Thursday, September 16, 2010

Show Me the Money: What do we know about taxes?

I am currently engaged in a wonderful project called "Show Me the Money". The purpose of the project is to engage nonprofit staff in understanding tax policy, and then hoping that they will advocate for revenue solutions to our budget crises rather than more cuts. Nonprofits that rely on government funding to provide needed services are watching their funding be reduced again and again, while both the cost of doing business and the need for their work increase. This has reached crisis proportions, with thousands of nonprofits laying off staff, cutting programs and even going out of business altogether. The bottom line is that without significant restoration of government revenue, there is not enough money to do the work that communities count on nonprofits to do.

Compounding the problem is the fact that nonprofits (with a few exceptions) have not taken any leadership in advocating for fair and just tax policies that would create a tax stream capable of maintaining a social safety net and adequate quality of life. In the vast majority of states, and certainly nationally, there is no “nonprofit lobby.” Congress people do not look at their windows and think, “Oh, no, the Nonprofit Lobby is here.”

I see social service agencies turning themselves into pretzels to meet more and more need with less funding. And the problem is that every time we try to do more work, help more people, provide more services, using the same amount or often less money, we say to the right wing, to the Grover Norquists’ of the world: “You were right. We didn’t need that much money to do our work.”

There is an appalling ignorance about issues of tax and budget structure among nonprofit staff. In my (admittedly not scientific, but still fairly large) survey of nonprofit staff, few knew how their state budget structure worked, few had opinions on things like what the estate tax should be or whether increasing sales tax on alcohol and soda is a good thing or pushes still more of a tax burden onto poor people. (This may be true in the public at large as well.) Mostly, in keeping with the overworked and beleaguered culture that prevails in nonprofits right now, staff feel there is little they can do to influence tax policy and so the effort to learn about it would not be worth it. There is a related unwillingness to stand up for ourselves and for the people we serve for fear of losing our tax status or losing further funding, or out of inability to budget the time.

The organizations that are experts on tax policy and do advocate for progressive solutions tend to do it like this, “Here are a bunch of difficult- to-understand facts (mostly numbers) and here is what you should do: use this message, advocate for this, vote for that.” The problem with giving people a lot of information and then telling them to act on that information is that no time is spent finding out what opinions or feelings people start out with. A Canadian activist once told me, “When American activists see a problem or find an injustice, you immediately say, “What shall we do? What shall we do?” And you run around DOING a lot, but much of is ineffective because you don’t stop to say, “What do I think about this? What do others think? Are my feelings and my thoughts different? Am I acting out of what I have been taught to think, or have I taken the time to create my own thinking? Who can I talk with?” Americans take great pride in saying that people have the right to their opinion, but no one is going to form an opinion if their lived experience is that no one ever asks them for their opinion.

Organized philanthropy is no help either. For example, recently there was much praise for the “Giving Pledge” led by Warren Buffett and Bill Gates. Certainly the Council on Foundations or Independent Sector should thank these men for being so generous, but also they need to ask a question about what kind of society lets people accumulate that much wealth in the first place? In the world of organized philanthropy, we see very little advocacy about the estate tax, and some large coalitions of nonprofits have opposed Obama’s proposal to cap deductions, even though 71% of Americans file a short form and receive no tax benefit for their giving at all. To my knowledge (and I would love to be wrong), there is no major coalition of nonprofits that has raised the question about the purpose of taxes, and has asked how it is that we have a tax system which is redistributive, but redistributes massive wealth to fewer and fewer people.

There is no easy solution to this complicated problem, but any solution must begin with educating ourselves and each other about the role of taxes in public life. Taxes are primarily a revenue tool, but they are also a mirror of community values, and we need to make the connection between taxes and the common good. A commons approach to movement building starts with a commitment to conversation, and an assertion that having a conversation is DOING something. Start with asking yourself and everyone around you, “What is your tax philosophy?” Mine is borrowed from the economist Adam Smith who said in the late 1700’s, “the goal of taxes should be to remedy inequality as much as possible.”

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