On the New Endangered Species in Politics: Taxes

            “Our Constitution is in actual operation.  Everything appears to promise that it will last; but in this world nothing is certain but death and taxes.”

-Benjamin Franklin (1783)

            That Franklin quote has held up for over two hundred years, but much about it may be in question now that the deal has been struck to end the debt ceiling crisis. 

            Oh, the Constitution is still in operation, albeit not necessarily in the manner that Mr. Franklin and his colleagues intended.  But whether it will last much longer is very much an open question, or at least it should be if what Congress has shown to be its “strength” in the last few months is an indication of its vitality. 

            First the elected representatives of the people made an issue of something that never had been an issue before in the history of the country and that never needed to be an issue now.  Then those same representatives appeared set on destroying the nation’s economy by seriously threatening not to extend the country’s ability to borrow the funds necessary to pay its bills.  Then, having come close enough to a self-imposed bankruptcy, they put together a “deal/framework” that will probably unravel in the months to come when the committee they select of their own to spell out the details disintegrates into another self-made crisis of partisan and ideological inflexibility.

            Such is the nature of the “great experiment” that has been the beacon for the world since the U.S. Constitution was ratified.  The will of the people is either so schizophrenic that it is close to impossible to identify clearly, or the people’s elected representatives are so poorly chosen that the government they form is a mockery of the democratic republic it is supposed to reflect.

            Think about it for a moment.  For no reason other than that a segment of one of the political parties in the country wanted to make an issue of something that never needed to be an issue, the country almost defaulted on its financial obligations.  Had it done so, the economy would have almost certainly nose-dived once again, and the country would have been as close to a Greek-like collapse as it could have come to in so short a time.

            But it’s that third part of the Franklin quote that is most problematic in 2011.  Not that death is any less certain.  It still awaits us all, only its arrival uncertain.

            But as the “starve the beast” strategy that Republicans have been pushing for three decades is more readily accepted by ever more Americans, taxes can no longer be considered an absolute certainty.

            Consider a few unassailable facts:

            In 2001, when George W. Bush assumed office, he inherited a one trillion dollar budget surplus from his predecessor, Bill Clinton.  He proceeded to cut taxes drastically.  He then started two wars and refused to mention, let alone consider, the idea of raising them to pay for those wars.

            And now, ten years later, with individual tax rates lower than they have been since World War II, and with massive budget deficits creating a mountain of federal indebtedness, taxes are deemed “off the table” in any deficit reduction negotiations.

            In the early stages of the debt ceiling crisis, President Obama spoke of the need for shared sacrifice, suggesting various methods by which the wealthiest Americans (individuals and corporations) might chip in to increase federal revenues.  He assured the nation, in a national address from the White House, that no deal would be struck unless it included revenues as well as cuts.  He even offered a three for one deal, whereby three trillion dollars in spending cuts would be “balanced” by one trillion dollars in increased revenues, the result not of increased tax rates, but of closed “loopholes” like oil and farm subsidies.

            The Congressional Republicans flatly rejected the tax part of the offer and ran with the cuts in social programs.  Obama quickly caved on his revenue demands, leaving taxes “off the table” and further enhancing the Republicans’ efforts to starve the beast by denying the government the revenues necessary to pay for the government’s bills.

            Granted, Mr. Obama is not a great negotiator.  In fact, he would be the used car salesman you’d love to buy a car from.  The conversation might go something like this:

            Obama: This car is a real beauty.  How much do you think you can pay for it?

            Buyer: Not a penny over ten grand, and I want a new car warranty included and a fresh set of tires.

            Obama: Oh, I think we can do that, but only if you pay for the tires.

            Buyer: Forget it.  I’m not paying for new tires on a car you are trying to get me to buy.

            Obama: But it will cost me to get the new tires, don’t you think you should pay something for them?

            Buyer: Hey, you’re trying to sell me the car.  Why should I pay for new tires on a car you’re trying to sell me?

            Obama: Well, would you be willing to pay for the new car warranty?

            Buyer: You just don’t get it do you.  I’m paying no more than eight grand for the car with everything I want on it.

            Obama: You said ten thousand.

            Buyer: That was before you started pushing me around on the tires and the warranty.  I’m insulted by your inflexibility, so now I’m only willing to pay eight thousand.

            Obama: Well, we really need to sell this car, so I’ll throw in a paint job if you pay the original ten thousand.

            Buyer: Eight thousand, and we’ll take the paint job.

            Obama: I’m not happy with this deal.  But we need to do it, because the car isn’t doing us any good sitting on the lot.

            Buyer: I’m not happy either, but I’ll take it.

            The moral of the story and the lesson from the resolution of the debt ceiling crisis is that taxes are an endangered species.  The only thing certain about them is that they will never go up, and the only question is when they will disappear altogether.