Tag Archives: tax policy

Happy Tax Day!

I’m keeping it short this year and, thanks to my oldest son, sweet.

Sometimes, maybe we just need to see things through the eyes of a 7-year-old.

In this case, a 7-year-old who was standing in the toy aisle with his hard-earned allowance, contemplating how much he had to spend.

He had already noted that the trademarked Legos cost more than the ‘regular’ sets because, as he pointed out, “they have to split the profits three ways: George Lucas, Lego, and Target.”

Yes, son. You’re right.

Now, he was adding up the prices on the smaller sets he had selected. The total came to about $16, and he had $20 to spend.

His younger brother tried to add a Lego minifigure ($2.99) to the pile, but Sam stopped him.

“Ben,” he said, “We have to leave enough to pay taxes.”

When a 5-year-old’s protest started, Sam responded, “Who do you think pays for the sidewalk you ride your scooter down? Or the library where you check out those Captain Underpants books? We all do.”

True that, second-grade wisdom.

True that.

Whither the American Dream? Not on our watch.

It is, of course, not enough just to catalog the way that U.S. social and economic policies are imperiling the American dream.

We have to stop it.

That will, of course, take a movement, since, on our own, we tend to respond to the confrontation of so much that’s wrong with a disengagement, what Ernie Cortes calls the axiom that “powerlessness also corrupts” (p. xviii).

But, together, we could have what Smith calls an ‘army of volunteers prepared to battle for the common cause of reclaiming the American Dream” (p. 425).

That will take changes to the way the system works, maybe with mandatory voting, so that elected officials would know with some certainty that they would face the wrath of the entire electorate if they fail to vote the interests of most Americans (p. 417), and certainly with campaign finance reform. We likely need to rethink the role of political parties (p. 414), and there is certainly evidence that Senate rules have outlived their usefulness (p. 322). There is evidence that members of Congress tune out the opinions of average Americans when voting on legislation, especially when powerful financial interests get engaged (p. 135). But they wouldn’t–they couldn’t–if we change the terms of engagement.

Shifting these terms of engagement could result in real changes in the distributional policies we pursue, including reductions in military spending so that we can reinvest in U.S. infrastructure and opportunity, what then-candidate Obama described as “fighting to put the American Dream within reach for every American…for what folks in this state have been spending on the Iraq war, we could be giving health care to nearly 450,000 of your neighbors, hiring nearly 30,000 new elementary school teachers, and making college more affordable for over 300,000 students” (p. 373). But we’re not. Yet. And that has to change. Dwight Eisenhower knew that “to amass military power without regard to our economic capacity would be to defend ourselves against one kind of disaster by inviting another” (p. 353). Another case of a Kansan who got it right.

And we need new tax policies. Really. Our tax policies are the opposite of what Americans really want, what some economists consider “the most political law in the world” (p. 106). We need new estate tax policies, to start, and to eliminate the earnings cap on Social Security. Achieving some victories like that could, perhaps, get more Americans to see how much tax policies matter, to build momentum for even bigger lifts.

Truly, there’s so much that needs to be fixed that you can sort of take your pick about where we start, in terms of substantive policy changes.

What is even more important is the strategy. That’s why, when I heard this piece on NPR during an early morning workout, I was struck by the quote at the very end.

It’s going to take a revolution.

But isn’t a dream worth fighting for?

501(c)4s: Serving a valuable public purpose

I have to get back to the hard work of coming up with my own content next week (!), but here’s one more borrowing from a really fascinating conversation on the New York Times opinion page, about whether the controversy over the IRS’ additional scrutiny for Tea Party and other conservative groups suggests that 501(c)4 organizations do not actually serve a legitimate public good and, therefore, do not deserve tax-exempt status.

You can read the debate for yourself, but I certainly agree with the commentator who argues for preserving the tax status of 501(c)4s, stating noting that, while organizations like The Sierra Club and AARP “are too politically engaged to be charities, yet they work toward what each believes will be a better world.”

But I think the larger question is this:

Why are organizations like AARP too politically engaged to be charities?

Why do we have such strict limits on nonprofit political engagement that we are so quick to rule that an organization that undeniably serves a public purpose–even if I do not happen to completely agree with that vision–are not ‘charities’?

In debating whether organizations should be allowed to organize themselves as 501(c)4s, and whether that is a valid and valuable designation in our tax system, are we really asking the wrong question? Should we really be considering whether we unduly muzzle our 501(c)3 organizations, pushing, then, organizations clearly operating in the public good into the (c)4 realm, distorting that category and, maybe, making it more vulnerable to distortion, then?

