Unfixable? Unfixable
This unfixability is essentially a result of a cultural quirk
It would be neither too cynical nor negative to observe that much of life is spent dealing with problems. Let’s define problem as an issue, circumstance or question that is perceived to require one or more solutions, can include doubt, uncertainty and difficulty, can require information, data and research, and will often result in trade-offs, compromises and limitations. And these problems can range from personal to societal.
Societal issues invariably affect personal ones, and this is where human nature meets socio-cultural nature. The daily news is a constant reminder of just how complicated this combination really is. Politics (the theory and practice of influencing other people) is how we negotiate life with each other at home, at work and as citizens. We manage to resolve or at least mitigate many problems, but as modern society has evolved and become ever more complex and interrelated with other modern societies, we are encountering many fundamental issues that exceed our ability to fix them.
The 2016 U.S. election circus that will lead to someone becoming president demonstrates how poorly many citizens are equipped to make things better for themselves and those in their society. Although many working and middle class voters are angry at the state of governance, and are rightly unhappy with the excessive influence that financial and corporate enterprises have in the process, their choices for solutions are not only not going to fix the problems but will exacerbate them while creating other issues. The appeal of the rhetoric is not matched by the results of it.
Candidates to the far right would cut taxes for the wealthy and business, cut spending for the poor, remove health care coverage and impose their version of morality on women. Not trusting government is their motto and ideology, but they themselves should not be trusted by those who work (or want to) for a living. In other words, far right ideology is antithetical to what angry voters really want and need.
The singular candidate on the far left has more to offer average citizens, but the socialism being promoted — while offering citizen rights that are fundamental in European and other societies — has three huge problems in this country. First, the majority of those in congress are not going to support or pass legislation for the programs envisioned by the candidate. Second, the majority of the electorate are moderate progressive to conservative, and, while sympathetic to the goals of these initiatives, are unlikely to support the costs for them — which leads to the third and most important issue: tax revenues.
By any pragmatic assessment, the tax revenue system in the U.S. is broken. Thousands of pages of credits, exceptions and exemptions, combined with taxes on individuals and corporations that do not generate sufficient revenues, undermine the ability to pay for both fundamental functions of modern governance while ensuring that all citizens have access to quality education, health care and retirement. In terms of tax efficiency — tax revenue as a percentage of gross domestic product, the U.S. ranks at the bottom among developed economies, sharing this distinction with Chile and Mexico.
The optimal system would substantially reduce taxation of labor and capital, and remove most deductions. Local government would raise property taxes while the federal government would implement a consumption tax (value-added tax, VAT) of 18 to 20 percent. The results would be significantly higher revenues relative to the wealth of the country. VAT systems are, by nature, fairly complicated because of the universality of how these taxes are applied and credited, but 140+ countries have implemented VAT programs because of the efficiency.
Sales and consumption taxes are mildly regressive for lower income brackets but very progressive for middle-upper and upper tax brackets. For the former, avoiding taxing essentials, such as food, will eliminate the worst regressive aspects, while with the latter there are increased taxes revenues from those most able to afford more expensive items and higher levels of consumption. Fuel taxes, which are exceedingly low in the U.S., could go up significantly to pay for the massive amounts of money needed for repair, replacement and development of infrastructure — the basis for widely shared, sustainable economic growth.
The problem, and thus the title of this post, is that in this country fixing the tax system is essentially impossible. Even though it is widely agreed that our tax system needs to be replaced, not only is achieving consensus on a replacement very unlikely, there are some who actually want the replacement to be revenue neutral — an utterly pointless goal. They are more interested in pretending government is the problem and should be underfunded than investing in infrastructure, education and fundamental research.
This unfixability is essentially a result of a cultural quirk in which the individual is more important than the greater good — meaning all individuals. An accompanying cultural quirk is a pointless and misguided distrust of government, as if there is an alternative that can serve citizens’ needs and expectations.
Combined, these undermine society’s ability to solve critical issues affecting the socio-economic and socio-cultural quality of life and well-being for all citizens. Many citizens don’t connect how right-size government that works for the greater good requires appropriate tax revenues to accomplish this. Small, underfunded government is not how modern societies are able to experience a truly greater good. And it all starts with fixability.
