Tea and taxes

On April 15, a respectable number of folks conducted "Tea Parties' across Montana to protest what they view as high taxes. It's all a matter of perception, I suppose, I know a lot of people who think their taxes are pretty reasonable, but I think it would be hard to get them to a "My Taxes Are OK" rally. 

I did run into a family in Colstrip about 16 years ago who were up in arms about their property taxes. I pointed out that taxes in Colstrip were the lowest in Montana, and they pointed out that they didn't care, they were still too high. They lived in a mobile home which couldn't have been taxed at over $200 a year, and the husband had a job at the power plants where he earned about $30,000 a year.

America ranks 28th among the top 30 industrial nations in taxes, according to 2005 data from the Organization for Economic Cooperation and Development, and Montana is 40th among states in taxes as percent of income. Federal U. S. income taxes are now at one of the lowest levels in history. From 1944 through 1963 the top rate on high income taxpayers was over 90 percent it is now 35 percent. America's economy boomed in those years when the rate was 92 percent, and it boomed again when the top rate was 35 percent. Go figure. 

Of course there are a lot of "Yeah-but's' involved and I'm not about to draw a comparison to time when America led the world in industrial production versus a time when we led the world in shopping. Our unprecedented ability to shop was thanks to in an economy driven by easy credit so we could buy stuff made overseas. I would note that I felt a lot better about things when I could buy a car made entirely in America. Actually, I still buy them, but they're 35 years old and eat gas. The ride's great, though. And the taxes are really cheap, if that's a concern.

Reading through a couple of "Tea Party" websites it seems that the protests may be less about current taxes than they are about fears of higher taxes because of the deficit spending on the bailout, and creeping socialism because of government intervention. They have good, serious points. Even though deficit spending is nothing new (President Bush was a fair hand at it) the level of the projected deficit in years to come is unsettling. Is it avoidable? Few of us have ever lived through a time like this, and none of us, including top economists, know what to do about it. One thing seems pretty certain though, if we had just let the chips lay where they fell, did nothing, and rode it out, it would be a pretty awful time for everyone.

But frankly, if we are worried about the Federal bailout we have to remember that private enterprise in the form of multinational corporations hasn't lifted a finger to help themselves, let alone the rest of us. They went to where the pockets were deepest, the Federal Government — the first resort in times of panic. So if 'socialism" as practiced in the bailout is bad, and capitalism has temporarily (I hope) failed, what's the alternative? Flip the calendar backwards?

It's comforting to think that a return to the life and politics of an earlier time would work better, but it's been my experience that people who want to return to an earlier time of innocence and happiness either weren't there or forgot the bad parts. The 1950s? Racism, Cold War, and anti-communist red-baiting that ruined the lives of innocent people. 1789? That wonderful year when our Republic adopted the Constitution, was a time of slavery, disease, and hardship. And talk about "elitists;" only male landowners could vote. No, we have to deal with the time that we are in because that's what the rest of the world — including most Americans — is dealing with, and there are better minds than mine who will, I hope, be successful with that.

The anger leading to the Boston Tea Party and the Colonies' ensuing rebellion against the King was caused by acts of the English Parliament that affected the American Colonists, and even though taxes were but one aspect of those acts the most remembered cry to rebellion was "No taxation without representation." With the Revolution, we gained political sovereignty and were represented, not by Englishmen in an English Parliament, but by Americans in American governments.

We still are, actually, so now what — "no taxation with representation?"

Jim Elliott is a former state senator from Trout Creek. He served in the Montana House 1989 to 1996 and the Montana Senate from 2001 to 2008.