I absolutely believe that public interest lobbying and political engagement are not only legitimate activities but, indeed, completely essential to the functioning of our democratic system, at least as currently structured. I believe that organizations should receive some harbor within the tax code for taking on that valuable work.

But I also think that fighting to end hunger is just as noble as handing out food, that working for better health care laws is just as important as taking care of those who are sick, and that speaking out about gender inequality is just as needed as sheltering those fleeing domestic violence.

If we agree, then maybe we need new provisions in the tax code to allow individuals who financially support that important work to receive the same tax advantages of those whose dollars fund more immediate relief.

Valuable public purposes all
, no?

Not paying enough today

This is what taxes look like in Kansas now:

kansastaxes
Image credit, Think Progress

Hence my complaint:

I am not paying nearly enough in taxes today.

In addition to the lower rates enacted in the massive tax cuts in 2012, there is the fact that I don’t pay nearly as high a percentage of my income in sales taxes as do lower-income households that consume more of their income. And the tax deductions I get to claim for my homeownership (although Governor Brownback wants to eliminate those, in order to help close the budget gap), and for the contributions I make to my children’s college savings account (thereby, really, reaping state subsidies for my children’s future educational advantages). Those are worth thousands of dollars, and I never have to take a drug test for those public benefits.

But it’s not only not enough as a percentage of my income; that part more just chafes at me, because it doesn’t seem fair that we make quite a bit and pay not so much.

It’s not enough in terms of what we really need, and what our state will have to go without.

I don’t pay enough in taxes when I have to turn around and write checks to our public school so that my kids can have a counselor a few days a week, and so that there are adequate supplies in the classroom.

I don’t pay enough in taxes when I hear that our community mental health centers have waiting lists for crisis appointments.

I don’t pay enough in taxes when some of our sidewalks, in a very walkable city, are nearly impassable because of needed repairs.

I don’t pay enough in taxes when we’re not investing what we must in the commons, and in our collective well-being, such that we then retreat into our private realms, where we finance what we can out of all that is left.

It’s tax day, even if it doesn’t really feel like it. We have work to do, so that this can be a day of celebration again.

The charts that are shaping U.S. economic policy. April Fool.

My oldest son has big plans to switch my toothbrush with my husband’s today, so we’ll see how that works out. Hijinks, people, big time.

But nothing compared to the surreal experience of watching policymakers make economic policy based, apparently, on fairly little understanding of actual economic realities.

If you haven’t seen them already, take a look at the Economic Policy Institute’s ‘top charts’ for 2012. These are the sets of economic information that, in a perfect world, would be driving U.S. policy decisions about social spending, infrastructure, entitlements, and, of course, tax policy. Of course, I think life would be better if the good folks at EPI got to run a lot more of our social policy.

Here are some of my favorites:

What are we going to do to get these lost generations reengaged in the labor market? What does this mean for my graduating students? For the concept of ‘retirement’ in the years to come?
epi2

Seriously. We make way less than $250,000 per year, and I still feel super economically privileged. I know my kids will be able to go to college. We own a home. I can buy something ridiculous at Target without flinching, for crying out loud. Economic security for the real middle class, and let’s be real about who we’re talking about.
epi4

A social problem we don’t define as ‘problematic’. There is such a thing as ‘too much’, not just ‘too little’. Both extremes matter. A lot.
epi5

Cuts in government spending aren’t victimless. More efficiency doesn’t necessarily yield a stronger economy.
www.epi.org

It’s going to take a long time to claw back from this kind of devastation. And, the subtitle: those who started with less end up with…way less.
epi3

And here’s the not foolish part: we need to advocate to shift the policy conversation so that these are the figures that are animating the debate. We need economic policies that don’t make us slap our foreheads.

We need to not feel like April fools.

Voting, and “our interests”

In class a few weeks ago, I acknowledged, in a discussion about the massive tax cuts enacted in Kansas this year, that my family’s own tax bill will be reduced–probably pretty considerably–under the new legislation. Combined, we make enough to be in an upper-income bracket, and what we pay each April will drop.

One of my students, then, asked, “So why don’t you support the tax change, if it’s going to mean more money for your family?”

I started to answer my student with a somewhat reflexive response about the importance of the infrastructure, and why I am ideologically committed to public education, and even what the erosion of public support for higher education would mean for a sizable piece of my employment.

But then I stopped.

And thought.

About economic ‘self-interest’. And social work values. And why I vote the way I do.

And, really, it’s about this:

“The good we secure for ourselves is precarious and uncertain until it is secured for all of us and incorporated into our common life” (Jane Addams).

I chose it as the header for this blog for a reason.

I don’t believe in a ‘last one in shut the door behind you mentality”.

