Those Pesky Taxes...

September 3, 2010
Jeff Brown, MD

We all know, and will begrudgingly admit, that taxes have to exist to pay for key services that only some arm of government can provide. Police? Check. Fire? Check. Roads? Check. Military? Check. And so on, ad infinitum. But it is the ad infinitum that encompasses most of the conflicts. Where does the spending, and the taxing, or the indebtedness stop, and at what cost point?

As we approach another Silly Season (read: mid-term elections) it might clear the air a bit to think more clearly about what is becoming now a constant hot button topic, our taxes. The rise of the tea party movement has just underscored how T-A-X has become a 4 letter word and we need to acknowledge growing popular discontent, even though tax rates are historically low; so let's sort it out.

Firstly, as the lawyers say, let's stipulate that we are subject to quite a variety of different taxes, as opposed to other considerations such as the appropriateness or the percentage or the overall size of the amount paid to various government entities. Sales, real estate, estate, excise, surcharges, and ubiquitous fees all weigh on us, but the focus of our heat is always on our old friend the income tax and its enabler, the IRS.

Why is that? Psychologically, discontent of many types is easier to manage if it can be expressed as a number, especially a dollar amount. Docs know this from the (hopefully) occasional complaint about fees actually referring back to some other issue. And everyone has an intimate and frequent connection to the IRS via withholding or quarterly payments. It's regular, it touches our personal wallets, and we can measure it in real terms that mean something to us. Billions, who cares? But take $127.50 directly from my check and we're going to get it on!

We all know, and will begrudgingly admit, that taxes have to exist to pay for key services that only some arm of government can provide. Police? Check. Fire? Check. Roads? Check. Military? Check. And so on, ad infinitum.

But it is the ad infinitum that encompasses most of the conflicts. Where does the spending, and the taxing, or the indebtedness stop, and at what cost point? This is the subject of most of our political wrangling. Consider ear marks, war(s), healthcare, and special interest loopholes/subsidies, just to name a few.

And another key flash point is that everyone agrees that for the process to work, it must be roughly fair and transparent, no small task, that. To the degree that it isn't, we turn our wrath on our endless stream of popular and political whipping boys, Congress and lobbyists. Never to ourselves, of course.

The next aspect of the taxing process that gets peoples' dander up is that for the system to be accepted, it has to appear to be reasonably efficient and well managed. And who doesn't have a story about the DMV, the IRS, FEMA or another pet agency that did not at some time or other commit some grievous error in fact, in courtesy or in competence.

There are several sources of all of this heat. The first is just the sheer size of these enterprises. Nothing that big is truly efficient. And to make matters worse, someone, legislators, administrators and even we the voting public, are always meddling. And too often without visible improvement.

Next, as related to the above, we have this big, raucous democracy wherein we are all clamoring to be heard, and we sometimes forget that what we've got can be improved in fact, but not in style. It's noisy, but that's democracy for you.

Now I hate to jump on another designated bad guy d'jour, the media, but there is just so much more of it/them, right, left and center, railing to be heard and seen, filling their 24/7 need for content. So we get no rest from having to constantly hear about governmental issues, like it or not.

No wonder we get mad and demand some surcease, the only simple solution being "less" or "smaller" government, whatever that means. I think for many it ultimately means a) shut up and leave me alone and b) don't take away the services that I use or value, just the other guys', if you have to. But let's be real, it has always, and will always, be a source of contention that we are required to pay taxes, whether large or small, for services to someone or for something else that we do not value. But hey folks, as long as it's roughly "fair," isn't paying taxes literally the price of living together in a civilization?

Our level of complaint is a bit surprising when you realize that we have developed an income tax system that derives the bulk of its revenue from a relatively small percentage of people at the top of the food chain, in spite of the populists' claim that we are all somehow burdened. And yet millions of those who actually pay little or no income taxes continue to be emotional and support those who would cut taxes, even for the richest for whom a tax raise or cut would effectively impact them little, if at all. Some say it's a fairness issue, some say it is an economic stimulus issue and for many it is simply a focus for inchoate anger.

Maybe the real issue is that we are not actually complaing about taxes, but the unprecedented debt we have accrued over the last ten years that promises the future raising of taxes, as well as draconian spending cuts, just to try to maintain our next generation's way of life. Now that is getting scary to think about. So we continue to kick the can down the road instead of taking our medicine. Individually, we have been forced to confront our profligate ways the last two years, what with foreclosures, loss of jobs, and many of us having to reduce our lifestyle.

But regardless of political issues, we can all agree that politicians and administrators at all levels must be more a) transparent and b) accountable for what they do and how they do it. Criminal violation, inadequate disclosure, and incompetence are betrayals of the public trust and must not be seen as acceptable in any way. If we man up and force our leaders to lead, instead of following by poll just to gain reelection, then we can more fairly, and in a more orderly way, determine who gets what and why. And who pays what and why.

Well, you can hope can't you?