The "Fair" Tax Problem

April 15th has come and gone, but the arguments and bitterness remain, even well after the last “tea parties” have disappeared… for this year. We’ve all heard the arguments. The “rich” pay too little in taxes; the rich pay far more than their fair share; the middle class carries the heaviest tax burden; taxes are too heavy for working families… The arguments, points, and counterpoints seem almost endless, and more than a few Americans have asked year after year why Congress can’t come up with a taxation system that is simple and fair.

There are essentially three reasons why that seemingly simple task is in fact impossible. First, the U.S. government spends an incredible amount of money. That requires hefty taxation, and raising large amounts of revenue mitigates against fairness. While everyone thinks spending should be lower, there’s no majority agreement on what particular programs should be cut. Oh… there’s a general agreement that waste should be cut and that perhaps defense spending should be lower, but, as the saying goes, the devil is in the details. One person’s definition of waste, as I’ve discussed earlier, is another’s vital program. And, as for defense cuts… There should be fewer military bases, but don’t eliminate the ones in my state. Fewer troops in uniform? But we don’t want longer tours for those in service, and we don’t want the return of a draft. Less fancy weapons? But that increases casualties.

Similar issues arise in other programs. What about Social Security and healthcare? As it is, millions of Americans have trouble making ends meet in their older years… and you want to cut their benefits? Multiply these kinds of questions by the thousands of programs, and there’s precious little consensus on the details of any major spending reform.

Second, because so many Americans’ income, expense, employment, and life situation differ, a simple system capable of raising adequate revenue will inevitably have very different impacts on different taxpayers, and those differences will be perceived as unfair.

But the biggest reason why a “fair” tax system is impossible is because, as a nation, we cannot agree on what constitutes fairness. It sounds simple, and it’s anything but.

Begin with the reason for taxes. They’re officially levied to pay for services that individuals cannot provide for themselves, matters such as national defense, court systems, interstate and local highways, food safety and environmental standards — the list is long, and while many people complain that it is far too long, every one of those functions or rules was legislated into being because the so-called private sector proved unable or unwilling to deal with such issues. In general, at least in theory, each American has an equal claim to those services. Sam doesn’t get more national defense or environmental protection than Georgette, or less use of the highways or the courts.

So… one “fairness” argument asks why citizens who earn more than others and create jobs, either through the businesses they build or through their spending on goods and services, should pay higher taxes, either in absolute or percentage terms, than other taxpayers, when both receive the same government services. In fact, in percentage terms, many of those with the lowest incomes receive such services without contributing at all, except to Social Security and Medicare, and sometimes, not even to those programs.

A second fairness argument is based on equating fairness to percentage taxation, i.e., the fairest income tax is one that taxes all incomes at the same percentage. Under such a tax, often proposed at around 20%, a family that earned $45,000 [approximately the U.S. average family income] would pay $9,000, while a family that earned $135,000 would pay $27,000. The problem with this, many claim, is that $9,000 represents a far greater burden on the average family than does $27,000 on the better-off family, and this makes a flat tax unfair. On the other hand, does the better-off family receive three times as many benefits as the poorer family? Is that fair?

A third level of fairness argument is advanced by those advocating a “progressive” income tax systems [which, in various varieties, are what most nations actually have in one form or another, again, at least in theory]. This version of fairness states that those who have and earn more should pay a higher rate, often a far higher rate, than those who have less. There are a number of rationales for this, but the one most advocated is that those who are blessed with being successful have a greater obligation to pay back society with by paying higher taxes. Put slightly more cynically, that tends to equate to “it’s your civic obligation, and we need the money, and there aren’t enough of you to stop us from doing it.” I, at least, find it hard to argue that the wealthiest citizens, at least those who do pay taxes, and almost all of them do these days, thanks to the Alternative Minimum Tax, receive substantially more in government benefits than do other citizens, other than perhaps the benefit of the government not enacting even higher taxes. Do they have a moral obligation to pay higher taxes? On what grounds? Is it fair to insist that they do? Opponents of progressive taxation raise the question of why it’s considered fair for the most productive citizens to subsidize the needs of the least productive. Or why people with more children pay less in taxes than those with fewer children, when those with more children require more services?

These certainly aren’t all the arguments about “fairness” in taxation, and there well may be better ones than I’ve mentioned, but, whatever anyone’s position on these questions of “fairness” may be, it is quite clear that among Americans, and probably all populations everywhere, individuals have very different definitions of what constitutes fairness. And that, I submit, is one of the basic reasons why there will never be a tax system considered fair by those across all income levels of a society.

And, then, is it fair for a majority, because those who make less are always the majority in any society, to decide what is fair? Yet… would it be any fairer for one minority or another to decide?

