The Tax Man Commeth

This fella, Ron Reagan, (a.k.a. the 'great communicator') continues to be the darling of the rich-republican-right.  I have a rather long litany of dislikes about this guy and his performance as President.  He was daring in a sense - running up the Star Wars program and making the world believe there really was one.  I hasten to remind everyone here that the state of the art PC at the time was an Apple IIc and a 386 chip was only a dream...things were kinda primitive but the bluff worked to a point.  It was that sleight of hand, that voodoo that you do so well, that was his strong suit and he played it.

One card that he played relentlessly was that the American people were "over taxed" and these taxes supported a government (federal) that was not there to help them. He pushed a mantra that it wasn't the tax rates being the issue other than they were too high but it was government spending that was the culprit.  Even now you can hear the idiot-stick talk radio types observing that revenues always increased after a tax cut and these pluses were over matched by all kinds of over spending so the gap never closed.  We are hearing that now.

Forget that we have the effective tax rates on the federal level that are about the same as 60 years ago.  The fact is our tax rates aren't linked to the budget.  They are linked to what is politically expedient.  "Taxes are too high" is a nice soundbite but the question is "too high for what"?   Reagan's everlasting contribution to the national debate is just making the observation and leaving out the solution. 

Now we are really in a fine fix.  When the federal government decided to cut taxes it also, particularly now with this recession, has cut revenues.  Corporations have a high tax rate but virtually pay no taxes (57% don't pay any taxes including the great big ones).  A lot of the services or responsibilities that once fell on and came out of Washington have been pushed onto the States and communities to fund.  Now they are flat out of money.

One of our local school districts is running into the crunch..  The community base is property taxed nearly to death with $1,000/mo. on the local/town level not at all uncommon.  The State of New York is broke as well so next year's budget is caught between the inability to raise taxes very much if at all, a decrease in State school assistance and a Federal government that is beyond broke and broken.   For communities this is Armageddon, and for the ordinary citizen, the view is incomprehensible.

The local real estate shops are counting on the huge year end bonuses paid to the New York financial swells who had and have a philosophy of cut taxes and get government out of our boardrooms. They got their wish and with that "swell" money, but up the local real estate and price homes out of reach.  The $1,000 in taxes is a pittance.  They don't care about services because they don't use them. They don't care about the schools because their kids don't go to them.   They have clout and aren't at all ashamed about tipping over the first domino (cut taxes) in Washington that eventually bleeds the local communities dry which is the case now.

The mantra "reduce taxes" is just that; something that everyone thinks they need but in reality it provides no answers, just more problems. The tax guy is going to show up at the door sometime soon.  There is no other short term solution.  There just isn't.