Why We Pay Taxes

People are missing the point about taxes and why the rich should pay more.  Taxes serve two functions:

  1. To fund the government so that it can provide the services that are most efficiently and effectively done centrally
  1. As payment for the privilege of living and working in the state and country of this, the greatest nation

To the first point, items like law enforcement, defense, education policy, health care, energy production and management, the coordination of relationships between individual states, and relationships with other nations need to be managed by a single entity.  To have each state negotiate, coordinate and manage these efforts on their own is wasteful and redundant.

To the second point, we all benefit from living in the United States, even if we are unemployed, poor, and undereducated.  For proof we have only to look around at the conditions that the poor and disenfranchised live under in other countries and we can see that our least advantaged citizens fare better here than they would in many other countries.

We all bear a responsibility for, and benefit from, what this country provides for its citizens.  At one end of the spectrum, starvation is rare, and few of us lack drinking water and shelter.  At the other end of the spectrum, we provide the environment in which people can prosper through hard work and determination (and sometimes, dumb luck).  That environment includes the embrace of free market capitalism; freedom of expression, speech and the free exchange of ideas; freedom of spiritual (some might say religious) pursuit (or not) as one pleases; the freedom to grow (literally and figuratively) as individuals and a society; and freedom of mobility that allows us to chase our dreams wherever they may take us.

But there is a cost to those privileges:

When there is tension between the needs of the few and the many, the many must prevail.  This is the price we pay for avoiding dictatorship and oligarchy, and for having a military that is subservient to civilian rule.  It is why we have anti-trust and anti-corruption regulations.  It is why we are a nation of laws, not anarchy.  It is why we adhere to Biblical admonitions to care for the poor.

We must be willing to hear, consider and act on the ideas and opinions of others.  Gridlock and entrenchment limit progress and growth.  Cooperation and a willingness to try new things are cornerstones to peace and prosperity.  Where would we be if people had rejected once radical ideas like democracy, mass production, farming (as opposed to hunting and gathering), and collaboration?

For the rich to earn their riches, they must stand at the back of the line.  When you buy a TV set, you go into a store, pay your money, and walk out with a new set.  The workers who built the set have already been paid, the shippers who transported the set have been paid, and the clerks who displayed the set and placed it in the back of your car have been paid, all before you made your purchase.  The factory and store owners only make money when they make the sale, and for that risk they deserve the highest reward.

If the rich were at the front of the line, as Trickle Down economists insist, the process would be reversed.  You would pay your money; the store owner would take a cut and send the rest to the factory.  The factory owner would take a cut and send some to the workers who build the set.  The rest would go to the shipper to deliver your new set, and to the retail employees to load it into your car.  That would be insane.  Economies trickle up, not down.

In order to maximize individual and national prosperity, all Americans must reach their potential.  This means that education and opportunity must be maximized for each one of us.  In order for economies to trickle up to their fullest potential, all of us need to be producing as much as we can, adding value to the economy.  And this requires that we all receive an education commensurate with our aptitudes, and opportunities in line with our skills and abilities.  Only under this scenario will the rich get even richer, the poor move into the middle class, and the middle class get to improve their positions.  Anything less is a recipe for decline.

The more one benefits from the privileges, the more one owes.  What all this boils down to is risk reduction.  Living in the U.S. ensures that our intellectual capital is protected, our security is assured at home and at work, our food and water supplies are safe, our workforce is ready and available, our markets are able to afford our products and services, and our ability to come up with the next best thing is nurtured.

These privileges should not be taken for granted nor should they be free.  They should be paid for commensurate with the degree to which we benefit.

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