C. Rea: Losing trust in government

The editorial Feb. 8 discusses abuse of the word "politics." Practically every policy position of an opposition party is now labeled “playing politics.” Gov. Paul LePage used the term in his State of the State speech to attack his opponents.

Another misused word in public policy discussions is “fair.” The word gives an emotional charge for those who advocate higher tax rates for those who earn more than a middle class wage.

The correct term is progressive taxation. A progressive tax structure is the concept that those who earn more should pay a share disproportionate to those who earn less.

The New Oxford American Dictionary defines fair first as “in accordance with the rules.” The sentence imposed on an individual convicted of a crime is considered fair if sentencing is in accord with the rules of sentencing. It is not judged to be fair based on what the victim believes to be fair or on the defendant's family's opinion.

An individual's opinion on what tax rate their neighbor should pay should not be the criterion of fairness.

The harm to society is that as citizens develop the opinion that they are being treated unfairly, a feeling of discontent is leading to a lack of faith in public offices, legal institutions and economic systems, resulting in a breakdown of society's trust in government.

I hope we stop hearing the accusation “playing politics” as well as the rabble rousing phrase “paying their fair share” in future debates about public policies.

Carol Rea, Auburn

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Comments

Cathy Russell's picture

Gov't lies

You can bet if we are speaking of politics, it will be filled with lies and smoke and mirrors. It doesn't matter which party. It seems to be a pre-requesite to run as a politician. Why do we elect them? We all hate liars. Why elect them? As far as the job Gov. LePage is doing, I think he is one of the few politicians who is doing exactly what he said he was going to do, hence being truthful. Yet, so many are dissatisfied with the promises he is fulfilling. He is doing his job and balancing the budget. It's too bad that programs get cut however, the bottom line is he is teaching us to live within our means. When I was growing up (poor household mind you with both parents working), welfare was for food. Those who claimed poverty and wanted aid, did NOT have a car. So the Gov is realigning your values and you don't like it? He is doing what he said he was going to do and he is doing it very well! I commend him and a pat on the back, Gov Lepage!

Jonathan Albrecht's picture

No.

"A progressive tax structure is the concept that those who earn more should pay a share disproportionate to those who earn less." No, the concept is that those who use government more should pay more. Wealthy people use government more because it protects property, as it should, and wealthy people have more property than poor people. The departments of agriculture, energy, commerce, and defense are almost exclusively used by the wealthy. Analyze the activities of government and the poor benefit in some very important ways but not nearly to the degree of the wealthy.

MARK GRAVEL's picture

How about we say a

How about we say a progressive tax system is unfair and penalizes success. What is wrong with a flat tax? Now that is fair, everyone pays the same percentage of his or her income.

Jonathan Albrecht's picture

How about we don't

A Flat tax penalizes the poor and middle class.

PAUL ST JEAN's picture

Poor guy earns 15K and pays

Poor guy earns 15K and pays 10% tax, so he pays $1500 in taxes and gets to keep 90% of his earnings.
Middle class guy earns 55K and pays 10% tax, so he pays $5500 in taxes and gets to keep 90% of his earnings.
Rich guy earns 300K and pays 10% tax, so he pays $30,00 in taxes and gets to keep 90% of his earnings.
How does this 10% tax penalize the poor and middle class guys and not the rich guy who just paid out 30 grand in taxes?

MARK GRAVEL's picture

It is all about perceived

It is all about perceived equality and equal outcomes. God forbid the rich guy being able to buy more stuff..... well that is life.

Jonathan Albrecht's picture

The larger the gap between rich and poor, the slower

economic growth is. The slower economic growth is the less we all earn. In 1970's the gap between CEO and lowest paid employee was 40 to 1. Worldwide. Today worldwide its in the same range about 44 to 1. Except in US where it has grown to exceed 500 to 1.

PAUL ST JEAN's picture

Roger that.

Roger that.

MARK GRAVEL's picture

Perhaps only in your view of

Perhaps only in your view of fairness. If everyone pays a flat percentage of their gross income in federal taxes, no exceptions, that is damn fair. It can be measured with a simple equality size – everyone pays the same rate.

Jonathan Albrecht's picture

Hardly

The same rate can have an entirely different effect. A five hundred pound bomb dropped in a corn field not not have the same effect as a 500 pound bomb dropped in a school with a thousand children. Fairness is equal opportunity. Fairness means that an action has the same effect on all people. As we all know, federal taxes are completely unfair and politics (the more money you have the better you are treated) will turn any theoretically fair system unfair after the first session of the legislature.

PAUL ST JEAN's picture

What does a bomb have to do

What does a bomb have to do with three income earners (poor, middle class, and wealthy) all paying a flat income tax rate of, say, 10%. Why is that unfair to the poor and middle class workers if all three are paying the same rate of tax?

Jonathan Albrecht's picture

Need to catch up with the times

Conservative intellectuals have published reports arguing that consevatives need drop the flat-tax, balanced budget admendment, and the gold-standard because they don't work and would lead to the collape of the US.

