Tax System Needs Overhaul to Be Fair to All Taxpayers

Much has been written about taxes, mostly about how much they can be reduced and for whom, but far less about the winners and losers from the tax cut frenzy we have witnessed these past few years.

In my opinion, the average tax payer generally loses with tax cuts even when there are budget surpluses. Let’s start by looking at tax fairness and how the wealthy have fared during the most recent tax cut frenzy. The super rich have seen their wealth increase while the rest have gained little or even lost their source of income altogether. Millions have lost their homes. Ask yourself, how have you personally fared with recent tax cuts and how do you see the future for you, for your children and grandchildren? Perhaps more importantly how has our state, local and federal government services fared and how has that affected your lives?

Numerous tax cuts of recent years have been implemented while fighting two wars. During the Iraq war and Afghanistan conflict, we sent billions of our tax dollars to those countries often with no strings attached. Meanwhile, we are simultaneously demolishing our school budgets, closing our public libraries, laying off our teachers, police and firemen, and watching somewhat hellishly as the bottom falls out of the quality of life here in Rancho Bernardo and all around America. Are tax cuts worth all that?

What about fair taxes? According to The New York Times, General Electric is reported to have earned profits of $26 billion over the past five years yet paid no taxes to the IRS and actually claimed credit of $4.1 billion (of our tax dollars) from the IRS. GE is not the only big firm who profits greatly yet pays nothing in taxes and even makes claim for our tax credits as an added bonus. Bob Herbert wrote in a recent New York Times article, “like greedy children, the folks at the top are seizing virtually all the marbles. Income and wealth inequality in the U.S. have reached stages that would make the third world blush.”

Four hundred Americans, for example, have more money than 150 million other Americans combined, and the richest 10 percent received 100 percent of the average income growth in the years 2000 to 2007, the most recent extended period of economic expansion.

Meanwhile our public servants like millions of other working taxpayers are losing their jobs, their homes and losing hope for their future well being. That is indeed the heaviest of tax burdens of all to pay. Those lucky enough to still have jobs often see their wages and benefits drastically reduced with the threat of job loss ever present. Workers wages have stagnated for the most part over the past 30 plus years or at best have seen only slight income increases. Big banks, which we taxpayers bailed out in the last days of the Bush administration with many billions of our tax dollars, are still living the high life, paying billions in bonuses to themselves while loaning little or nothing to smaller banks that might help boost our economy.

In Wisconsin, Ohio, Maine, Michigan and Indiana, governors are openly attempting to outlaw workers unions, especially those in public service sector. These are our teachers, firemen, police, garbage collectors, street repairmen, prison guards, probation officers, etc. Politicians are the ones who promised wages, pensions and other benefits to our public servants but often failed to fund them. Many politicians diverted money from promised benefits to their political contributors as tax breaks or awarded them lavish contracts, often no-bid contracts. Public service workers make great targets for politicians as public servants must rely on our tax dollars for their income, pensions, and health care benefits and politicians know voters hate paying more taxes than they actually have to. So, public service is not as great a life as some often portray these days.  It’s sad when our public servants suffer so greatly while politicians ignore record corporate profits and dish out huge tax breaks for the wealthiest among us. If we have any hope of retaining the middle class in America as we have come to know it, we must face the fact that taxes will have to increase but they must be imposed fairly.

Keep in mind, it was unions who forged the middle class in America with the eight-hour workday and weekends off, paid vacation, paid holidays, good wages and pensions which allow us to purchase homes and new cars and live in comfort in our retirement years. Unions led the fight for Social Security and Medicare unemployment compensation, food stamps etc. It is those very unions that some politicians in our nation and state capitols are out to destroy today. If unions are destroyed, all current and future workers, both union and non union alike will suffer dearly while the wealthiest among us will continue to prosper greatly.

A final note on unions, Jay Gould, one of the famous Robber Barons of the late 19th and early 20th century once boosted he could hire half his workers to kill the other half. A chilling thought indeed but his kind was tamed a bit through the strength of unions and various state and federal laws unions won protecting the rights of all workers. Sadly, people who think like Jay Gould are still around and we are seeing more and more signs of their rebirth these days. If our economy weakens and our government services continue to shrink and/or disappear, the threat of old could come back to life in the form of even more crippling budget cuts and higher unemployment rates robbing us of any hope for our future wellbeing.  It’s a price far too high to pay, the better and sounder idea would be to overhaul our tax code and reestablish fairness in the system.

Charlie Williams
Chairman, Field Mobilization Committee, Alliance for Retired Americans
Former Regional Director, National Council of Senior Citizens