Whenever I hear a candidate or aspiring candidate giving fourth with some version of the old “Read my lips, no new taxes,” I have two very different reactions. One is that this is probably prudent electioneering at a time when most Americans take a dim view of paying more to governments when they are so hard-pressed themselves. The other reaction is that if this office holder wannabe actually believes this is actually a good idea, or even ever likely to happen, he or she is a ninny.
Taxes aren’t fungible like certain commodities. An ounce of gold or silver in any form, worked or virgin, new or old, mined anywhere, is a fungible commodity — i.e. it’s the same material with the same value no matter what. Taxes aren’t like that, however. Saying no new taxes without differentiating between different kinds of taxes, taxes for different purposes, taxes that affect one group and not others, and the bevy of government grabs that aren’t officially called “taxes” but really are, is plain dumb conceptually, and even dumber in terms of setting good policy.
Should there be no new taxes on earned income generated by work; on unearned income received for passive behavior like saving; on targeted items like gasoline with the revenue generated going only to maintain roads (at least theoretically); on only higher income people who presumably are better able to pay them, with receipts used to help those less economically fortunate; on businesses rather than individuals or vice-versa; on sales directly or indirectly through VATs (value-added taxes); on items that parties presumably have discretion in acquiring or not (use taxes); in the form of fees and fines that are not called taxes but since they transfer money from individuals and businesses to government really are (think parking tickets here); on estates with different taxes for estates of different sizes; on foreign assets with some connection to the domestic economy; on activities that are deemed socially harmful and therefore discouraged by big taxes (like cigarette smoking); and on and on and…
And when you say no new taxes, does that mean no new enforcement as well? That’s worth asking because anyone with the slightest awareness of tax reality in this country today is aware that not only the IRS, but state and local government tax collecting cadres are as active as hornets in a nest whacked by a broom.
I recently did a story for a New Jersey magazine in which some accountants I interviewed made a big point of the fact that while that state’s new governor is ferocious in opposing any new taxes, he seemed well content to see the state’s tax collectors going after everything already on the books with equal ferocity. I also have a friend in Philadelphia who tells me he is being chased by that city’s own tax gatherers for an alleged 21-year-old business privilege tax underpayment — an interesting assessment indeed because since no one on this planet keeps personal tax records for that long, it’s virtually impossible to challenge, and interesting as well because it suggests the depth to which local governments around the country are sinking to meet critical revenue shortages.
I have nothing against the no new taxes crowd. I may not agree with them always, but I often see their point. Just please, define your terms folks so we know what you’re really talking about. What you really plan to do about different taxes. And whose bull you mean to gore by not being able to afford helping some in order to help others with a smaller tax bite.
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