I don’t think that providing a ‘good quality-of-life’ for my kids is just about making sure they have money in the bank. Or even food on the table.

It’s about what we stand for together, what we consider ‘ours’, and who we consider to be part of our ‘we’.

It’s about what we’re willing to give up, in order to help others get what they need.

Not because we want to be ‘nice’ or generous, not really.

But because I believe that’s where real security and comfort and health come from.

Even if it costs me.

Why a safety net still matters

I’m giving a presentation tomorrow on the safety net–what it is, how it is threatened, and why it should matter to all of us.

If you’re in the Kansas City area, you should totally come.

Much of the presentation is evidence on what we know to be truths: the safety net has too many holes–and people are falling through; the short-term effects of the recession and the longer-term reshaping of our economy place increasing strains on the safety net; and the safety net’s reach is inadequate to cushion all those who really need it (because benefits are too meager and eligibility criteria too tight).

I trace the origins of these threats to the safety net to an overlapping set of ‘culprits’: tax cuts that erode the revenue foundation, the budget cuts we have chosen over other alternatives, the preference for privatization and block grants instead of entitlements, the recession and its exposure of the fragility of the safety net, and the overt attacks on the poor (more on that tomorrow!).

But the piece that I think may have the greatest impact on the audience is my contention that part of how we get to a better place is by celebrating the safety net and all that it does for our society.

Yes, we absolutely need to put the safety net in its proper ‘place’ in our economy. We need good jobs that pay well, and the safety net should be a place of refuge, not a way of life. No one grows up dreaming of the day when they can receive emergency food assistance.

But the safety net, when it’s structured appropriately and (critical point) funded adequately, really works.

That’s something that often gets lost in the rhetoric (from one side) about a ‘Food Stamp culture’ (what, in the world, that is, I do not know) and (from the practitioner side) complaints about the gaps and their failures.

But we cannot save that which we are always so busy complaining about.

So understanding, and, yes, celebrating, the role of the safety net is important. We know a lot more today about the impact of safety net programs, because of the Supplemental Poverty Measure. And we need to start sharing what we’ve learned.

  • Without government assistance programs, the poverty rate would have been nearly twice as high in 2010:  an estimated 28.6 percent, compared with the actual figure of 15.5 percent.  If the safety net hadn’t existed, another 40 million people would have been poor.
  • The number of young adults with private health coverage has risen by ~2.5 million because of the Affordable Care Act.
  • In 2009, the Kansas EITC returned more than $81 million to low-income Kansas taxpayers.
  • Despite increased poverty and unemployment, hunger did not increase during the recession, largely due to investments in SNAP.
  • Social Security lifts more than 20 million Americans out of poverty, including more than 128,000 seniors in Kansas and more than 1 million children nationwide.
  • Federal rental assistance programs lifted about 3 million families out of poverty in 2010.

We know, of course, that these data are only part of the equation, though. What are your stories about why the safety net matters, and what stories do you believe we need to tell, about why there should–really–be something to catch people when they inevitably fall?

Taxes Matter. For Real.

Source, The New York Times

I love those moments in class when you can almost see the lightbulbs going off for my students, when something clicks in a way that you know means that they not only know more, but really understand more, and that that understanding will influence the way that they practice social work.

It’s a beautiful thing.

It’s tax time.

Or, here at Classroom to Capitol, the time each year when we celebrate all that a robust public infrastructure and strong social contract can do for us.

They’re basically the same thing.

And so this year’s reminder that taxes matter come from my students, and from one of those lightbulb moments, when a woman in the back of the room raised her hand and asked, “Why do all of these charts about income inequality start in 1979? What changed in the 1980s that made such a difference?”

And we talked about Reagan.

And about taxes.

And the class grew animated as, together, they realized that we make intentional choices about how we want to redistribute income, or not, and that those choices have lasting repercussions.

And that, if we’re not careful, we can forget how we got here, and start thinking that, for example, a rising income gap is “inevitable”, when we know that it’s anything but.

Here in Kansas, there has been a lot of talk this year about taxes–what kinds we have, how many of them, how much they should raise, and, of course, what we should do with them. It’s a discussion that is unfamiliar for many social work advocates, but it’s one that sorely demands our input, because the past 30 years don’t lie: not all taxes are created equal.

On this tax day, when you’re done celebrating how wonderful it is to live in a place where most people pay their taxes because we mostly still believe that having government services is important, take a minute to think about how the charts might look different if we’d made a different set of choices. And about how we could bend those curves still today.

And about the fact that, for real, taxes matter.

Why do big tents so often fall down?

