Solve Our Budget Woes:
Raise Our State Taxes
Nicholas Johnson
Iowa City Press-Citizen, June 9, 2002, p. 9A
As our school district's Jerry Palmer says, "We can't run deficits and we can't print money." Neither can the State.
Cuts are one response.
But why the political and media silence regarding the other option – raising taxes?
We elect representatives to do what needs to be done – including educating us about taxes, even if it means political defeat.
It doesn’t require that much political courage. Ask voters "Do you want to pay more taxes?" most answer "No." But ask, "Would you pay an extra $10 to clean up the state's lakes?" and most answer "Yes."
A friend in Washington, albeit relatively well paid, was lavishly remodeling her home. Untroubled by the cost, she told me, "It's only money. When you run out you just go earn more."
Managing an apartment house and one part-time job didn't pay my college bills. So I got a second job and scholarships. That's what most students did.
Earning more is easy for my friend. Not so easy for those already working two jobs. But the State can “go get more” – tax increases.
Taxes are what Oliver Wendell Holmes defined as, “The price we pay for civilization.” You don’t “cut” civilization.
Of course, not all programs are “civilization.” There are a number of issues.
1. Some state programs could be more efficient and effective. Others abolished. All need regular reevaluation. That includes those of the University of Iowa.
Innovations can sometimes improve service while saving money – whether corporate or public. United Airlines passengers can now handle their own computer check-in. It saves money, speeds the process, and improves the experience.
Schools’ innovative use of computer instruction can save money, improve learning, and enable teachers to work with smaller groups of students.
There are thousands of such win-win options.
Given bureaucracies’ fierce resistance to change, however, it’s sometimes necessary to cut budgets so they have to innovate.
2. State programs that are cost-effective – or essential, effective, efficient and utilizing best practices – should never be cut.
Cutting cost-effective programs, like education, simply postpones and increases costs, like prisons.
Once the citizens of Iowa agree on an essential program’s level of service, and there’s no better and cheaper way to deliver it, taxes should be raised to maintain that level.
3. We’re not over-taxed. Federal and state income taxes in France, Denmark, Japan, Belgium – indeed most countries delivering “civilization” – total 60 to 70 percent. Iowa’s rates are 0.36 to 8.98 percent – substantially less than what you voluntarily tip your waitress. Face it, you get more for every dollar sent to Des Moines than the dollars you spend in a mall that just further enrich a multi-million-dollar corporate executive in New York.
4. Tax and spending equity is another matter.
The crime is not that America's wealthiest violate the law, it is that they write the law. When Fortune 500 corporations get multi-million-dollar "refunds" rather than pay taxes, they are simply enjoying benefits purchased with campaign contributions.
Meanwhile, a worker's total sales, social security, property, income and miscellaneous taxes may constitute a larger percentage of her income than that paid by the owner of the business.
Federal or state, let’s share the tax burden fairly.
5. We’re sending the bill to our grandchildren.
President Ronald Reagan accumulated more national debt than all prior presidents combined. Now we're running deficits again. We've paid for past wars with surtaxes and excess profits taxes – not tax breaks for the rich. We should have pay-as-you-go defense spending today.
Whether it’s federal deficits or postponing state infrastructure expenditures, we’re just passing the costs to our grandchildren.
Don’t let elected representatives off the hook with excuses
about “shortfalls” necessitating cuts. Those shortfalls are the predictable
consequence of their own political cowardice.
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Nicholas Johnson is a taxpayer who lives in Iowa City,
teaches at the University of Iowa College of Law, and maintains a Web site
at www.nicholasjohnson.org.