« One image, One moment - On the Road to the Beijing Olympics | Main | Distractions »


April 17, 2008

Tax Cuts make Us Poor

-- by Dave Johnson

This post originally appeared at Speak Out California

Some years ago the corporate-funded anti-tax, anti-government advocates paid their way to become the dominant voice in our civil discourse. They said there was a magic, simple formula that would lead to shared prosperity. All we had to do was cut taxes, and everyone would have more money.

Everyone wants to have more money so this sounded wonderful. It is always a seductive argument to tell people that you have a magic formula that can make things better for them. One example is machines that create as much energy as they use -- or more. A common myth is that doctors are conspiring to hide the cure for cancer because it would put them out of business. Another is that there is a formula that turns water into gasoline -- or lead into gold.

"Just cut taxes, and we will all have more money." "Taxes take money out of the economy." "It's your money and you should decide how to spend it."

"But," some people asked, "where will the money come from to pay for our roads and schools and all the things that have made us so prosperous?" The seductive response from the tax-cutters was that government is an anonymous, incompetent, inefficient "them" that spends too much money that we could all have in our pockets, and if we just cut out waste everything would be all right. Just cut the waste.

The thing was, whenever one tried to pin them down on specifics of this waste they would never really explain where all that fat really was that they were going to cut -- at least not in quantities sufficient to match their tax cuts. Don't worry, put us in power, cut the taxes, and it will all sort itself out.

So eventually we fell for it and cut taxes and put the anti-government people in power. When we noticed that their tax cuts went mostly for corporations and the very rich, they said don’t worry, the money would trickle down to the rest of us. So we quieted down and waited for the magic to happen. When we noticed that the corporations and wealthy were getting richer and richer while we were losing our pensions and health insurance and jobs, they said don't worry, tax cuts make us richer. We still didn't understand that you and I and the regular people of California were not part of their "us" that would get richer.

The fact is the public officials that We, the People had elected had done competent jobs and there just wasn’t really much waste to cut. Why would there be? The people that we had elected had been good managers of our money. Democracy and accountability require open, transparent processes that the corporate anti-government, anti-tax advocates labeled as "inefficient bureaucracy." That was the waste they had been talking about - the oversight and transparency of good government! Our elected officials had put these systems in place and they had made sure there was no waste -- it was a myth.

Our government had been humming along, paving the roads, educating our children and investing in projects that led to modern wonders like the Internet. And we had been enjoying the resulting prosperity. California had the best public schools, colleges and universities in the country. We had the best roads, courts, parks, libraries, health care system, water projects and most innovative and open government and this investment had led to a thriving economic ecosystem.

So instead of cutting imaginary waste we started cutting out this engine of prosperity. We cut the schools and the road maintenance and everything else. The education system started getting worse and the roads and other infrastructure started deteriorating. California fell from first to near the bottom on many scales. Companies started leaving the state because of the deteriorating infrastructure and lower education levels.

Then when cutting our own services wasn't enough we borrowed money to cover those tax cuts and pay for what government was left. We borrowed and borrowed and borrowed. We were just like the homeowner who refinanced every year as prices went up it seemed like the gravy train would run forever.

Today the borrowing is catching up with us. As so many homeowners are learning to their dismay: borrowing means payments. And borrowing more means larger payments. In California the payments on our borrowing just happen to be pretty close to the amount of our budget shortfall. The same is true of the federal government.

Now we approach a day of reckoning for our tax cuts. The bill has to be paid, and the people who received the big tax cuts are pointing the finger at you and me. We can continue to cut out government and lay people off. We can continue to cram more and more children into classrooms with fewer and fewer teachers. We can have longer and longer lines at the DMV. We can close parks. We can have fewer police patrols and fire stations and ambulances and health and safety inspectors. We can just get poorer and poorer.

Or, we can start to close loopholes like the one that lets wealthy people avoid sales taxes on yachts and private jets while the rest of us pay sales taxes on everything we purchase. We can start to close loopholes like the one that lets oil companies pump our oil out of the ground without paying us and then sell our oil to us. We can start to raise taxes on the wealthy and corporations who prosper because of the roads and financial and legal system we built, and whose taxes were cut leading to this mess. They need to stop simply taking and start paying their fair share. We can do these things and start to restore the thriving economic ecosystem we once had.

Click through to Speak Out California

Posted by Dave Johnson at April 17, 2008 12:26 PM

Trackback Pings

TrackBack URL for this entry:
http://www.seeingtheforest.com/cgi-bin/mt/mt-t.fcgi/3733


Comments

IMO, it was never really about "having more money." It was "what it is getting spent on. Rightwingers seem to have no problem opening the purse strings for All Things Military. And they seem docile about Corporate Welfare.

I suspect they just don't want to have "their" money spent on "poor (brown) people." That's why they get so foaming about Domestic programs.

Just a suspicion.

Posted by: Cathexis at April 18, 2008 11:11 AM

... but that's why any debate about "whether tax cuts do or don't make money" is pointless. The argument is a smokescreen because they know their real reasons are "socially unacceptable."

Posted by: Cathexis at April 18, 2008 11:12 AM

Post a comment

Thanks for signing in, . Now you can comment. (sign out)

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)


Remember me?



Email this entry to:


Your email address:


Message (optional):


Return to main page