The Taxman Cometh

Listen my children, and you shall hear, of the midnight ride of Paul Revere

Those words, of course, come to us from the Henry Wadsworth Longfellow poem written in 1860. The poem commemorates the famous 1775 trip taken by a Boston silversmith, Revere, and another, lesser-known personage named William Dawes. They each rode over separate routes through the New England darkness to warn the people of Lexington and Concord that British troops would be marching out of Boston the following day to confiscate cannons and ammunition stored in a rural barn. Most people have never heard of Dawes, a man whose role in that historic ride was as important as that of Revere. One can only assume that Longfellow chose to write about Revere because his name lent itself to catchy rhymes better than the name of Dawes. After all, I doubt that millions of schoolchildren would have been forced to memorize the poem had it read:

Listen up kids, and hold your guffaws; here’s the story they tell about old William Dawes

Just doesn’t have the same resonance, does it?

Anyway, both men warned the countryside of the impending invasion, the minutemen were ready, and they drove the Brit troops back to Boston. After shots were exchanged and many British soldiers were killed, there was no turning back. Weeks later, when word finally crossed the ocean to the king, Parliament sent fifty-thousand troops to the colonies in America, and the Revolutionary War began in earnest. Although not an official national holiday, the third Monday in April (close to April 19^th, the date of the Battles of Lexington and Concord), has been celebrated (since 1894) in New England and other places as Patriot’s Day. This year, Patriot’s Day happens to fall exactly on the 19^th.

The date is always commemorated with speeches, a parade, a Red Sox baseball game in the morning, and the most famous footrace in America, the Boston Marathon. First run in 1897, the Boston race was the only marathon contested in the US outside of the Olympic Trials and the actual Olympic games until fairly late in the twentieth century. From its inception, the race was a national news story and was covered by media from across the country. Eight years ago, the race became an even larger story when a terrorist bombing killed three people and injured hundreds. After that frightening day, the fact that the Boston Marathon takes place on Patriot’s Day took on added significance.

For me, I always feel as if my personal Patriot’s Day takes place a few days earlier, on April 15^th. That is the day that our federal income taxes are due (this year, due to covid, we have a later deadline). Most people hate paying taxes and have trouble understanding how I can possibly  celebrate the day in which we have to hand over money to the government. But hear me out.

I am not and have never been a member of the military. I don’t work for the government in any way. Therefore, I don’t have any tangible way to contribute to the continued greatness of my country, state, and local community—except by paying my taxes without complaint. I have always viewed paying taxes as a patriotic act. I don’t always agree with the way in which those collective funds are spent, but in general I see my taxes as a way to contribute to the greater good of the nation.

As I said, most people despise taxes. Even Ben Franklin, when asked about the potential success of the brand new Constitution, shrugged and said, “In this world, nothing is certain except death and taxes.” Over the past decade, the self-labeled “Tea Party” movement coalesced around several ideas, but the most prominent issue was opposition to taxes. Studies showed that these people were predominantly—but not exclusively—white, male, and wealthy. So this group, having enjoyed the benefits of this nation—having a strong military, national (although crumbling) infrastructure, access to a good education, a professional diplomatic corps that make international trade and a strong economy possible, and myriad other things paid for by taxes—opposed paying the taxes that made their privileged life possible. When we lived in Tennessee, a rural politician took this idea to extremes, legally changing his middle name from “Anthony” to “Low Tax” in order to attract voters who shared his animosity toward taxes. In 1998, Byron “Low Tax” Looper’s promising political career took a turn for the worse when he shot and killed his Democratic opponent.  At the time, he was under indictment for 14 counts of theft and other forms of political corruption, so he might not have won anyway.

Like anything else in life, you get what you pay for. In Tennessee, we had no state income tax and paid incredibly low property taxes. The result was public schools that were abysmal, and wealthy people all sent their kids to private schools rather than pay for decent schools for the poor.  Here in Wisconsin, we have relatively high state income taxes and pay property taxes that are 2 ½ times higher than what we paid in Tennessee. The public schools in River Falls, however, are very good and have excellent facilities in all areas.

Of course, as many people will point out, taxes are not always levied fairly. There is no question that the wealthy and corporations pay less than their fair share. This fact was driven home to me during the 2012 election when the presidential candidates revealed their recent tax statements (as have all candidates in past half-century except Donald Trump). Mitt Romney, the GOP candidate and a man for whom I have some respect, made $42.5M in 2010, but paid only 13.9% of that as tax. That same year, I made about $50,000, but paid over 20% in taxes. As a result, after taxes, Mitt had to struggle to make ends meet with only $36 million, while I was left with about $40,000. As this personal example shows, the tax system, an incredibly complex animal, has been backloaded with so many loopholes that many of the wealthiest people in the country pay a lower tax rate than the middle class. As we have recently learned, the more unscrupulous among the rich (E.G.: Trump) pay virtually zero taxes while claiming to have billionaire status. I don’t care what party you support, this is flat-out wrong.

It is not just wealthy individuals who have benefitted from friendly tax laws over the years. Corporations, too, have seen their tax rates go steadily down for the past forty years. During 1950s and 1960s, a period of unparalleled US economic growth and unchallenged dominance in world trade, those rates fluctuated within a narrow range between about 48% and 53%. Our economy was rocking and rolling in those years, so no one could possibly argue that the high tax rates hurt corporations in any significant way. Even in the 1980s, rates hovered in the mid-40s until the Reagan corporate tax cuts began a downward trend that continued under the two Bush presidents and Bill Clinton. Still, those rates were in the mid-30% range for that entire period. In 2017, however, Trump rewarded his corporate buddies by dropping the rate from 35% to a historic low of 21%, where it remains today. The drop from the 1980s until now resulted in small, incremental economic growth, but massive profits for corporations—in short, tax cuts did what they were designed to do: they made corporations and the rich much richer while the middle class and the poor enjoyed only modest gains or fell further behind.

Now President Biden wants to raise those modest corporate tax rates gradually, from 21% to 28% over a number of years, in order to pay for the desperately needed infrastructure improvements. Conservatives are screaming that this rate hike will destroy our economy, but there is no evidence whatsoever that this would be the case.

It’s time for corporations to quit whining and do what I do every year at tax time: look at it as a patriotic act, pay your fair share of the taxes, and whistle a chorus of I’m a Yankee Doodle Dandy as you sign the forms.