Taxes and a Moral Society

David Blandford, a Penn State colleague and fellow member of our local Torch Club, said something at a Torch Club meeting last year that has stuck with me.  How people feel about taxation, he said, has less to do with the amount that they are taxed and more to do with how those taxes are used.  Tax evasion in 17^th century Britain, he told the Club, was rooted not in the tax itself, but in the fact that the British government used the taxes to carry on foreign wars that were of no benefit to the average Englishman.   On the other hand, modern Scandinavians are among the most highly taxed citizens on earth, and they are also the happiest, because tax revenues are returned in the form of benefits:  health care, work release for new parents, old age benefits, etc. 

            Americans are currently taxed at a much lower rate than Scandinavians.  In fact, we are taxed at a lower rate today than was the case just a generation ago, before the so-called Reagan Revolution.  And yet, we are among the most unhappy of industrialized nations.  Mother Theresa pitied us, saying that we are poor in spirit.   Why?  Well, one reason may be that, like Britain in the 17^th century, we are increasingly disconnected from our government.  We are afloat, unmoored to our sense of citizenship that gives us identity and a sense of social purpose.  Our waste of public resources to support private greed is a symptom of a government that is attending more to business interests than to the needs and interests of its citizens—in short, a government that is failing to do its real job. 

            The recent mass murder in Aurora, Colorado, is another sign of our alienation not just from government but from community.  The tragedy sparked a brief national discussion of gun control, which noted that, among the 23 most industrialized nations, the U.S. ranks first in gun murders.  Why?  I suggest that one reason is that we increasingly are estranged from the communities that used to support us.  We are a nation of immigrants and, unlike the nations from which our ancestors came, our cultural heritage is thin.  Our connection with our geographically defined community is made thinner by globalization.

            Taking a longer view, this disconnect may also be a symptom of a broader change that is overtaking our society as technology and globalization redefine “community” and challenge us to seek a new identity.   I believe that the changes we are now experiencing are much more profound than we tend to recognized.   It think it is safe to posit that not only are we moving from the Industrial Era to a new Information Era, but that we have left Western Civilization behind in the process.  The 20^th century, with its two world wars and its ideological Cold War, was the last century of that old world.  The new civilization is just now taking form.  It is being shaped, in part, by technology and globalization, to be sure.  As Fareed Zakaria wrote in The Post-American World, the change is not about the downfall of Western life, but about the “rise of the rest”—a new global culture where power and influence are more distributed and diverse.

            I’ve been reading Grace Lee Boggs’ recent book, The Next American Revolution.  In it, she argues that, in this new world, the challenge is not simply to over-turn the existing power structure, but to revolutionize our interactions with community at all levels.  “We are beginning to understand,” she writes, “that the world is always being made and never finished; that activism can be the journey rather than the arrival; that struggle doesn’t always have to be confrontational but can take the form of reaching out to find common ground with the many ‘others’ in our society who are also seeking ways out from alienation, isolation, privatization, and dehumanization by corporate globalization” (p. 48).

            Boggs quotes Meg Wheatley, who describes the new culture as “this exquisitely connected world” and notes, “Because of these unseen connections, there is potential value in working anywhere in the system” (p. 50).  The implication is that, as individuals, we can help shape the new world from wherever we find ourselves in our society.  This is a powerful new way to think about the dynamics of change in a democratic society. It also describes the paradigm shift in social identity that we are experiencing:  a new social context that encourages individuals in a globalized society to reconnect with community at the local level and, perhaps, with professional and social communities that are not defined by geography.   Revolution, Boggs argues, is the cumulative impact of many, many local actions.  “In other words,” she writes on her own career as an activist, “our revolution had to be for the purpose of accelerating our evolution to a higher plateau of Humanity” (p.70).

            And this is where we have gone wrong in the years that span my adult life and those of many of us Baby Boomers who had such ambitions for our society.  Somewhere along the line, we’ve lost our passion for “accelerating our evolution to a higher plateau of Humanity” and settled for a kind of comfort that dulls our moral sense.  The rich get rich, but we are all the poorer for it.

The Sequester and Natural Law

The current budget sequester raises many questions about what America should do reduce our budget deficits and arrive at an ongoing budget scenario that (1) is sustainable in itself and (2) addresses issues that will ensure a healthy and sustainable society for our citizens.   In The Myth of Progress (2006, University Press of New England), Tom Wessels reflects on what the laws of nature can tell us about how we need to care for our societal ecology.  Wessels makes several important points in this concise book:

            First, we need to abandon the linear thinking that has tended to dominate economic theory and practice for the past century.  Linear thinking reflects an industrial approach to the economy:  that the world is like a machine—in which “each part works in a lockstep way with the other parts, so that the system always follows the exact same sequence of interactions between the parts” (p. 6).   In reality, he argues, we live in a nonlinear, complex system that is less predictable because the parts interact in multiple ways, so that the system is much greater than the sum of its parts.  Complex systems, Wessel notes, generate “emergent properties—things that couldn’t be predicted just by examining the parts” (p. 9).  He also notes that complex systems tend to be nested within each other, which helps to maintain system integrity.  

