A new inconvenient truth: we need to raise taxes
Way back in 2003, I penned this post that more than five years later still gets regular hits. (It has received eighty hits since the start of the year, according to Google Analytics.) I was very politically incorrect back then when I suggested that we are not paying enough in taxes. I still feel this way and I am sad to say that recent news articles bear me out. We are woefully behind simply maintaining the infrastructure that we have. This was tragically borne out a year ago with the catastrophic bridge collapse of the I-35W Mississippi River Bridge in Minneapolis that killed thirteen people. As a direct result of this event, federal and state money suddenly materialized to replace this bridge. The replacement bridge will cost $234 million and is scheduled for completion by Christmas.
You would think that this event might have changed the dynamics. However, as the Associated Press found, just twelve percent of our most structurally deficient high use bridges have been repaired. It would cost an estimated $140 billion to repair just the bridges that need to be repaired right now. Yet, President Bush is threatening to veto a transportation bill because it spends $1 billion more than he likes. It will not surprise you to learn that Bush’s motives are wholly ideological. He is a conservative and conservatives do not believe in raising taxes or spending money on projects not considered essential. Apparently, despite overwhelming evidence to the contrary, bridge construction is not essential to this president. Our War in Iraq though is essential, and at least some of that money is going to build new bridges for Iraqis. Apparently, bridges are essential for Iraq, but are not essential for the United States. Go figure.
I picked bridge repair as an example only because it is easy to see the consequences of inaction. In fact, our infrastructure is crumbling all around us. Here in Virginia, our state House of Delegates once again bollixed up attempts to raise transportation taxes. The result is that not just bridges that are suffering, but cars spend much time sitting in traffic and consequently unnecessarily spewing emissions. So far this year there have been three Code Red air quality days for the Washington region, and twelve Code Orange days.
Better air quality, like safe bridges, are solvable problems. Neither is solved by rocket science but by the application of money and will. Just as maintaining your car means you extend its useful life, bridge life can be extended through regular maintenance too. Instead, we would rather defer the cost of maintenance to have a little more cash in our pockets today. The result is like driving your car on a half a quart of oil. You can do it for a while, but at some point, you are looking at some very expensive consequences. It is pennywise and pound-foolish.
The anti-tax crowds, epitomized by nuts like Grover Norquist, are pennywise folk. They are convinced that all expenditures of money by governments are ultimately wasteful no matter how much they address a public need. Their philosophy though amounts to living in the moment and closing their ears when the application of their philosophy results in inconvenient news, like what happened in Minneapolis one year ago exactly on August 1, 2007. These problems do not go away by ignoring them. They simply get worse and more expensive to fix.
The irony is that if instead of aggressively cutting taxes we had prudently kept the old tax rates then we would have had the money back then to fix many of the systemic problems that are cropping up all over the place today. Our tax rates seemed quite acceptable to the American public when our president was inaugurated. We were even paying back some of our massive debt. Granted, even back in 2000 we were not quite spending what we needed to spend to address problems like deteriorating bridges. This was due in part to federal gas taxes not having changed since 1993. However, construction costs have increased during that time. The result is that there is less money available to fund projects like bridge maintenance. Rather than raise gas taxes, thus far Congress’ solution is to charge it. Hopefully only as an interim measure, the House of Representatives voted overwhelmingly to add eight billion dollars to the Highway Trust Fund by supplementing it with money from general Treasury funds. In other words, we will go into more debt to pay for it and pass its cost on to future generations.
Our fiscal crisis in many ways mirrors our blindness with the oil crisis. We buy more foreign oil because we are used to an oil-based economy and do not want to think about how hard it would be to change to something else. We know that recoverable oil is a finite resource that in general will only get pricier because it will be harder to extract. Similarly, we borrow money from creditors on the expectation that they will always be willing to lend it to us. As some overleveraged homeowners are finding out, if your liabilities exceed your assets no one is willing to loan you any money. The same can happen to the United States government. Our weak dollar, trading at record lows, suggests the time may not be that far off.
To solve the oil crisis we must realize that we cannot drill our way back to our previous lifestyle. To solve our fiscal crisis, we have to realize that we cannot indefinitely depend on our creditors unless we first show a willingness as a nation to roll up our sleeves to fix some of these problems. In short, we need to raise taxes.
Raising taxes is never convenient, particularly at a time when so many Americans are struggling. That is why my suggestion will go over like a lead balloon. That is also why if I were ever inclined to move my fantasy run for president into a real run for president, my message would fall mainly on deaf ears. Like John Anderson in 1980, I would lose spectacularly.
Still, most of us, if we stop listening to the spin and start listening to our hearts, know that we face a new inconvenient truth. The cost of not raising taxes today simply means that to fix these problems tomorrow will cost even more. So yes, for a while, those extra taxes would hurt. At some point, you sufficiently address the under-funded infrastructure problems and taxes can be eased. Nevertheless, taxes must never be eased beyond the point that we can adequately maintain the infrastructure we need to run our modern society.
Instead of running for president, all I can do is be that fly in the ointment. I am more than willing to pony up my share of additional taxes. Most likely, I would pay disproportionately more in taxes than many of you, since I have a six-figure income. I do not like paying more taxes either, but I am willing to do so. I do know that despite laughably naïve men like Grover Norquist, we are interconnected. We critically depend on our infrastructure and our social safety nets. Since like you I get great value from these things, I am not afraid to pay my share.
As was true when I wrote about it in 2003, things cost money! They cost what they cost because that is how much it costs! No ideology can change this. I expect to pay close to $200 on Monday to have a locksmith fix a bad lock, which must work with our house key. It seemed like a lot of money to me too, but that is the going rate for fixing a problem that I cannot fix by myself. I would rather pay the $200 than find that anyone could get into my house or that I could not get out when I needed to.
We have a great nation that thanks to the low tax mantra is rapidly moving from first-class status to second-class status. I think I am a patriot by coming forward to proclaim that I am willing to have my taxes raised to make sure we remain a first class nation.
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