Thursday, April 7, 2011

Taxes and the Commons Series: Shared Sacrifice

From the time I was about 9 years old, I did small jobs for neighbors to earn money.  I mowed lawns in the summer, shoveled walks in the winter, cleaned houses, babysat, and then as I got older, worked as a waitress and cashier in a restaurant.  My family did not have money, and I learned early on that if I wanted something,   I needed to work for it.  I saved most of the money I earned all those years for college and actually had a tidy amount to put toward tuition and books when I finally left home.  Most of the kids I grew up with did the same—we thought nothing of it.   We did not use this language of “austerity” or “shared sacrifice” that informs budget discussions today but we actually practiced it.  Because most of the families in my neighborhood went between “struggling” to “getting by” to “doing OK” and back again, we also helped each other.  The boys up the street knew a lot about bicycles and could find and patch a hole in an inner tube in about 15 minutes.  I read very well and could help with homework so we could all get to work or play faster.  

I am not nostalgic for my childhood, and I don’t look back at those times as the “good old days.”  But I am grateful that I know what austerity and sacrifice are, so I can recognize it when I hear about it on the news. 

Here are some shared sacrifices I would like to see, as suggested by the Center for American Progress:
  • How about if people with vacation homes could not deduct their mortgage interest?  This would generate almost $9 billion over ten years, so that people needing low income housing could actually have it.  (The cut to low income housing programs is $8.9 billion).
  • What if Congress had not extended the Bush era tax cuts for the top income brackets?  That would have generated $42 billion a year, almost enough to save all the programs currently at risk; the total cost of which is $42 billion.  (To name just a few of these programs:  early childhood, WIC, job training for unemployed, Low Income Home Energy, or LHEAP grants, community health centers, legal services for the poor, and Title X Family Planning.) 
In a new report by Chuck Collins, Sam Pizzigati and Alison Goldberg, the following policy suggestions are made.  Taken together, they would boost revenue by $4 trillion over the next decade.
  • Close overseas tax havens ($90-100 billion)
  • Add new tax brackets for households with more than $1 million in annual income ($60-80 billion)
  • Institute a modest financial transaction tax ($150 billion)
The report shows how America's increasingly concentrated income and wealth, coupled with historically low effective tax rates on the richest households, are fueling the deficit.  For example, if U.S. corporations were taxed at the same effective rate that they paid in 1961, the additional tax revenue would total $485 billion.

Shared sacrifice?  I am not seeing it, unless one defines this as the super rich and corporations sharing in sacrificing the majority of Americans, particularly the poor, toward their own unending need to concentrate wealth in a smaller and smaller number of hands.

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