Thursday, April 16, 2009

The Real "Savings" by Cutting Taxes

So back in the 80's with the Reagan Revolution people got this idea that cutting taxes was a good idea. Not just income taxes though. Property taxes and corporate taxes (a disproportionate amount more of this than other kinds) also saw cuts. Well...30 years later what was the real savings? How does your pocketbook seem fatter with all these cuts? The answer: NOTHING IS SAVED!

Sure...you might get a short term savings of a few bucks for you the schmo who works for a living. The guys who can live off their trust funds and dividends while sitting by a pool...they saved oodles...and the deal kept getting better for them. And it was done at our expense!

Here is the real cost of the tax cuts that people like those who "Teabagged" the Obama Administration on Tax Day. Your kids get to pay for it. Yes...there is the debt issue but that is not what I am targeting here. The real way your kids pay for it (and so do you in some cases) is in roads that are less safe (see the MN bridge collapse and the general condition of out roadways), an utility grid that is crumbling and a school system that is struggling to make ends meet. You pay less in taxes while cities, counties, states and the federal government cannot pay to keep these things up. Sure...some smarter choices could have been made in spending the money over the years, but in long term picture which is coming into focus the real problem is that tax revenue is down causing the local level to cut spending (because unlike the feds they cannot print their own money).

What really upsets me about all of this is the schools. People complain schools do not function properly. They are right...but not for a lack of trying. The schools want to get it right for the kids. They want to make sure your kids get a good education. However they do not have the money to do so because taxes...money on the local and state level that fund schools (and the police and fire departments and so on...)...have been cut in the last 30 years. A school needs a certain amount to pay for your child's education. They also have to maintain buildings and pay for operating costs (utilities, paper and other teaching materials, etc...) just like a business. Yet they are funded by the money that you the property owner and the businesses are saving because you all wanted lower taxes.

Now...teachers will lose their jobs, school sports are being cut, materials are being rationed like materials in a war and your kids are being offered fewer classes that could expand their education. It has been shown time and again that things like expanded class offerings (foreign languages and vocational related classes for instance) and sports have long term benefits to the kids that have the opportunity to have them. But because you wanted lower taxes they do not get them. They will have to do without classes and lessons that could give them an edge in college or future careers. All because you wanted lower taxes. Without extracurriculars kids are more likely to engage in unhealthy activities (unsafe, criminal, narcotic or otherwise) causing a larger social cost in prisons, injuries and rehabilitations. But hey...you got lower taxes.

The result of your excess in savings is the theft of a quality education for your child and other children as well. The vast majority of kids are educated by a public school system that is funded by TAXES. Yet who cares...you got a tax cut.

If you can sleep soundly at night knowing that your desire to pay less in taxes resulted in kids not getting an education as good as yours than you are either nuts or went to a private school because your family has the money to send you there. In which case you are probably loving this. After all...a less educated workforce will allow wages to go even lower causing you the spend less on operating costs and increasing your profits. Business is good!

If you are not one of those, the next time someone screams about paying taxes...quote that oft used and mocked line that really does have meaning here; "Won't someone please think of the children!" and educate them on the real cost of cutting taxes!