Anti-taxation and the de-evolution of America

A tea party member with an anti-taxation sign that reads "Carpenters against new tax's."

Americans lack financial literacy when it comes to taxation? Really? (Photo Credit: CC BY/Pargon/Flickr)

Turn out the lights, because nobody’s home when it comes to the taxation necessary to generate revenue for essential services across the board. That’s what Paul Krugman writes in the New York Times, and it may be that such concerns are falling on largely deaf ears in America. Cities shut off streetlights that would help curb crime, roads local governments had already spent a great deal of money on but can no longer afford to maintain are intentionally broken down into gravel and schools are laying off teachers at every turn. Cutbacks are the norm, yet scores of people from tea parties to corporate boardrooms continue to bury their heads in the sand when it comes to tax increases.

Governments are cash strapped; where’s the taxation?

While various economic theories exist regarding taxation, it is difficult to dispute that tax increases could help local governments provide more reliable essential services. Krugman points out that the federal government “isn’t cash-strapped at all,” considering that they’re more than willing to sell inflation-protected long-term bonds at only 1.04 percent interest. Thus, they should be doing more to aid local governments. The sense of priority is in effect warped, says Krugman. The richest two percent would apparently rather watch Rome burn than pay more taxes as they did during the Clinton administration – when the U.S. last experienced an economic boom.

Cutbacks equal higher unemployment

State and local governments are spending less on nearly everything, which does not bode well for families. Now that federal spending is actually beginning to slow down, Krugman sees an America stuck in reverse. Give a teacher their job back and that assaults runaway unemployment numbers directly. Allow millionaires to keep more of their money and while that could translate into job creation, there’s also a definite possibility that the Chicken Little “sky is falling” mentality will prompt the rich to stash their money away.

Demonizing the public sector

There is a definite belief that the public section cannot manage money to spite itself. Tea party anti-government, anti-taxation rhetoric has been couched in terms of avoiding waste and fraud. Krugman argues that there was never so much waste as the right claimed, however. Witnessing how much ground America has lost in terms of education and infrastructure should be enough evidence to suggest that America is not in fact sidetracked by oppressive taxation. On the contrary, “America is now on the unlit, unpaved road to nowhere,” writes Krugman.

Sources:

New York Times

Taxation, inflation and war (Courtesy of the Mises Institute)

http://www.youtube.com/watch?v=MP0lweid9JM

Other recent posts by bryanh