Just Have Everyone Else Do the Work [Part II]

Several months ago, I posted a blog deploring the tendency of all too many businesses to outsource their work to their customers, such as by promoting “paperless” records kept by the consumer, rather than continuing the practice of sending out paper statements. Several readers pointed out that since such “innovations” reduced costs or kept them from increasing, the customers should benefit by not having to pay higher prices required by the old practices. I mentally considered that the point might have validity in some cases, but, overall I have remained somewhat skeptical.

Some recent developments have tended to reinforce that skepticism. The first is the pending decision by the U.S. Postal Service not only to raise first class postal rates in the next month, but also to eliminate Saturday mail deliveries to cut costs, partly on the grounds that revenues have dropped because much former priority/first class mail has decreased because more people are using the internet to pay bills. That may be, but I think that argument is largely a red herring. First, most all the services most Americans and I use still send out paper bills, even if we pay by internet. Second, the volume of advertising and junk mail continues to flood the mailboxes. The Postal Service has claimed for nearly 30 years that they “save” money by letting advertisers do the bulk mail work and that raising bulk mailing rates would drive down revenues. Oh? I do know printing costs, and when multiple catalogues continue to deluge our mailbox, it seems highly likely that any company for whom printing and mailing thousands and thousands of unnecessary catalogues and solicitations is cheaper than cleaning up the mailing lists is getting far too low a rate, especially when the delivery of the first class mail that is far more important to most Americans than bulk junk mail is going to be delayed even more. This is likely to become critical to more Americans in these financial trying times when an ever greater number of companies have also shortened their billing cycles, giving customers far less leeway in paying their bills before slapping them with various fees. The public is already subsidizing advertising and waste through the present pricing system, and now we’re being told that we need to accept poorer service in order to preserve the junk mail bonanza for advertisers.

In another case, users of one of the more popular tax calculation programs became aware of a flaw in the program almost four months ago. The flaw would not allow taxpayers with certain investments, even of a few hundred dollars, to file their taxes electronically, because the software insisted that there were errors in the federal return. More and more users complained. Nothing happened. After several months, one user figured out a fix, and several others improved on it. Less than a month before April 15th, someone at the tax software company cleaned up the user-derived fix and posted it. It’s not really a fix, but a work-around. Exactly why in four months can’t a software company fix its own programs? Why do the users have to find the fix? My own suspicion is that the glitch only affected a few hundred or a few thousand users out of millions, most of whom just gave up in frustration and filed by mail, knowing that the glitch didn’t create an error in their tax returns. That way the company didn’t have to spend thousands or tens of thousands of dollars creating a real fix.

Another set of examples lies with the airline industry. First, most airlines gave up meal service included in the price of tickets. Then many gave up “free” snacks. Some even restricted or eliminated inclusive soft drink services. Checked bags used to be included in ticket prices. Now anyone who needs more than an overnight bag pays a surcharge. That doesn’t just include business travelers whose companies can pick up the tab, but mothers of infants and small children visiting parents, for whom schlepping bags is usually neither possible nor practical. It also makes security screening, as well as loading and unloading an airliner, an increasingly tedious experience, which may be yet another reason why scheduled flight times are growing longer and longer, even though airplanes are not flying any slower [except, of course, in comparison to the discontinued Concord]. The latest “cost-saving” inconveniences are the replacement of boarding cards with flimsy paper boarding slips and the elimination of the airline ticket envelope. If one does check baggage, then the baggage claim notice is unceremoniously stuck to the back of a boarding flimsy, where the chances of its survival through multiple flights are greatly reduced.

I’ve only cited a few such cost-saving inconveniences, but I dare say that there are many, many more out there. Now, I’m the first to admit that anecdotal evidence doesn’t necessarily have any statistical value for the population as a whole, but there are times when it does. I’m beginning to think that we just may have reached that time. The other aspect of this that bothers me, especially as a F&SF writer, is that, while I have tried to retain the optimism that technological and computer advances would reduce the pressures and costs on people, I have the feeling that more and more often technology is being used to optimize ways of separating people from their money, rather than providing new and improved services.

Isn’t there a point where so-called cost-saving is going to be recognized as just another gimmick to preserve profits and, heaven forbid, corporate bonuses — which will doubtless go to the executives who dreamed up the ever-increasing levels of inconvenience foisted upon Americans in all sectors of the economy?

The Oversimplification of Everything

Some time ago I was reading a book [Lies My Teacher Told Me]. I didn’t finish it, not because it wasn’t good, but because it was thoroughly depressing, and I’m usually not the kind to be easily depressed. The author was pointing out case after case where textbooks and teachers were wrong. I got to thinking about his approach and realized that what he was often complaining about wasn’t about lies at all — but that teachers and textbooks all oversimplified everything to the point that those oversimplifications become simplistic and often were not technically correct.