Over the past several months, I’ve had the opportunity to work with some really committed advocates–super smart and dedicated people who are working extremely hard to protect their clients and the programs that serve them, in a climate of drastic budget cuts and an eroding social contract.

It’s soul-sucking work, and we’re losing many, many more battles than we win.

Lately, though, some of us have felt like we’re really fighting the wrong battle. Or, more accurately, battles.

It’s not just the old “divide and conquer” problem–the fact that social service advocates are vulnerable to intra-skirmishes that distract us from the real enemies and make it easier for those same opponents to play us against each other.

It’s also that we deliberately avoid taking on the real struggles, and even sometimes miss noticing them altogether, because we’re trying to contain debates that we can really only hope to dominate if we act collectively.

Here’s how it looks in real life:

In Kansas, advocates spent all last year fighting against budget cuts in different program areas–mental health, public education, child welfare, senior services. And all year, the Governor and some legislative leaders hinted that their sights were really set on a policy battle far larger and more fundamental to our state’s well-being: the revenue foundation that shores up (or doesn’t) all of those programs and far more. For the most part, they have not encountered much effectively organized opposition. From my conversations with at least some advocates, it seems that many hoped that not antagonizing the Administration on that issue would, somehow, preserve some access and influence that they could use to defend their work and serve their clients.

So, in essence, we’re sitting on the sidelines while our fates–for the next several years–are decided.

Because, of course, if the Governor and his allies are successful in eliminating the state income tax, they won’t need to legitimate their budget-slashing goals at all: there quite literally won’t be enough money to fund any of these programs, and so advocates will be fighting over crumbs.

If the failure to build a sustained, strategic, progressive coalition to take on these more global, structural issues was just a logistical one (getting people together across distance), or just jurisdictional (getting people to set aside their competition with each other), or even just a problem of capacity (people not having enough resources to take on a fight this big), then I feel like we’d know better how to start addressing it.

After all, those are the kinds of challenges that we overcome in our organizing every day.

But the real reason that building this kind of “big tent” is so hard, I think, is that too many awesome advocates think it’s a bad idea–that taking on these common concerns dilutes their influence and compromises their positions. And so we have to overcome not just inertia but entrenched resistance, and we’ve got to do it without being able to offer any guarantees that their concerns aren’t, in fact, totally well-founded: this Administration absolutely does box out those who oppose them.

But advocacy isn’t about tallying the numbers of wins v. losses.

It’s about how we can build movements that shape how people see themselves, and their worlds, and about how we can change even the debates about the policy challenges we confront. It’s about being in the arena, even if we emerge somewhat bloodied.

And so we can’t afford to sit out the really, really big fights, and we can’t presume that going it alone is ever safer.

There are some battlefields on which we just have to be willing to make a stand.

And there is solace in solidarity.

Go Ahead, Raise My Taxes

It’s a good thing I’m already pretty comfortable with controversy.

Because this one is even unpopular with my own husband, who’s rather notorious for being SUPER easy to get along with (convenient, hunh?).

I am completely okay with paying more taxes.

I’ve actually told a financial advisor that I don’t appreciate his advice about how to shift investments to minimize our tax “burden”. I once delayed buying clothes for my daughter until after the sales tax holiday had ended. And I got into a long discussion with my oldest son in the Lego aisle of the toy store about why sales taxes are included in the total cost of the purchase, and why we have to account for that in deciding how big of a set we can get for his birthday.

This year, with all of the discussion in the Kansas Legislature about eliminating the income tax and “replacing” it with an increased sales tax, I’ve only increased my resolve about the inadequacy about my current tax rate. To me, paying taxes is an investment in the kind of society I couldn’t hope to buy for myself–safe roads, good schools, wonderful libraries, vibrant public parks–and also a reflection of the success my family didn’t necessarily earn but somehow still enjoys.

Because, in a truly progressive tax system, paying more taxes should be a mark of achievement.

How is that a burden?

And my final reason for being totally okay with my tax responsibilities? It’s a sort of extra license to complain, I guess. I certainly don’t agree that only those who are net taxpayers have a right to participate in collective governance–democracy shouldn’t be ‘pay-to-play’–but I do feel quite justified in articulating my opinions about how public funds are spent, because some of those public funds are mine. How would I have time to advocate effectively if I was busy trying to find ways to weasel out of my financial obligations to the commons? And, yes, it does feel like weaseling to me.

Of course I wish that I had more disposable income.

I just don’t wish that nearly strongly enough to walk away from my principled belief that there are many goods in our society that would not be nearly so “good” if not shared in common.

I’m proud to play a part, albeit smaller than I wish, in funding that commons.

So, not in my name, Kansas Legislature. Not in my name.