Inspired by Taxes
"Why do we tax, what do we tax, and how do we relate needs and scarce resources?" These questions don't normally lift the spirit and stir the soul. But when we asked four legal and finance experts to envision improvements in New Jersey's tax system during a CivicStory public forum on April 4 in Summit, the conversation led us to humanities, democratic ideals, and even moments of levity.
Claire Toth, a tax attorney and VP of Point View Wealth Management, took the first stab at untangling our tax policies. "With taxes, you want fair, you want easy, and you also want something that's fairly easy for the government to enforce. I'd be happy with two out of three." As for why our tax system has become so complex,"if we knew what a fair, simple, enforceable tax was, somebody would have said so by now."
Journalist John Reitmeyer, financial writer for NJ Spotlight and an expert on New Jersey's state budget, sees a need for forward-thinking policies "driven by what works instead of the political wind of the day." He says, "step one is having the conversation--talking about it honestly and looking at what the consequences are."
Frank Bolden, Retired VP Diversity, Worldwide, for Johnson & Johnson, foresees vast changes in our tax system that will require effective public information. "If we're going to change, we've got to abolish the whole thing and start over. And that's hard to do. So I think you start with a good education program."
If you tax something, "you're going to get less of it," claims Jerry Webman, retired chief economist with OppenheimerFunds. "There are lots of things built into the tax code that create irrationality, that create unfairness, that some people can take advantage of and others can't."
Panelists noted the wide variety of tax programs that have been enacted at one time or another, including income tax, sales tax, property tax, estate and inheritance tax, capital gains, consumption tax, gift tax, flat tax, and value added tax, to name just a few. Also noted was a partial list of services we expect from government and often take for granted: education, health care, parks, highways and infrastructure, our legal and justice systems, Medicare, military, pensions, unemployment benefits, social security, drinking water, and waste management, among many others.
When panelists were asked about their concepts of civics and citizenship at the start of the evening, common themes emerged. Reitmeyer defined civics as "engagement; participating; not being on the sidelines." Webman affirmed the idea that "we have a responsibility as citizens to promote what is in our fellow citizens' best interest, even if we disagree about what that might be."
For Toth, taxes and democracy are linked. "I always go back to first principles: 'demos' is people." She reminded us that on the outside of the IRS building in Washington, where she worked for twelve years, are inscribed the words of Oliver Wendell Holmes: ''taxes are what we pay for a civilized society.'"
Viewing taxes in terms of the kind of society we desire yields a further question: How can citizens become more engaged in deciding which services we might do without, or in finding new ways to meet society's needs?
This is something to ponder as tax season blossoms into spring.