Thursday, April 21, 2011

Taxes and the Commons Series: Tax Cheats – and even some of their critics – miss reason for the season

Tax Day has come and gone once again, and this year the big story was GE’s tax avoidance strategies. It’s a familiar meme that seems to get recycled in the public discussion about taxes around this time every year, just note the consistent spike in “corporate taxes“ google searches.

There’s no doubt that corporate tax avoidance schemes are a problem, but the solution is probably going to be more complicated than closing tax loopholes and shelters. After all, the ways GE plays the tax game isn’t limited to shady accounting practices. Corporate America lobbies aggressively for tax policies that favor their interests; like the “active finance exemption” that costs us $9 billion in lost revenue. They hire former IRS and Treasury staff willing to figure out better ways to cheat their former employer. And even if for one month a year the media beats up on them about how low the actual tax rates are for corporations, the other 11 months the media does the bidding of their corporate sponsors by parroting myths about “high” tax rates and defending the legality of their tax shelters and loopholes (as in this MSNBC clip below).

Unfortunately some of the populist outrage about GE and the other corporate tax cheats actually reinforces the demonization of taxes and serves the interests of the corporations and the super-rich who have their own tax breaks and tax-avoiding strategies. The “make them pay” argument seems to rely on people’s own resentment about paying taxes. Surely, the anger about regular people being left with the bill of keeping our government running while rich corporations find every way possible to avoid contributing to our society is useful for organizing – and we’ve seen lots of creative actions these last few weeks, but tax season should be celebrated.

We need to cultivate a more fundamental ethic of the value of paying taxes. Faithful people don’t complain about their weekly offering at church – and I know that it’s not a perfect comparison for people from traditions where offerings are completely voluntary and secret, but in other churches donation goals are set for members by the pastor and the offering plate gets passed around as many times as it takes to hit the goal for that Sunday. In the same way that people live out their faith and values by sharing their wealth, our taxes are a demonstration of our commitment to the success of our community and nation. Corporations and the rich should have the same commitment to our nation, commons and collective well-being as the rest of us.


Anonymous said...

FYI, the top 10% earners pay over 58% of all Federal Income taxes.

Caroline McAndrews said...

And yet their tax rate continues to go down: