Why Taxes, and Tax Breaks, Are Part of American Democracy
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Paul Solman answers questions from the NewsHour audience on business and economic news here on his Making Sen$e page. Here is Wednesday's query, a comment sent by a viewer from Kansas:
Barbara Penn: Hello Paul. I believe there was a mistake in your reporting. Charitable deductions, itemized deductions and exclusions don't cost the government anything. It isn't the government's money in the first place. Will you please consider this when reporting on this topic again? Thank you.
The mistake, if I understand you, is that tax breaks in general do not "cost the government" because taxes in general do not belong to the government "in the first place." Instead, they belong to you and me, among others.
But by that logic, the services supported by that tax money do not belong to us, but to "the government"? So let me get this straight: there's an entity called "the government" that exists independently of us? It takes our money. And then it does what with that money? Play PowerBall? Burn it in effigy? Give it to aliens?
Actually, doesn't it give the money BACK to the people it taxes? Not always efficiently, I've noticed, as I'm sure you have. Corruptly, even, every once in awhile. But you there in Kansas get nothing for your taxes? No Medicare? No storm warnings? No disaster aid? If Canada should invade, will the army not come to your defense?
In researching a response to your email, I discovered that, according to data from the IRS and Census Bureau, as compiled by The Economist magazine, Kansas paid $307.1 billion in federal taxes in the years 1990-2009. How much did the federal government spend on goods and services provided to Kansas? I wondered. $331.7 billion.
By contrast, those of us here in Massachusetts (where I reside) paid in $1.065 trillion and got back $917.9 billion over that same period. So some of my tax money has been going to you. Borrowing from Paul to pay Barbara, you could say.
It may surprise you to learn that this does not upset me. In fact, it conforms to my understanding of how the U.S. is supposed to work. You and I vote for people to represent us in "the government." We delegate to them the responsibility for making rules and enforcing them, for keeping us together -- no easy task -- as a functioning society.
Some of us pay more; some, less. An imperfect system, to be sure, filled with details that annoy some people, infuriate others. But you would agree, wouldn't you, that humankind has been hard-pressed, historically, to come up with anything better?
I guess there is a fundamental unfairness: you in Kansas have less than half the number of Americans living there than we do here in Massachusetts, yet you have the same number of senators. But that's part of a compromise on which the country was established -- an attempt to make sure that minorities like Kansans were protected from the potential tyranny of a central government.
So I have, as you can see, considered your correction. I consider it an insult to the concept of American democracy.