Taxes or Investments?
Touching the Jaguar is about changing reality by altering our perceptions. In addition to the personal actions that each of us can take to make our individual lives better, the book dives into the roles we can play to transform a failing Death Economy into a successful Life Economy. Included are lists of the characteristics of both systems. I would like to focus on just one aspect that differentiates these two economic forms. Taxation.
From the book:
Key Characteristics of the Death Economy:
It vilifies taxes, rather than defining them as investments (in social services, infrastructure, the military, etc.).
Key Characteristics of The Life Economy:
It defines taxes as investments (should your tax monies be invested in health care or militarization?).
The coronavirus pandemic has created huge shortfalls in national and local governmental budgets. Issues around racial discrimination have generated discussions about defunding the police. In light of these events, it is worthwhile to look at the implications of tax policies in both these areas. I use the US as an example, but the principles discussed below apply in varying degrees to other countries as well.
It is disturbing to think that $54 of every $100 of the US discretionary budget (paid by US tax-payers) goes to supporting the military. (1) Make no mistake, these are investments; many of them are made to fund archaic systems, such as aircraft carriers, missiles, tanks and other technologies that have been rendered obsolete by cyber-attacks from other countries, including Russia and China. These outdated technologies continue to be manufactured because the political campaigns of congressional representatives from states where such things are made are financed by the manufacturers. Our current investments in the military do not protect us from viruses and yet they divert our taxpayer monies from medical research and other health-related investments and systems.
Questions raised by the recent events around racial discrimination were highlighted in a recent report on National Public Radio (NPR). It involves the relationship of municipal taxation to local police departments.
Fees and fines from traffic stops, jay walking and appearances in court have become a big part of many city budgets. Police departments have become particularly reliant on this revenue source. They used to get most of their money from taxes, but back in the ‘80s, there was a wave of tax cuts in municipalities across the country. Fees and fines emerged as a way to generate money for police departments and cities. (2)
One of many examples is that cited by NPR of Ferguson MO where Michael Brown was killed by police in 2014. At that time, police-generated fees and fines made up 20% of the city’s budget; 85% of people pulled over in traffic stops and 95% of people fined as jaywalkers in Ferguson were people of color. Throughout the US, police brutality is often funded by those who are most brutalized.
The tax cuts that began in the US in the 1980s had a negative impact on middle and lower classes’ incomes and a positive impact on the incomes of the rich. In other words, the tax cuts made the rich richer and everybody else poorer. This is reflected in very disturbing information about the taxes corporations pay. While they reap huge benefits from city and national budgets, including the use of utilities, public schools, recreation facilities, police and fire departments, and so many other services, highly profitable corporations too often pay no taxes. They rip off the rest of us so that a handful of wealthy shareholders can buy more private jets, yachts, and mega-mansions.
The Institute on Taxation and Economic Policy reported that:
An in-depth analysis of Fortune 500 companies’ financial filings finds that at least 60 of the nation’s biggest corporations didn’t pay a dime in federal income taxes in 2018 on a collective $79 billion in profits. . .
If these companies paid the statutory 21 percent federal tax rate, they would owe $16.4 billion in federal income taxes. Instead, they collectively received $4.3 billion in rebates. . .
Netflix and Amazon paid no federal taxes. Other companies on this list include Chevron, Delta Airlines, Eli Lilly, General Motors, Gannett, Goodyear Tire and Rubber, Halliburton, IBM, Jetblue Airways, Principal Financial, Salesforce.com, US Steel, and Whirlpool. The complete list is at https://itep.org/notadime. (3)
It gets a whole lot worse when we consider that many of those wealthy shareholders who benefit from the non-taxed corporations also pay few or no personal taxes.
Today the system has badly eroded — many multi-millionaires and billionaires pay a lower tax rate than average American families. . .
Billionaires like Warren Buffett pay a lower tax rate than millions of Americans because federal taxes on investment income (unearned income) are lower than the taxes many Americans pay on salary and wage income (earned income). (4)
Does it strike you as odd that “unearned income” (i.e. paper shuffling) pays fewer taxes than “earned income” (i.e. productive work)?
How about solving budget deficits, misdirected investments, pandemics, and impediments to transforming a Death to a Life Economy by changing our tax perceptions? How about starting by defunding at least some of the military’s obsolete equipment and practices and taxing profitable corporations and wealthy individuals?
Let’s allow Bernie Sanders and Donald Trump to answer those questions. From Democracy Now June 26, 2020:
Senator Bernie Sanders has proposed a sweeping 10% cut to the military’s budget, saying the money could be invested instead in education, healthcare and poverty reduction.
Sen. Bernie Sanders: “If the horrific pandemic we are now experiencing has taught us anything, it is that national security is not just building bombs, missiles, jet fighters, tanks, submarines, nuclear warheads and other weapons of mass destruction.”
Sanders spoke on the floor of the Senate on Thursday on the same day President Trump visited a shipyard in Wisconsin, where he boasted about the administration’s “colossal” military spending.
President Donald Trump: “We’ve totally rebuilt the military, two-and-a-half trillion dollars. And some people would say, 'Well, that's out of the budget.’ I said, 'Let me tell you something: There is no budget when it comes to our military.'”
The Pentagon’s budget is larger than the next 11 nations combined. (5)
What you can do
Answer the following questions for yourself
What investments would I like my tax dollars to go toward? Military? Education? Health Care? Review the local and national budgets to see what the current investments are and what you would like to see.
Should all companies and individuals contribute to these investments on a local and national level? Should anyone be exempt? Why or why not.
Take Action
Once you are clear on where you stand and where you'd like to see investments placed, cast your vote and share your voice on a local and national level.
Vote in the next election for national, state and local candidates who advocate for investments that are aligned with your values
Let local officials know that their budgets must be financed through taxes, not through police fines and fees.
Initiate or join social networking consumer campaigns that zero in on companies you want to see changed, saying things: “I like your products but won’t buy them anymore until you. . .” Encourage all your social network friends to do the same.
Use your personal passions and skills to spread the message that we must transform this failing Death Economy to a Life Economy (e.g. carpenter tells clients that sustainable materials are an investment in the future; artists, musicians, writers, teachers send the message through the vehicles at their disposal; parents instill environmental sustainability and social justice in their children).
We can all take different paths – ones that give us each personal satisfaction; when we all head in the same direction, toward a Life Economy, we change our lives and the world.