One of the main arguments for why it's a bad thing if the newspaper industry dies is that newspapers cover local affairs in a way that nobody else does, and that has demonstrable effects on people's lives. Most of the time we don't actually see those effects, but every once in a while, a story comes along that proves all over again why newspapers are so vital, not just because of what they can expose but because of the change that can come from it.
The Washington Post is in the midst of a series of articles about an unbelievable scam victimizing some extremely vulnerable citizens of the District of Columbia. It's one of those combinations of government incompetence, private greed, and sheer immorality that just makes your blood boil. Here's what happened.
A few Republicans out there, struggling to put the IRS scandalette in a larger context, are now saying it shows we need tax reform. It doesn't really, unless their argument is that we've been letting shamelessly political 501(c)(4) organizations get away with a scam and we ought to clarify the law on what such organizations can do. But that's not what they're saying. What they're saying is that the IRS matter shows we need to change the tax code to reflect the same policies they've advocated forever.
It wasn't as though this particular scandal arose because filing your personal income taxes is too complicated or because the corporate tax system is riddled with loopholes. It was something very specific, the law regarding how certain kinds of nonprofit organizations are allowed to operate. Frankly, there's no part of the tax code conservatives care less about. What they're interested in is changing personal and corporate taxes.
A familiar tale: In a small country on the Mediterranean rim, the government chooses to solve an economic crisis by enacting an austerity budget. Regressive taxes will rise. Aid to families will be cut. Less will be left of the welfare state built decades ago. The novice finance minister promises this will heal the economy.
As the people of that unhappy land say: Happy are those who believe.
In 1984, CompuServe launched the first “Electronic Mall,” a Pleistocene-era Amazon with which owners of a TRS-80 personal computer could browse and buy goods over the Internet. Such modern retailers as “The Record Emporium” and “The Book Bazaar” were given prominent virtual storefronts. A full page ad in the May 1984 issue of Online Today boasted, “By the year 2000, the world may catch up with the way CompuServe’s new Electronic Mall lets you shop today.” The world took less time to catch up than that: By 1995, eBay and Amazon had been incorporated; in Amazon’s first two months as an online bookstore, it averaged $20,000 per week in sales. Americans would go on to spend around $700 million online in 1996, and by 1999 sales had grown to $20 billion. Figures released earlier this year by the Commerce Department revealed that Americans spent $225 billion online in 2012—a 400 percent increase in only a decade.
Today is tax day, the yearly opportunity for millions of Americans to shake their fists at the government and declare their contempt for the ideas of mutual concern and collective responsibility. So on this most practical of days, it's good to remind ourselves of some realities. First, the taxes we pay are, by international standards, fairly modest. Second, despite what some would have you believe, the wealthy are not crushed by the burden of taxation. And third, though nobody particularly enjoys giving part of their income to the government, taxes are the price we pay for having an advanced, democratic society.
In February 1913, exactly a century ago, the Sixteenth Amendment gave Congress a constitutional green light to levy a federal tax on income. Later that same year, lawmakers made good on that opportunity. An income tax has been part of the federal tax code ever since.
The top marginal income tax rate, a testament to our oppression. (Flickr)
When the Tea Party movement started in 2009, some of its adherents made signs that read, "Taxed Enough Already!", since the movement defined itself in large part as a reaction against the oppressive tax policies of the federal government, sucking ordinary people dry in its endless search for cash to fund its freedom-destroying schemes. This was always an insane inversion of actual reality—the truth is that as part of the stimulus bill, President Obama actually cut taxes for almost everyone, and the only tax increase he imposed in his first term was a hike in cigarette taxes. It's true that the Affordable Care Act contains a number of different tax increases (on things like "Cadillac" health plans), but those have not taken effect yet. But to many conservatives, it just feels like they're paying more taxes, because...well, because there's a Democrat in the White House.
Today, the Congressional Budget Office released a report on the taxes we have actually been paying, and guess what: the average federal taxes paid by Americans are at their lowest point in the last 30 years:
Since not much campaign news happens over the July 4th holiday, Mitt Romney took the opportunity to change his campaign's tune on whether the Supreme Court was right that the penalty in the Affordable Care Act for those who can afford health insurance but refuse to get it is actually a "tax." To review, the Supreme Court said the government has the authority under its taxing power to penalize those who refuse to get insurance, leading Republicans to cry, "Tax! Tax! Tax!" with all of their usual policy nuance and rhetorical subtlety. The only problem this poses for Romney is that calling it a tax means that Romney imposed a tax with his health care plan in Massachusetts, which means admitting that Romney sinned against the tax gods. So first his spokesman came out and said that no, it's really just a penalty, but then Romney came out and said, well, if the Supreme Court said it's a tax then it's a tax, but it wasn't a tax when I did it, because the Supreme Court didn't call it that.
What does all this arguing over semantics tell us? It tells us that the press and public are both complicit in creating the hurricane of stupidity that every presidential campaign devolves into.
Despite the Camp David G8 summit’s support for a shift from austerity to growth, there is no agreement among major western leaders on what growth requires.
Here is an idea whose time has come: a Financial Transactions Tax.
The tax would do two things urgently required by the crisis. It would take some of the profit out of the pure speculation that has created such hardship for countries like Greece, Portugal, Spain, and Ireland whose economies have already been pummeled by recession and by perverse demands for belt tightening.
And a tax on financial trades could raise some serious revenue, which could be put back into green investment and other forms of economic stimulus to help the economies of Europe revive.
Over at the Center on Budget and Policy Priorities, Chye-Ching Huang has written a massive review of the evidence and literature on the relationship between taxes on high-income earners and their effects on economic growth. Her key findings are surprisingly straightforward, and important for how we approach current debates over tax reform and economic policy:
This piece is the third in a six-part series on taxation, and a joint project by The American Prospect and its publishing partner, Demos.
As the White House mounts a major campaign to sell the “Buffett Tax” this week, there is another, better tax on the 1 percent that Washington should be considering: A financial-transaction tax—better known as a financial speculation tax (FST).
You don’t have to be a genius to know the basics of running for office: Look sharp, love America, take in big money, and—most important—promise you won’t raise taxes. Thanks to Grover Norquist and his band of anti-tax crusaders, raising taxes has come to seem akin to murdering puppies and loving terrorists. Even during the worst fiscal crisis in 80 years, if you’re a state lawmaker, you must cut core government programs without ever mentioning the “T” word. And if, God forbid, you decide to raise taxes anyhow, do everything you can to distract people from the effort. Openly calling for citizens to pay more to their government is nothing short of political suicide.