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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Tax Reform Can Add Leverage to Dem Agenda

For your tax day reading pleasure, Alternet features a trio of articles illuminating the partisan and gender bias that undergirds the tax game and the political spin that keeps it afloat. Start with Lucy Komisar’s “How Tax Cheats Are Using Your Money to Fund Republicans,” which spotlights the shenanigans of one of the ’04 swift boaters and includes such nuggets as:

Every major private banking department offers a product called the “private placement offshore of variable annuities.”…According to the IRS, business executives have used such shelters to evade taxes on $8 billion in income. Assume that means “at least.” And that’s just one swindle in the panoply of tax cheating which the IRS says contributes to the loss of $40 billion to $70 billion a year from individual use and $30 billion from corporate use of tax havens….16.2 percent of the private wealth of North Americans, $1.6 trillion, is held offshore. The overwhelming reason for that is tax evasion.

Komisar also discusses a promising tax reform proposal, Stop Tax Haven Abuse Act (S-681). Moving along, check out Martha Burk’s “How the Income Tax System Shortchanges Women,” reprinted from MS Magazine. There may be an angle here for Dems looking for ways to mine the gender gap. As Burk explains:

Taxes are something women and men face with unequal pain, let alone gain…For example, a married couple faces a “marriage penalty” if their two incomes are similar and they file a joint return, since the second income (usually the wife’s) is taxed at a significantly higher marginal rate than if she filed as an individual. But if a couple forgoes the wife’s second income (or if one person’s income is appreciably lower), they may pay less as joint filers than they would have as singles (the marriage “bonus”). Both situations can reduce the incentive for a married woman to work outside the home.

Interesting take, and Burk offers five corrective reforms that merit consideration. It takes a lot of spin to to keep an unfair system afloat and it’s going to take a lot of reframing to get it fixed. Who better to lay it out than George Lakoff and Bruce Budner, whose “Progressive Taxation: Some Hidden Truths” makes this distinction:

America’s government has at least two fundamental functions, protection and empowerment. Protection includes the police, firefighters, emergency services, public health, the military, and so on. Empowerment includes the infrastructure needed for business and everyday life: roads, communications systems, water supplies, public education, the banking system for loans and economic stability, the SEC for the stock market, the courts for enforcing contracts, air traffic control, support for basic science, our national parks and public buildings, and more. We are usually aware of protection. But the empowerment infrastructure, provided by taxes, is usually taken for granted, hidden, or ignored. Yet it is absolutely crucial, a fundamental truth about America and why America provides opportunity…This is a basic truth. That is what framing should be about: revealing truths and allowing us to reason using them.

A little wonky, but interesting nonetheless. Lakoff and Budner bring it home nicely:

Taxes provide and maintain the protecting and empowering infrastructure that makes our income possible.
Our tax forms hide this truth. They do not indicate the extent to which taxes have created and sustained the common wealth so you could earn what you have. They make it look like the empowering infrastructure was just put there by magic and that the government is taking money out of your pocket. The most likely truth is that, through the common wealth, America put more money in your pocket than it took out — by far.
But this situation is threatened by conservative tax policy. Through unfair cuts in taxes paid by the wealthy, through payment for the invasion and occupation of Iraq, and through borrowing abroad to pay for the tax cuts and Iraq, the common wealth is being drained and the infrastructure allowed to fall apart. We need to return to a fair tax policy that recognizes financial responsibility incurred by the compound use of America’s empowering infrastructure.

We’ll leave it to the politicians to boil it all down to manageable sound-bites and catchy slogans. Now, better get to the post office.

One comment on “Tax Reform Can Add Leverage to Dem Agenda

  1. Lew Jeppson on

    In this piece you suggest “mining the gender gap.” I don’t wish to address the tax matter, but the matter of working the gender gap doesn’t sit well with me. Now I know this newsletter is for Democratic strategists, and I am a Democrat. But I’m also a white male who feels his party often works against his interests. I recall attending a county Democratic planning meeting, and the matter of white male voting came up. One attendee said “oh, they’re just so macho”; ineffect saying they’d vote Democratic if they weren’t so dumb. A lot of us white men have felt the sting of “affirmative action.” You aim at the class ceiling (which I don’t doubt exits) but you more often hit middle and lower middle income white men. Just thought you’d like to know.

    Reply

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