Charleston Gazette-Mail – Just like voting, paying taxes is a civic duty and a shared expression of our representative democracy. Our taxes allow us to achieve together what any one of us would never be able to accomplish individually or through charity. Link to article.
Inscribed above the entrance of the Internal Revenue Service building in Washington, DC is a quote from former Supreme Court Justice Oliver Wendel Holmes that says “Taxes are the price we pay to live in a civilized society.” As folks scramble to file their taxes today, it is important to keep this in mind even if things feel less civilized than they used to.
Taxes not only power our democracy, but they provide a foundation upon which our liberty and freedom rest. Taxes build our roads and bridges. Taxes save lives by providing health care and discouraging people from smoking. Taxes give our children an education and ensure that hungry bellies don’t get in the way of learning. Taxes pay firefighters and social workers. Taxes fuel innovation by providing money for basic research, such as the parts of the smart phone that make it smart, including GPS, the Internet, touch screens, voice recognition (Siri), and Google’s search engine algorithm.
While taxes have done all of these good things and more, they are also contributing to growing economic inequality — as the rich are not paying their fair share and have taken their winnings to buy more political power. According to a recent Fox News poll that asked people what bothered them about taxes, nearly three times more people are bothered by the rich not paying enough in taxes than are bothered by the amount they themselves pay in taxes. And they are right to worry—a 2016 US Government Accountability Office report found that roughly one-fifth of large profitable US corporations paid no income taxes (think Amazon), and in 2015, twenty-seven of the S&P 500 corporations received a tax refund.
West Virginia, like many states, has an upside-down tax system where low-income families pay more in taxes as a share of their income than the rich. According to the Institute of Taxation and Economic Policy (ITEP), families with incomes below $30,000 pay over 9 percent of their income in state and local taxes in West Virginia while the top 1 percent — with an average income of over $700,000 — pay just 7.4 percent. Not only does this worsen economic inequality, it also reinforces and deepens racial inequities, since households of color are more likely to have low incomes.
The widening inequality reflects political choices made in Washington, DC and in Charleston. At the federal level, we’ve raised payroll taxes while lowering taxes on capital gains, corporations and the wealthy over the last 40 years — not to mention the Trump tax cuts where the richest 20 percent received 71 percent of the tax cuts. Over the last decade our state Legislature has shifted tax responsibilities away from corporations and onto individuals by reducing the corporate income tax, eliminating the business franchise tax, and more recently reducing the severance tax rate for steam coal. At the same time, they’ve increased taxes on tobacco, gas, and online sales, which all hit low-income people the hardest.
Fortunately, it doesn’t have to be this way. We can have a fairer tax system that creates broadly shared prosperity, reduces gender and racial disparities. Closing tax loopholes, reenacting the Estate Tax, and ensuring that the wealthy and corporations pay their fair share, while implementing policies to help working families like a state Earned Income Tax Credit, affordable child care, and debt-free college education will help to get us there.
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