            Second, Wessels argues that, just as natural ecological systems depend on diversity to sustain themselves, our political ecology also benefits from diversity.  “The foundation of sustained progress lies in stable systems that increase diversity through time to resist perturbations” (p. 78).   Systems that lack diversity are more likely to be adversely affected by external changes because they lack means to adjust.  Wessel offers several examples of where the American economy is becoming less diverse and, in the process, less stable:  the rise of industrial farming over smaller family farms, increasing consolidation of the news media under less than two dozen large corporations, and the rise of corporate power that displaces small businesses.  A good example of the last change is Walmart, which has reduced economic diversity by killing small local retailers in communities across the country.

            Third, he notes, “Large-scale change in complex systems never comes from the top down; it always bubbles up from the bottom.  That means that large-scale social, political, and economic change comes from the citizenry, whom elected officials will follow when its collective voice becomes loud enough” (p. 60).

            What does this suggest for how we should deal with the federal deficit and the sequester?  For one, we should be aware of how budget cuts might create unanticipated “feedback loops” within our complex economic and political system.   Across the board cuts could have both positive and negative consequences; either way, we need to be sensitive to the potential for unforeseen consequences.   On one hand, it is essential that there be some discretion about how cuts are made.  On the other, it is important that we use the sequester to make real cuts that result in real change. 

            At the same time, we should use the sequester to eliminate subsidies to activities that work against economic diversity and that create instability.  For instance, this would be a good time to eliminate subsidies to large-scale corporate farming operations and to the oil industry.   We should invest some of the saved funds to support small, family farms and local cooperatives and to support innovation in wind, solar, and other sources of energy in order to diversify our food and energy resources and allow us to be more responsive to climate change and other external threats to stability.  

            I am a firm believer that the final solution will require more than just an across the board cut in expenses.  New revenues should be at least one quarter of the total solution, which assumes closing existing loopholes in federal income taxes.  Beyond that, however, we will need significant cuts, even if the hatchet approach of the sequester can be avoided.   Let’s hope that, in both sides of the process, we keep Wessels’ ideas in mind and find solutions that recognize that our society—and our economy—is a complex, rather than linear, system.

Empower Citizens with Fiscal Cliff Data

Speaker of the House John Boehner said on Sunday, “I don’t think anyone quite understands” how to resolve the current U.S. federal budget crisis.  Well, here’s an idea.

            In his new book, Citizenship:  How to Take the Town Square Digital and Reinvent Government (Penguin, 2013), Gavin Newsom argues that, in the Information Society, we need to connect citizens to government in new ways, by giving them access to government data so that they can better participate in solving public problems.  The result is more of a bottoms-up than top-down approach to governance.   The problem with today’s federal government is that it is paralyzed by radical ideology and conflicting loyalties.  There is no constructive conversation, making good top-down government decisions almost impossible around important issues.  So, let’s try a bottoms-up approach.

            A first step is to have transparent data.  What, in detail, is the problem?  What, in detail, have the various parties—the Administration, Congressional Republications, Congressional Democrats, various non-governmental interest groups—proposed?   We need to be able to put all of the different solutions side by side with each other and with the budget itself to understand the options.  Then, we—and by “we” I mean the citizenry—need to be able to look at the impact of different options and, perhaps, suggest our own solutions.

            The problem is that we are not, at this point, getting good information, either from government directly or from the news media.   Or, at minimum, dependable information is not easy to find.  Confirming and organizing the data so that people can attempt their own understanding of the problem, evaluate the various solutions that have been proposed, and suggest their own improvements would be a great contribution that any one of the national news outlets could make.  It would go much further toward creating public understanding than the constant point-counterpoint panels of political hacks and hired guns.

            The Fall 2012 update of The Federal Government’s Long-Term Fiscal Outlook makes clear that simple solutions—the kind we’ve been hearing about in the press—are not going to work.  It notes, for example: “Discretionary spending limits alone do not address the fundamental imbalance between estimated revenue and spending, which is driven largely by the aging of the population and rising health care costs” (GAO-13-148SP).  As a public, we need to develop an expectation that the solution will be complex, but that we will need to understand that complexity so that we can evaluate what our elected representatives propose as solutions.  Having the data and some structure for thinking about options—and then being encouraged to delve into the material to find possible solutions—could be very helpful in the long run.

            This would make a great project for CNN or another of the major national news outlets that lays claim to objectivity.  What a way to empower voters to help their government.