The Use of Taxation

A W-2 form.

I know people fret over taxes – from the hassle of the process to the actual payment – but we can all agree that at some level taxes are important: we all drive right?  And taxes always show up in debates around political campaigns – they decide the way we live.  But lost in the shuffle of all the 1040s and 1040EZs, the W-2s, etc. there are a couple interesting topics.

Taxes so we can have nice things like this sick cloverleaf.

One is the concept of marginal tax rates – “as your income rises, the additional money you make is taxed at progressively higher rates. The last dollar you make is taxed at the highest rate, which is called your marginal tax rate”.  Below $16,000 per household no tax is paid at all.  Then, increasingly, different chunks of your income are taxes at higher rates (Hank will break it down for you with some topical political tie-ins.)

Marginal tax rates are more interesting to me in how they relate to tax protest.  Yes, while some people complain about simply having to pay their taxes, others complain about their money going to certain branches of government.  One branch in particular is the military.  The story of David Gross typifies: he asked to be paid under the lowest income tax level in order not to pay taxes:

“I was having a hard time looking at myself in the mirror.  I knew the bombs falling were in part paid with my tax dollars.  I had to actually do something concrete to remove my complicity.”

He was talking about the post-9/11 war with Iraq.  The idea is that our tax payments make us culpable.  (The book Twelve by Twelve by William Powers really explores this.)  And, fortunately for this purpose too, flat tax rates only start above a certain income level (take it away John).

David Gross - and this his blog

This leads to the concept or question: are taxes themselves a kind of vote?  Sure, they appear non-partisan, but the fact that you pay, to me, seems to condone the status quo.  Your say is that you can vote for politicians whose policy positions you agree with vis-à-vis reform, etc.  It is there that your say, to a significant degree, ends.  Although you may vote for peace candidates you don’t get a democratic vote on how much money is allocated to different government branches.  Taxes also go to pay off the debt, the existence of which you only have your say in a roundabout manner.
Upcoming I would like to dig into the idea of debt – what are the implications of having it and ask if debt, too, reinforces the status quo