PAUL ST JEAN's picture

Great non-answer to my

Great non-answer to my question. The problem with ALL self-proclaimed intellectuals is that they enjoy wallowing in their perceived ability to listen to the William Tell Overture without thinking of the Lone Ranger.

Jonathan Albrecht's picture

Sorry you didn't understand my answer

Even conservatives are now admitting that the flat tax is unfair, impolitic, and useless as a political tool and needs to be discarded. The flat tax is not fair because it has a disproportionate effect (the bomb) on the poor and middle class and because its immoral because the rich use the services of government fair more than poor and middle class people; a flat tax leaves the poor and middle class to pay for services delivered to the rich.

PAUL ST JEAN's picture

Jon, with all due respect,

Jon, with all due respect, that is BS. A 10% tax is a 10% tax. Your hot nut for the rich is cutting off your oxygen supply, clouding your ability to see through the fairy dust.
"because the rich use the services of government fair (sic) more than poor and middle class people"... Hard as I've tried, I can't see the common sense logic in that from any angle. Sorry; must be me. One thing is abundantly clear, though. You hate the rich.

MARK GRAVEL's picture

Under a flat tax, no decution

Under a flat tax, no decution tax code, the rich may actually pay more than they are today. I'm with you, Jon is not making sense; he needs to backup his assertions with a few examples.

MARK GRAVEL's picture

Okay, name a few of those

Okay, name a few of those services. It certianly is not welfare.

Jonathan Albrecht's picture

Easy

10% of Americans (top income earners) own 90% of US wealth. US Constitution makes property (although it never says it just like it never mentions slavery (oops involuntary servitude) until the 13th amendment) a primary responsibility of government: Services primarily servicing the wealthy: Department of Commerce, Energy, and Agriculture (all food welfare programs intended to support weathy farmers by propping up commodity prices). The US Department of Defense.US Treasury, FED, Department of Transportation. Just a few. How much they support the rich vs the middle class varies. but they all primarily benefit the wealthy.

MARK GRAVEL's picture

Not so easy because you

Not so easy because you failed to give even one example where those who pay less under the flat-tax method pays for a disproportional amount of service. Saying it does not make it true.

Focus on one service that you listed and show how a poor person, who pays less under the flat-tax, pays a disproprotional amount for the service of your choice.

That said, it is easy to prove that a poor person today, who pays little to no federal tax, uses more services than they pay for - another validation for the flat-tax. It that fair?

Jonathan Albrecht's picture

Flat tax was never a serious proposal

now that even its proponents are saying its time to discard it, discussing it isn't worth the time.

MARK GRAVEL's picture

Perhaps the reason to abandon

Perhaps the reason to abandon it is because politicians lose influence and power over the electorate or corporation of choice without the ability to grant favors through the tax code.

Infuence over the tax code gives great power to both major parties... yet another reason for the flat-tax as Paul and I propose.

Jonathan Albrecht's picture

Can't disagree at all

My proposed tax code is no deductions, no exemptions, no special rules. Income of all sources wherever earned or acquired by whatever method is taxable by subtracting costs from income and then taxing the net at a progressively higher rate to reflect progressively higher use of government services. Which is in effect the current Business Tax model. Also does not give politicians greater power or the ability to grant favors. Although you could quibble that in the case of families and individuals costs could be viewed as the minimum costs to maintain a standard life style be above the poverty line. I could dispense with that easily if businesses were taxed based on gross income not profits.

PAUL ST JEAN's picture

Verbal stunt flying has been

Verbal stunt flying has been elevated to an art form.

MARK GRAVEL's picture

First, we can find

First, we can find “intellectuals” to say anything.

Second, a cursory examination of the national debt says the US is currently on the road to perdition.

Third, any layman can imagine a flat tax that in aggregate produces the same net revenue as the current progressive tax system produces today; that in itself is proof your intellectuals are full of shit.

Fourth, I said nothing about the gold-standard, so I will not address that thrown in comment.

PAUL ST JEAN's picture

Lol....Your choice of words

Lol....Your choice of words is admirable.

Jonathan Albrecht's picture

I didn't thrown anyting in

The gold standard is a Republical goal; the conservatives mentioned it; If I hadn't included it you'd write that I was taking the intellectuals out of context.

Let's look at the facts, I know you'll just deny the obvious;

Percentage of GDP
Year Federal Total revenue Federal Spending National Debt
1950 14.4 ~30.0 91.2
1960 17.8 ~30.0 54.6
1970 19.0 ~31.0 36.2
1980 19.0 ~32.0 33.4
1990 18.0 ~36.0 56.0
2000 20.6 ~32.0 57.6
2010 15.8 ~40.0 93.4

We have had this much debt in the past. Its a problem, not a crisis. Its easy to see that Federal Taxes radically declined from 2000 to 2010 by almost 1/4 and are well below (12.7%) the historic average from 1950 - 2000. Spending is stable from 1950 through 2000 with only the 1980's seeing a significant increase in spending and an explosion of debt. Then again in the 2000's we have a explosion of spending, a radical reduction of revenue, and an explosion of debt. Due to Republican Presidents and their specific proposals.
So the solution is obvious return Federal revenues to the historic average - increase taxes by about 13% and reduce spending by 20% or increase growth by that amount or less. President has proposed balance - tax increase equal to spending cuts and increased investment to spur growth. Sounds right on the money. If we can just keep a borrow and spend Republican out of the White House long enough.
Any layman can imagine a flat tax; but that doesn't make it true or fair just consistent with conservative economic principles - all imagined.

