Orange County Register: Why state tax increases are reasonable
media mentionPublished: Nov. 26, 2012 Updated: 6:18 p.m.
By HAO-NHIEN VU / Journalist, blogger and math teacher
Proposition 30’s passage is not just about education, but it heralds in a new age of more thoughtfulness on taxes. California voters show they do not have a knee-jerk reaction that all taxes are bad, and are willing to put their own money into investments that they believe in, such as education. (Full disclosure: I teach at a community college, which will receive Prop 30 money.) The electorate is saying that certain things are worth spending money for, and if it’s worth spending, then it’s worth paying for. In providing for money to pay for necessary investment, voters show us that taxing sometimes actually is the essence of fiscal responsibility.
Are all taxes bad? Some people seem to think so. A tax pledge circulated by the Americans for Tax Reform group calls for elected officials to “oppose any and all efforts to increase the marginal income tax rate for individuals and business.” No matter what the tax does, and no matter what it is used for, this pledge says, don’t do it.
This means taxes are more evil than just about everything else in the world. But, if you think about it for a minute, that makes it the only thing that we consider to be always bad, always prohibited. We don’t think of anything else like that. Not even killing of human lives.
We, as a society, accept all sorts of permissible homicide: Killing in self defense, killing combatants in a war, killing in death penalty, killing the likes of Osama bin Laden, just to name a few.
Even massive killings – also known as war – can be “just” if the cause is right, as St. Augustine said. We never banned all killings. We only say killing is bad when it’s not for a sufficiently good cause or reason. And yet groups like ATR would say taxes are so inherently bad that we would never, ever, go for it. Between death and taxes, apparently taxes are worse.
Groups like ATR give other reasons why taxes are evil. The ATR web site includes this statement: “The government’s power to control one’s life derives from its power to tax.” But it takes money, i.e. taxes, for the government to do anything, controlling or otherwise. So it’s like saying that fatal accidents derive from the power to drive and therefore driving is bad.
This election shows us that California voters do not think that way. They know that taxes, while undesirable, can be necessary. We could live in an alternative universe where all roads and bridges require tolls, and we wouldn’t need tax money for them. But that’s not what we want. Likewise, we could also live in an alternative universe where all education must be paid for by students and their families and there would not be taxes. California just said no to that.
Such sentiments miss one prominent feature of Prop. 30: A large chunk of its revenue will come from the increase in sales tax rates, by one-quarter of a percent. As opponents of Prop. 30 pointed out, the sales tax is borne by everybody. The No on 30 website warns: “All Californians will be affected by increasing the current sales tax.”
The sales tax affects everyone and is a “regressive” tax: Poor people pay more of their income in sales taxes than rich people do. A 2009 study by the non-profit, non-partisan Institute on Taxation and Economic Policy concluded that while the poorest 20 percent of Californians, with annual income less than $22,000, pay 6.5 percent of their income in sales and excise taxes, the top 20 percent, making more than $58,000, pay only 3.2 percent. The top 1 percent, with income of $600,000 or more, pay even less, only 0.8 percent.
Is that fiscal responsibility? Yes. All this brings us back to this point: Not all taxes are bad. They are probably all undesirable, but if killing can be justified, so can taxes.