Not to drop a name, but last week I was on a panel with Bill O'Reilly of Fox News and quoted the wonderful B. Rapoport of Waco, Texas, a great and very rich American. B. says: "Look, you make $50,000 a year and pay $8,000 in income taxes. That won't send you to the poorhouse, but it will sure as hell put a crimp in your budget. I make a million dollars a year. I pay $400,000 in income taxes. That leaves me $600,000 a year to live on. You gonna feel sorry for me? I'm still rich."
O'Reilly, perhaps not realizing I was quoting someone else, jumped in and said: "Yeah, but I don't want to take your money and give it to someone else. You should keep your money."
My tax money and Rapoport's tax money are not given to someone else. It goes back into this country, the one that allowed Rapoport to become rich in the first place. B. Rapoport knows perfectly well why he's successful. His dad was an immigrant peddler who never made more than $4,000 a year. B. went to the public schools of San Antonio back in the '20s and to the University of Texas in the '30s, where he attended graduate school in economics.
He believes in public education the way some people believe in religion. He supports a charter school and gives generously to U.T. He's happy his taxes are used for social improvementÐhe cannot stand rich people who dodge their taxes. How can you not be willing to create opportunities for young people in the country that gave you so many opportunities, he asks.
The preamble to the Constitution says this country was established "In order to form a more perfect Union, establish Justice, ensure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our posterity." Roads, schools, prisons, courthouses, bridges, dams and sewage systems are all necessary, as are health and education. That's why we pay taxes. We pay for after-school programs and sports leagues because kids need them and get into trouble without them.
The reason people hate paying taxes is because they know the system isn't fair. We don't have a progressive tax system in this country anymore . . .
The sections highlighted in red represent two opposing viewpoints on why Americans hate to pay taxes.
One viewpoint can briefly be summarized as one that opposes all forms of wealth distribution through government means, one that advances the notion that the market is the most efficient mechanism for allocating resources (like capital) and should not be interfered with.
The other viewpoint espoused by Ivins above says that Americans don't like paying taxes because they have an underlying sense that the system is unfair and they are being taken advantage of.
1) Which of these positions do you agree with most? Write a persuasive-argumentative paper that supports one of these two positions.
2) Using David Cay Johnston's Perfectly Legal and any other resources at your disposal, build your case for why Americans hate to pay taxes.
a) you may choose to use examples that illustrate inequities in the tax system. Some examples from Johnston's booki include:
i) accelerated charitable remainder trusts
ii) executive plane privileges
iii) estate tax inequities
iv) the alternative minimum tax
v) Social Security inequities
vi) inequities with the Earned Income Tax Credit
vii) unequal audit practices by the IRS
viii) tax-exempt insurance companies
ix) tax protesters (position 861ers)
x) offshore accounts
xii) access to tax shelters
xii) retirement plans
b) you may take issue with the examples that Johnston uses (or provide examples of your own) and discuss how they represent market efficiency and the proper role of government in the affairs of the individual.
3) In the conclusion try to connect your previous discussion to one of the following areas (though you don't have to necessarily use one of these ideas):
a) have the tax code inequities furthered cheating in other areas of the culture?
b) have the privilieges afforded the super-rich made them overvalued in our culture?
c) has the dream of becoming super-rich supplanted all other life narratives in our culture?
d) has the trend in executive pay been mirrored in other aspects of the culure?
e) has the inability to embrace cheating relegated those who do not cheat on their taxes to a kind of underclass?
4) 1200 words
Questions For Perfectly Legal by David Cay Johnston
Additional Resources
"Rolling Back the 20th Century" by William Greider in The Nation magazine [April 23, 2003]
"For Richer" by Paul Krugman in The New York Times Magazine [Oct. 20, 2002]
"The Tax-Cut Con" by Paul Krugman in The New York Times Magazine [Sept. 14, 2003]
"Very Richest's Share of Income Grew Even Bigger" by David Cay Johnston in The New York Times [June 26, 2003]
"Tax Cut Casualties" by Bob Herbert in The New York Times [June 23, 2003]
"Case of Vanishing Deductions: Alternative Tax Called Culprit" by David Leonhart in The New York Times [Feb. 21, 2005]