Part of that is understandable — almost nothing is as simple as anyone makes it out to be, and few of us have the time and patience to learn the full story about anything. Life is really like fractals — while we seem to see regular patterns, those events aren’t all that regular, and the deeper one looks the more there is.

Yet, at times, overunderstanding can be counterproductive. I don’t care about impact physics when I’m stapling shingles or hammering in a picture hangar. The problem is that once some things, particularly economics and politics, are oversimplified, they are in fact lies, and those lies change the course of human events, while oversimplifying the impact physics of hammering nails generally has little effect on the ability to hammer in nails — or the rate of housing construction.

But failure to understand can be even more deadly, especially in a representative democracy where voters have to decide on who represents them and when those decisions are based on news so condensed that it’s essentially a lie, even if every fact presented is in fact accurate, because the facts not presented would have changed the entire slant of that news item. Unfortunately, in this day of instant news and instant information, most individuals don’t want to listen to the full story. They have a thirty second — or less — attention span for anything that doesn’t affect them, especially at that moment, and to cater to that, most information providers condense information and news to short snippets of quick and oversimplified material. Almost always, this results in distortion and can change popular opinion or reinforce already existing stereotypes.

Years ago, when I was legislative director for a U.S. Representative, he made the point that in an appropriations hearing there was more debate on a line item for mule barn than on research appropriations for a nuclear collider — because everyone knew what a mule barn was and wanted to voice their opinions. He was exaggerating, but not by much. In another case, the abandoned hazardous waste sites [Superfund sites] ignited a giant controversy during the Reagan administration because the American public had heard about Love Canal and could visualize the problem. The political uproar that followed because people felt that EPA wasn’t enforcing the law vigorously enough essentially resulted in the removal of 33 out of the 35 political appointees at the Agency, and all the top officials. Yet, several years later, studies revealed that there were nine other far more serious environmental problems that were killing far, far more Americans than leakage from abandoned Superfund sites, and that those problems couldn’t be addressed adequately because so much of EPA’s funding, as a result of the Superfund scandal, had gone to the waste site problem.

Virtually every government agency has similar stories, and so do many corporations. While absolutely egregious, the recent payment of bonuses to AIG executives tends to overshadow the far larger and more critical problem of a financial system that institutionalizes and rewards excessive risk and short-term profits and diverts funding and attention from basic reforms of that system, as well as from vital infrastructure, health care reform, and education.

In short, in a condensed, sensation-based news culture, what you hear is usually an oversimplified version that’s all too often a “truthful” lie because of what’s missing. And, more and more, such “truthful lies” lead to bad public policy and worse legislative fixes, which in turn create more problems reported in another set of “truthful lies”… and so it goes.

The Bell Curve Revisited

A number of years ago, a book called The Bell Curve was published and immediately became the center of an intellectual firestorm. In retrospect, one could almost say that it was a case of “While I don’t like your statistics, I don’t have any better figures, but because your statistics conflict with what I believe (or have seen on an individual basis), they can’t possibly be so.”

As Murray and Hernstein, the authors, stated, statistics are not valid for individuals, but well-developed statistics are almost always accurate for large populations. Their statistics appeared to raise disturbing implications in two areas: (1) individuals with higher IQs — on average — are more successful in our society, and (2) certain minorities, notably blacks — on average — have lower IQs. The authors also claimed that IQ does not change significantly for most people after an early (pre-school) age. Recent research has raised some issues with the last point, but only about the threshold age after which IQ seldom changes, although it seems clear that certainly IQ does not usually change significantly after puberty, and may be determined considerably earlier.

Whether the authors are correct or not should be assessed, not by philosophical predilections or by anecdotal evidence, since exceptions make both bad law and bad policies, but by a broad-based study which addresses such specific issues as:

(1) Is IQ a valid predictor of economic/societal success [not whether it should be, but whether it is]?

(2) If IQ does have validity as such a predictive tool, to what degree is IQ genetically determined, and what other factors can scientifically and effectively be determined to change IQ [i.e., do prenatal care, maternal nutrition, very early childhood education and support, etc., play a significant or a minor role]?

Finally, regardless of causal factors, the authors addressed one simple and basic problem: the fact that, in an information-based hierarchy, those who show higher IQs are more likely to be successful than those who do not. Even if methods and techniques can be developed to ensure all individuals realize their maximum potential IQ, in our society those with higher IQ levels will continue to become an increasingly powerful and self-selecting elite. Isn’t that really the controversy? That we have developed a culture where some individuals, no matter how hard-working, will never be among the most successful so long as success is measured by hierarchical power and economic success and that such success requires the skills measured by higher IQs?

We also seem ready to reject any “scientific” method that may indicate some groups will be either more or less successful than others in areas requiring mental prowess, even while we readily acknowledge such inequality in athletic areas. Why? Is it because we are unwilling to admit that most individuals cannot alter their basic mental capacities, and that such capacities are fixed by outside factors and the actions of others?

