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TAXING, SPENDING AND PUBLIC PURPOSE

May 19, 2015

TAXING, SPENDING AND PUBLIC PURPOSE

Politicians have found a political battle cry that sells, labeling their opponents as “tax and spend” Democrats (or Republicans, or whoever fits the bill). It is, of course, a phony issue, since all governments tax and spend, as well they should. Taxing and spending for public purposes is what governments do; the political argument has to do with what is an appropriate public purpose and how and why it should be funded from tax revenues.

Government (though the “tax cutters” and “austerity aficionados” are trying to decree otherwise with their incessant propaganda) was never designed to save money; it was designed to spend (or depending upon your definition) invest it. It had and has its own design; it did not and does not fit the corporate template of profit at all costs. It is not designed to make a profit and never was. It is not a business and will fail its purpose if run like one.

Government’s job was and is to raise revenue (taxes) in order to obtain funding to spend and/or invest for public purposes (roads, education, defense, regulation and other such activities grounded in service to its citizenry). Office seekers run on grounds of perceived needs to improve education, roads, aid to municipalities, more or less appropriations for defense, etc. Only libertarian nihilists such as Paul and Cruz could dream up a taxless society, which would if instituted result in a nightmare of chaos as humanity could very possibly and quickly lose social cohesion and regress back to the tribal conflict of our hunting and gathering stage with no political framework and thus no wherewithal or incentive to address common problems either locally or globally – all to an end no one can now predict. Such Alice in Wonderland fantasies by grown and seemingly lucid adults ignore how the real world works.

In short (and unlike for-profit corporations which exist to make a profit), government exists for the purpose of providing services to the people within its jurisdiction and acting for the people as their representative in matters broadly ranging from safe food to trade treaties. Given the foregoing, let’s see how one of the current proposed policy positions plays out “as appropriate public purposes and how and why they should be funded from tax revenues.”

Candidates for national and state executive and legislative offices frequently run their campaigns on a promise to cut taxes, but when elected cut the taxes of the rich and corporate class greatly while perhaps delivering a dollop to the rest of us to keep us quiet, thus reducing the tax monies available for other purposes state and/or national governments need to fund ongoing public purposes (such as education, defense, roads and streets and state and federal infrastructure, disease control, parks, aid to municipalities etc.).

Does cutting taxes on their rich and corporate campaign contributors meet the public purpose test or is it just spending public monies in a giveaway to their campaign contributors? Has the public purpose test in such a situation been met when we know from experience that the public monies thus distributed to the rich and corporate class go not to “trickle down” benefits to the people but rather to executive bonuses, foreign investments in China and elsewhere, increased dividends and capital gains opportunities for shareholders etc.?

Such tax breaks are plainly spending and not investment. The money is spent via giving it to corporations and people who will not for the most part reinvest such bonuses in our economy. Such tax gifts go into the bottomless pit of greed and further enrichment of the already rich and worse, removed from opportunities by government to make desperately needed investments in education, infrastructure etc. for truly public needs and for the benefit of all (even including such already rich beneficiaries of taxpayer largesse). It also gives the lie to the candidates’ campaign harangues against taxing and spending. Such legislators believe in both taxing and spending, so long as they decide who pays the taxes (you and me) and who are to be the beneficiaries of their spending (their already rich campaign contributors).

Theoretically, reduction of income to government caused by such payoffs should be made up by increases in taxes across the board, including relatively higher taxes on those who were recently paid off. However, legislators who just gave away the store dust off their old (and phony) campaign promises to reduce and not increase taxes – and let public services suffer chuckholes, collapsing bridges, uneducated citizens etc. – usually blaming the opposition for such poor public outcomes when they should look into the mirror to determine who are the causes of such devastation to the needs of the rest of us government should be providing.

Thus the legislators who give away the tax store to the rich and corporate class are themselves the “big spenders” they harp about during their campaigns. They are spending our money for no discernible “public purpose” while reducing the public treasury’s ability to fund truly and desperately needed public purposes as we go forward, a double whammy.

So what should be our policy response to fair and equitable distribution of scant public resources? Shall we spend large portions of such tax monies by making gifts to those who neither need nor deserve such public largesse or shall we invest it in our peoples’ education, our infrastructure and their and our future?

I have made my choice. I’ll take investment in our people and our furniture and our future over short-term spending by gift-giving legislators every time. I want a dollar’s worth for my dollar, and giving it away for no return is not my idea of good policy for me or my fellow citizens. We must beware those who talk about “big tax and spenders.” Frequently they are describing themselves as people who prefer spending over investment, a bad choice.   GERALD    E

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