I really don't have a problem with taxes, and I don't really understand what all the fuss is about. Recently I've been thinking about what I pay and what I get, and I'm sure I must be net positive on my quality of life return. So here's the analysis for demonstration's sake - rough and oversimplified, that digresses on a number of topics, and ends up an absolute rant. I really hope I have a teabagger
reader. :-)
First, I work for a non-profit - a 501c3. Non-profits are a vast conglomeration of institutions and entities that really have not much in common with each other, except they don't generate profits i.e. they spend what they take in (though they can certainly spend lavishly, and they can also keep funds in endowments, reserves and invest (and gain) on their assets). They serve a broadly defined - very, very broadly defined - and possibly debatable - social good. Though, fair enough, if we began to parse your social good, my social good, and society's social good, we'd probably tie ourselves in knots, so broadly defined it shall remain. A homeless shelter and soup kitchen are non-profits. So is Harvard University with its gazillion $$ endowment (over $25 billion! -with a 'b' - and that after a significant tumble in value, boo hoo). And elite private schools like Sidwell Friends and Andover and Ms. Porters, as well as the more modest, but quite pricey, G's daycare center. Many/most hospitals are non-profits. Think tanks, too - conservative and liberal alike. Large umbrella institutions - like the National Association for the Eduction of Young Children and the AARP. Planned Parenthood is one, as is World Wildlife Fund. And international non-profits, too - ginormous ones, like Care, and smaller ones, like The Global Fund for Children.
Private foundations have some special legal and regulatory oversight about their spend-out, but not one I know in great detail. And so do organizations that conduct advocacy and lobbying - though almost all non-profits can do a significant amount of advocacy (like taking a stand on something and saying how to vote on an issue or a candidate) on their issues (up to 10% of their budget - which on a multimillion dollar non-profit institution can be substantial)....though most tread lightly and carefully here, and many set up parallel 501c4's which *are* allowed to lobby, and they can often pay their CEO's out of both pots.
But I digress...
Contributions to non-profits are tax-deductible, because of the societal good they serve (again highly subjective depending on where you sit). I was fascinated by an article a while ago in the Stanford Social Innovation Review (must find link!) that pointed out that the charitable contributions to the PTA of Mountain View High School (in Silicon Valley) get the same tax benefit as the contributions to the PTA of Anacostia High School. Fascinating, when you take into account that the difference in the contributor base and revenue potential of the MV PTA is exponentially larger than the one in Anacostia; that the contributors to the MV base arguably *need* the tax deduction less, and are more likely to claim it than the Anacostia base; and finally the investment in MV's PTA schools are far more marginally beneficial to society than those in Anacostia.
But I digress again....
So, I was saying that I work at a non-profit. Our revenue (however it's made - individual donations, private, corporate, and family foundations, or returns on our endowment income) are not taxed. Our contributions by individuals, as mentioned earlier, are tax-deductible to them. And we don't have to pay sales tax - if and when we use our tax-exempt code and card - more typically done on larger purchases and recurring orders.
My paycheck itself....I'm moderately well-compensated as management within an international non-profit (though not as well compensated - at $3.7 million!- as the President of GW University, another non-profit institution). On my paystub, my health insurance premium is pre-tax, as is my Metrocard monthly allocation, as well as my contribution to my 403b retirement plan. Many in the for-profit and non-profit sector qualify for such - I'm merely making the point that a well-itemized portion of my paycheck is exempt from federal, state (ha! - not in "taxation-without-representation-DC" - but I digress, again), and local taxes.
My tax returns themselves are interesting, because in addition to my pre-tax/tax-exempt/deferred tax income from said non-profit, I also qualify for several tax credits and deductions - notably my dependent (aka my daughter, Grace) and the interest in my mortgage. I no longer get a credit/deduction for being married (!) or interest on student loans, but I certainly have qualified for both in the past. A review of my 2008 taxes said I had a 25% marginal tax rate, but my effective tax rate (accounting for most of the deductions/exemptions above) is actually a low, low 14%!! So I pay *very* low taxes.
What do I get for all this? I benefit quite well. In addition to having my roads plowed after last week's massive storm, and my trash collected weekly for free, and decent roads, I also benefit from quite a few "extras." My daughter goes to a public school. While DC's public schools are not MV's public schools, she is getting a decent education. My daughter is also fully insured for health and dental on her father's military health insurance - and we have the plan where we can use any health facility or provider, not just MTF's (military treatment facilities). I swim twice a week - for free- at my local public pool, where I rarely share the lane with more than one other person. I use my public library regularly - rarely buy books these days. The online book catalog lets me put the latest novel of interest on hold- and they *text* me when it is ready for pick-up at my local branch - now that's service only FedEx tracking could top! Finally, I take public transit to work daily - DC's subway system Metro - arriving at the office (or home) door-to-door in about 30 minutes with minimal environmental and infrastructure toll.
So apparently, I live in Sweden - only without the "high" tax rate- and I am quite happy here. Sorry, dear reader, it is not "socialist," and I suspect if you took stock, you, too, would see what the government gives you that you do not challenge - including your peace and security, thank you very much.
And lest you argue that *you* don't need/use/benefit from the "crappy" school; that you have a gym membership; and that you prefer Barnes and Noble or Amazon.com - and the private sector could do it all better of we'd just let the "invisible hand" do its thing...At another time, I can share all the things that you take for granted that cannot be "privatized," despite your capitalist persuasion. Like how about all those people - with meager wages and no cars - that take the bus from Capitol Heights at 4am to staff your hotel, or make your breakfast, or ring up the purchase at your grocery store so you can shop at 7am, but which a private transport company could never turn a profit on getting them in from there at that hour.
And speaking of capitalism, I do do my part for the economy - both of the US and of China - as I'm a very good shopper.... :-) Small, local businesses when possible and practical, but not exclusively by any stretch. But I digress...
Enough rant.
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