Changing our thinking about taxes

In the debate over taxes (and you can put me firmly in the “lower is better” category), we sometimes get so caught up with the question of “yes or no” on a potential tax increase that we ignore the bigger picture of the incredible amount of taxes that we already pay.

Think about the ways we “ignore” that:

• We have debates over passing a tax increase that “will only cost the equivalent of a cup of coffee every day” without remembering that many of us already pay enough taxes every year to buy a small coffee shop.
• When we get to April 15, and we get a refund back from the IRS, we literally say to ourselves, “hooray! I didn’t have to pay taxes this year!” Yeah, right.
• Conversely, we get upset when April 15 comes and we owe more in taxes. In all actuality, we should be happy about one thing — we didn’t give the government a 15 month interest free loan!

We all know that $1 in the hands of government will always produce less benefit to our economy than that same $1 left in the hands of its original owner — the taxpayer. But we also know that we need a government to protect our rights to life, liberty and the pursuit of happiness, and that means paying taxes!

So really, the most important thing that every taxpayer can do is get a stronger understanding of HOW our government spends money. Start at the local level — dig out your property tax statement, and look at the special assessments. Find that last “report to the taxpayers” from your county government, and look at the breakdown in spending.

And then, use that knowledge to shape which taxes and spending you support, and which taxes and spending you oppose, to keep up the pressure on our local governments to spend your money in the ways that protect our life, liberty and the pursuit of happiness.

As a Sierra College Trustee, one of my most important jobs is to make sure that the budgets we pass and the policies we set deliver the highest possible quality education, to the greatest number of students, at the lowest possible cost.

I think education is a critical part of protecting our freedoms in this country — it takes an educated populace to make the right decisions about our future. A friend of mine recently sent me this quote from Thomas Jefferson, in a letter he wrote in 1786.

“I think by far the most important bill in our whole code, is that for the diffusion of knowledge among the people. No other sure foundation can be devised for the preservation of freedom and happiness… The tax which will be paid for this purpose is not more than the thousandth part of what will be paid to kings, priests and nobles who will rise up among us if we leave the people in ignorance.” (Thomas Jefferson to George Wythe, 1786. ME 5:396)

Well said.

UPDATE 4/21 5:00PM: This post was linked to by Red County Placer, and a commenter was a bit confused by a paragraph of this post. I thought I’d post my response here as well.

Perhaps I can make my point in another way that makes it more clear. An hour of my time spent taking my car in for an oil change produces much less benefit to me than spending that hour in productive work. It also does zero to increase the value of my car. Yet I do it anyway, because otherwise, I will quickly lose the ability to drive my car!

In the same way, $1 in the hands of government will always produce less benefit to our economy than that same $1 in the hands of the original owner — the taxpayer. Yet that doesn’t mean that we don’t need government — and the quote from Thomas Jefferson in my complete post illustrates how I feel about education being a critical part of our local government.

The overarching point of my post is that we all need to be thoughtful when considering taxes and spending by our government. We need to look at how each of our local governments, and our state and federal governments, spend the money we’ve already entrusted to them, and weigh that against their requests for more.

If we look at that through the lens of the Declaration of Independence — which I think we can all agree is incredibly valuable as the intellectual basis on which the American experiment was founded — I think we can make wiser decisions about which taxes and spending we’re willing to support, and which ones deserve our opposition.

And that’s the kind of educated populace that Thomas Jefferson envisioned would hold back the “kings, priests and nobles”.