Our Real National Pastime – Tom Rossi

Here in the United States, whining about taxes is probably more popular than all of the major sports, combined. Forget about baseball – tax-whining is our true national pastime.

What’s amazing is that the distribution of whining, like so many things, is so illogical. In fact, tax-whining is positively correlated with a person’s or a corporation’s wealth. So, the more you have, the more you whine. It’s sort of like a team in Major League Baseball complaining that, in their run up to winning the World Series, too many strikes were called on their batters.

The favorite topic of tax-whiners is that the top income brackets pay all of the taxes while the bottom half of the so-called “middle class” (nobody want to be labelled “poor”) pays nothing. They love to go on about the 47% – the “takers.” That number was made up, by the way.

As justification, the tax-whiners always point to one statistic… the statistic that makes them look right. Here it is, in graph form:

But this is only part of the tax story. People pay taxes on much more than income. They pay taxes on property, gasoline, and sales tax on purchases of goods. The truth is that, when you add all those taxes up, the bottom 20% of earners pay about 17% of their incomes in taxes, while the top 20% of earners pay about 29%. That’s a significant difference, and I’m sure it frustrates those who live inside a calculator.

But it’s nowhere near the claims that are made, usually by Republicans and Tea Party types. And we should pay close attention to the effect that these percentages have on people. For someone who makes $250,000 per year (for example) paying 29% in taxes means that they are left with $177,500 to live on.

For someone earning 13,000 per year, paying 17% in taxes means that they are left with $10,790 to live on. That’s less per year than what the $250,000 earner has left per month. And, as I’ve argued before, the more money a person has, the more benefits he or she gets from taxes.

To the whiners, I say this: I realized that the prospect of paying an extra $500, or so, in taxes for a year might mean you have to put off buying a house for another month. Or it might mean that your kids actually have to go to public school. Or it might mean you have to buy the Lexus GS instead of the LS. But a difference of even $100 to a family on the receiving end of this shotgun economy might mean that their kids get “new” shoes (maybe from the Salvation Army) when their toes poke out through a hole. Or it might mean that they can afford to heat the house to above 55° in the winter. Or it might mean that they can pay the electric bill for another month or two.

These are two different worlds. What I’m talking about is called “Marginal Utility Theory,” and it’s a part of standard, old-fashioned, neo-classical economic theory. It just gets ignored because it is essentially an “inconvenient truth.” Without putting you to sleep, what this boils down to is that $1000 means nothing to the well-being of a millionaire, but it could mean the world to a poor person, or a poor person’s children.

President Obama and others are in the process of attempting to re-balance the tax code which has, in recent decades, come to favor the rich and the corporations. And now, we have an influx of veterans that often have an incredibly hard time finding a good job – or sometimes any job, for that matter. This is happening while government programs are being cut left and right.

If you really want to “support our troops,” if you are really “pro-life,” then realize that your tax dollars are helping people who really need it. And their health and well-being will come back to benefit you in ways you may not be able to imagine.

-Tom Rossi

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Tom Rossi is a commentator on politics and social issues. He is a Ph.D. student in International Sustainable Development, concentrating in natural resource and economic policy. Tom greatly enjoys a hearty debate, especially over a hearty pint of Guinness.

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Changing Car Production

On Monday, I said we would begin to tackle the serious issues we are facing. I’m not going to write here about the benefits of hybrid cars. I’m going to take it as given that most of the Left Coast Voices readership believe in the threat of global warming and understand the environmental benefits of hybrid cars. If you disagree with me, feel free to state your case in the comments section. I plan to write about alternative energy at a later date.

What I want to ask is: if we already have the technology to create the hybrid car, then why are we still producing non-hybrid cars? While every other car in the Bay Area is a Prius, did you know that Porsche are producing a hybrid sports car? Also Jaguar are busy producing their own hybrid line, and both cars should be ready to coincide with my fiftieth birthday (to help this come true, please contact your local top fiction publisher or blockbuster movie company!).

I only want one so that I can commute to work in the car pool lane!

The Chinese, I believe, use the same word to mean disaster and opportunity. With the collapse of the American car industry, there was an opportunity that was only partially grasped. The American public seemed willing to bail out the US car industry but insisted that it become relevant in today’s economy. I had the opportunity to hold this discussion with about a dozen patriotic, forward-thinking Americans, almost all of whom are loyal Toyota, Honda and Lexus drivers.

Ford Escape Hybrid - the top choice for my next family car.

In restructuring the American car industry, why didn’t we insist that only cars with a minimum mpg be produced? Why not decide now that no car with a fuel consumption of less than 35 mpg will be made on American soil by 2013 – the technology is there, so why wait for a few more icebergs to melt?

Can we go further and not import cars that fail to adhere to such standards? Instead of fearing repercussions from our fellow business partners abroad, why not build consensus by bringing them on board to adopt the same standards? The country that manufactures Toyota, Honda and Lexus, fully understands what happens when the natural world goes out of sync.

What’s holding us back from taking this simple, but bold step? We’ll discuss that on Friday.

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Alon Shalev is the author of The Accidental Activist (now available on Kindle) and A Gardener’s Tale. He is the Executive Director of the San Francisco Hillel Foundation, a non-profit that provides spiritual and social justice opportunities to Jewish students in the Bay Area. More on Alon Shalev at http://www.alonshalev.com/and on Twitter (#alonshalevsf).