In the end, much of the controversy over The Bell Curve seemed to have been generated by individuals — on both sides — whose beliefs were deeply affected — those who either wished to use the statistics presented to justify their already-existing negative feelings and actions about minorities or those who rejected those findings because the findings were antithetical to their very beliefs.

Yet, more than ten years after the publication of The Bell Curve, I have yet to see any evidence whatsoever addressing the authors’ point that, like it or not, economic and professional success in the present-day United States can be predicted largely on the basis of IQ. I have to emphasize that I am not saying this is as it necessarily should be, but the fact that this finding has been quietly buried and remains unrefuted is more than disturbing in itself.

Thoughts on Music

The in-depth and devoted study of music is perceived by many as either fluff or irrelevant to today’s education and world. It is neither. Archeological excavations have discovered various musical instruments that predate historical society, and every human culture, without exception, has some form of musical expression. Music, in particular classical music, is a discipline based entirely upon rigorously applied mathematics, requiring intellectual and physical abilities developed over a period of years. Music has been a key element in culture and politics for at least 50,000 years, and cultural musical achievements are inseparable from a culture’s political, economic, and even military power.

Yet, even today, some politicians and educators question the value of music as a subject of educational study, assigning higher priorities to everything from driver education and athletics. After all, with American Idol, the message is that anyone can sing. With such skepticism and ignorance about the disciplined study of music, one must ask the basic question: Is music important to a culture, and if so, why, and to what degree?

The music enjoyed, played, and composed by a culture defines the soul of that society, and how music is taught in that culture, and to whom, not only illustrates the strengths and weaknesses of its education system, but foreshadows the fate of that education system — and of the society itself.

Aristotle called music the keystone of education. In practical terms, more than any other single discipline, music improves intellectual functioning, emotional intelligence, and understanding of and ability to integrate multiple intellectual and physical activities. PET brain imaging studies show that sight-reading and performing engages more areas of the brain than any other activity.

As noted by a number of scholarly presentations over the past decade, music increases emotional intelligence, and as pointed out by the neurobiologist A.A. Anastasio [Decartes’ Error], intelligence devoid of emotional content is an impaired and reduced intelligence. It is not exactly happenstance that Thomas Jefferson and Albert Einstein were both violinists, or that a high percentage of physicians have musical talents and abilities.

Ensemble musical performances also require cooperation and coordination under time pressure. This is a useful skill in a society that exalts individual success at any cost, particularly since we live in a complex society that rests on cooperation. One has only to look a various third-world societies or Middle Eastern cultures — or even western situations such as Northern Ireland or Basque Spain — to see the devastating impact of societal divisiveness.

Although it is scarcely politically correct to declare so publicly, all music is not equal, either within a society, or in comparing music from different societies. Because almost every human being can do something that can be called music, all too many humans equate what they like with excellence. Such popular personal taste does not necessarily recognize or reward technical expertise and genius. As in many fields, understanding and appreciating excellence in music takes education and talent.

In terms of the larger implications for American society, all too often overlooked and obvious is the fact that for the past 600 years western European music has been the most advanced, most technologically diverse, and most multifaceted… and that western European culture dominates the world — politically and in terms of economic and military power — and has ever since its music developed in its present form. The only cultures that have been able to challenge western-European-derived ones economically, politically, and militarily are those that have adopted — if by adapting — western European music.

Music is indeed complex. Like all of the most worthwhile disciplines, it requires study, long hours of practice, and is expensive to teach. But… as in all matters, what is cheap and popular does not survive. In that sense, it is far too expensive for the future for universities, especially state universities, NOT to teach music. Americans live in a nation that is increasingly polarized by two opposing straight-line, single-value camps of thought. Americans also live in a nation whose popular music has been degenerating technically and compositionally as this polarization has increased. This is scarcely coincidence or mere happenstance correlation.

Likewise, music teaches its students how to handle multiply faceted values and inputs, a skill more and more valuable in a complex and multifaceted world. Because music does increase intellectual and practical abilities, eliminating and/or reducing the study of music at state schools is another critical factor in effectively limiting, if not destroying, the position of the United States as the principal dominant society of the world.

That is because music will only be taught at elite state and private universities, and, when taught at other schools, educators are increasingly pressured to simplify and dumb-down the curriculum, because true musical education on the collegiate level is anything but easy, and difficult courses are less popular and have lower enrollments. This combination of exclusivity and content degradation will only help to increase the division between the privileged and the rest of the population at a time when the economic gap between these groups is already increasing. In addition, it will contribute to other trends already reducing the proportion of the population with the range of skills necessary to analyze, manage, and innovate in a complex world society.