MARK GRAVEL's picture

What part of point four did

What part of point four did you not understand? Perhaps someone else will be interested in reading your off topic comment.

Jonathan Albrecht's picture

sorry the chart doesn't line up well

but you can still make it out.

PAUL ST JEAN's picture

In order for a flat tax to

In order for a flat tax to remain fair, though, wouldn't ALL exemptions and loopholes have to be abolished?

MARK GRAVEL's picture

Yes, no exemptions. Moreover,

Yes, no exemptions. Moreover, no employer withholding. Each individual must write a check each quarter for the taxes they owe. This way people will know how much they pay in taxes, and hopefully they will understand the more stuff they want from Government, it will cost them.

PAUL ST JEAN's picture

Although the Pirate readily

Although the Pirate readily sees the purpose behind having each taxpayer write a quarterly check for the taxes they owe, that part of the plan would fail miserably. Taxation must be confiscatory in order for it to have any chance at continuity. Voluntary payments won't work; the taxpayers won't pay voluntarily; it's that simple. Would you? The Pirate wouldn't. There would be a universal game of hide and seek between the IRS and the taxpayers. The parrot is totally in favor of your version of the plan, although he doesn't know a tax from a tuxedo.

MARK GRAVEL's picture

First, a large majority of

First, a large majority of Americans have to write that check today. We call it paying estimated taxes. Every self-employed individual must do it. While I agree that all taxes are confiscatory, your premise that people will not pay is not grounded in imperial, observable, and contemporary behavior.

The takeaway is that if people have to right that check each quarter, they are more apt to see what new government program will cost. We could speak in well understood terms, like that program will cost you an extra $0.10 on every dollar you earn for example.
The goal is to make runaway spending self-limiting – everyone working individual pays.

PAUL ST JEAN's picture

My premise is grounded in

My premise is grounded in good old human nature; pay only if and what you must. If people displayed a willingness to pay voluntarily, the IRS would not be necessary, would it? Why do you suppose oBAMa has hired 14,000 additional IRS agents to handle the obamacare fiasco? Because he knows voluntary compliance won't happen.

Jonathan Albrecht's picture

You are right but then you wonder off into a dream world.

Mark's wrong. Federal taxes will never be paid voluntarily as the recent off-shore scandals an UBS and other banks proves.

The IRS has not hired 14,000 additional IRS agents to handle Obamacare. The IRS had about 97,000 employees in 2001. It had about 97,000 employees at the end of 2012. The IRS budget was cut in 2012 by 2%. Its similiarly cut this year. And the sequester will cut it even further. Now just so you don't think I cherry picked the numbers. IRS employment has ranged between 2001 and 2012 from over 100,000 to as few as 92,000 employees.
Usually people use the completely fictious number of 16,000 or 16,500. Both were inventions of a Republica report back in 2009 which hs been debunked by everything including Congressional testimony.

MARK GRAVEL's picture

“Mark's wrong. Federal taxes

“Mark's wrong. Federal taxes will never be paid voluntarily as the recent off-shore scandals an UBS and other banks proves.”

Really? The fact the thousands of, say, small business owners file quarterly taxes each year does not have any bearing on your above statement.

That is, thousands of people will pay their 2012 taxes voluntarily. I think some introspection on your logic is necessary here.

How can you say something will not happen, when we can observe it happening – amazing.

Jonathan Albrecht's picture

So you deny that millions of Americans engaged

in fraudelent schemes to avoid paying taxes. And you suggest that millions of small business owners submit truthful income estimtes. Selective naivete.

MARK GRAVEL's picture

Let’s stay focused. I

Let’s stay focused. I rebutted your all-inclusive statement that no one will pay taxes. I said nothing about the fact that some people cheat on taxes. The root locus is your statement that no one will pay taxes is wrong. Nothing more, nothing less. It is the only topic I addressed – period.

MARK GRAVEL's picture

We are probably splitting

We are probably splitting hairs on the parrot’s ass, but here is what you said:

“the taxpayers won't pay voluntarily”

A more correct assertion is that “SOME” (not implied all as you wrote) taxpayers will not pay voluntarily, such as it is today. Some do, some don’t and some do incorrectly.

PAUL ST JEAN's picture

Fair 'nuff. I stand

Fair 'nuff. I stand corrected. The parrot sez if we wish to continue splitting hairs, we should pick the ass of some other bird. Something to do with his right to privacy, guaranteed by the Privacy for Parrots Act of 1846 enacted by President James K. Polk in an effort to quell an uprising of multi-colored birds in Barbados at that particular time.

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