are the price of civilization," and I would agree with him.

Now some have argued that anyone who makes this statement is really just for big government and against the "people." But I reject that argument on its face. There is simply no way we could operate as a society without taxation in some form. In his book Guns, Germs and Steel, Jared Diamond does a great job in elucidating what makes a move from small hunter-gathering tribal groups to larger societies possible, and one of those things is taxes. In fact the oldest known writing, which comes from Egypt, is about taxes.

I personally like having roads, a police and fire department, a community pool and parks, and I even like the social safety net, although I think it should be greatly improved. While I do not like paying for an empire I also gladly pay for that because government is about compromise and if I have to pay for too much military in order to have a system that protects the most vulnerable then that is a compromise I am willing to make. It might not be a good one, but it's the best we have at the moment.

What I'd really like to know, however, is when some politician is going to make the argument about the benefits of taxes and what we all get out of it, even those who hate them. I don't see them refusing to drive on roads, buying buildings that have not been inspected, or refusing to call the fire or police in an emergency. Those are all social goods that can only be provided by a government. These things simply cannot be paid for without taxes. (I know that there are private fire departments, and I've seen them in action and can tell you some stories.)

We need to move beyond the individual and thinking only for ourselves and remember that we are all in this together. That our situation in life has more to do with flukes of nature than with everything we have done (think John Rawls). I know there is no politician willing to stand up and defend taxes, but I would sure love to see it and they would get my vote.

And one comment for all the tea party members, which includes a member of my own family. I understand the argument. There are certainly changes that need to be made, making the system progressive rather than regressive is one. But let's understand a couple of things, besides for what I've already talked about.

First, removing the tax break given by President Bush will not affect your life unless you are in the top 3% of individual income, which is currently about $250,000 a year. Second, as a historian I have to say that if you want to take on the tea party tax protest as your metaphor then you need to study history.

Why was London raising taxes on the colonists? Because they were having a hard time paying for wars and keeping the military up. Having an empire is extremely expensive, and the British regulars had fought several wars in America to protect the colonies and the debts were raking up. What parliament was doing was charging the colonies the fees they felt were necessary to keep a military presence in America, and to pay for the wars they had already fought in America for the colonists. Does this sound familiar?

I am just as concerned about the national debt as anyone because I know who will be paying for it. And just so we're clear, the current budget deficit does not include the wars in Iraq and Afghanistan because most of those expenses are extra budgetary items that don't show up in the federal budget. But we cannot continue paying for those expenses, or paying for our empire, without taxes.

The Democrats have been accused of being "tax and spend," but that is better than the last administration which was "don't tax and spend." The money has to come from somewhere and at some point the piper will demand payment. If we want to reduce taxes then we have to face serious realities about military expenditures (which, by the way, includes socialized medicine and housing).

If the tea party wants to make that part of their platform then they will truly began to get support from across the spectrum.