Death and Taxes

Some days I wake up bright-eyed and bushy-tailed. Then I read the paper. And I get weary. It’s not usually the death and destruction that gets to me. Cold-hearted as that may sound, my eyes blurred and my brain tired this morning reading, yet again, about the Fiscal Cliff. It’s important; it’s huge; it’s political–it’s also largely incomprehensible. We don’t need to reform the tax code to raise money or lower taxes: we need to reform the tax code because it doesn’t make any damn sense and, I’m convinced, it has so many moving parts that no one else understands it either.

When I was in high school, I had Mrs. Roach for World History. She sat in her rocking chair the first day of class and told us we were reading James Michener’s The Source. Michener’s novel, like all of his works, is a kind of journalistic historical novel. The Source is a fictional story about development of Israel. The story moves back and forth in time with multiple narratives as archaeologists dig and the narrator tells us how Israel came into existence.

Mrs. Roach, after her description of the novel, let us know she was an atheist. She didn’t care what we believed, but in her class our focus was on factual knowledge. To think well, she would tell us, we have to place the contemporary world in its historical context and vice versa. History isn’t just some thing we beat to death or learn so we can avoid repeating it. History, she taught us, is the complex web of events that can’t be treated as a linear progression from the beginning of humanity to today. Michener’s novel isn’t long because he’s wordy: it’s long because at any given moment in time millions of things are taking place. Every one of them is historically significant in some way, shape, or form, and every one of them is connected.

Don’t get me wrong. Dates matter. There are events that serve as important historical and cultural markers worth remembering but we also have to recognize that smaller, seemingly less important events often occur that lead to those culturally defined moments. We also have to remember that the importance of any historical event is usually defined after the fact based on the relevant values of the dominant culture. As the dominant culture changes, so does the importance of those cultural moments. (Note to Republicans–you might want to pay some attention to those cultural shifts.) It’s what Paul Harvey used to call the rest of the story.

Simply put: nothing happens in a vacuum and systems are complex because they have all these interconnected moving parts. If one part stops working or if you pull out one part, the rest of the system is impacted and its performance becomes unpredictable. And I can’t think of a system in this world that has become more complex than our tax code.

The San Antonio Express News ran an article today trying to explain what would happen to me if we go over the fiscal cliff. I applaud the attempt but the essay, though well-written and intelligent instantly made me think of Vizzini in the Princess Bride. His logic is incomprehensible simply because he imagines the world as this linear thing with limited options resulting in limited outcomes. By necessity, codes that are this large have to treat people as a monolithic group where every individuals acts just like every other person in the group, even though we know that each economic situation is, like history, a complex web of commitments, desires, and dreams. And we know those situations change. Yearly. Monthly. Daily.

Our tax code’s complexity is worsened by unrealistic budgeting models (we’ll save $1 trillion over 10 years they tell us–but only if the world remains exactly like it is right now). As the President and his opponents jockey for position, they discuss the tax system as if we can simply raise a tax here, change a requirement there, and the problem gets solved.

The problem is that the tax code has to be treated as a complex organism. We don’t, quite frankly, have any idea what will happen if we raise marginal rates and raise the social security age if we don’t also increase expenditures for health care. In the same way, we have no idea what impact better health care will have on increasing the marginal rates on investments. What happens, for instance, when people live longer (better health care) but work longer (more stress) while creating more diverse and sophisticated investment portfolios? And let’s not forget that employ-ability is often tied to available housing(or mobility) which is impacted by local tax rates that are impacted by increased or reduced federal aid and, in theory, all those are impacted by hiring which is impacted by education which is impacted by local, state, and federal tax rates which are impacted by the cost of goods which are impacted by gas prices which are impacted by defense costs which are impacted by foreign aid which . . . you get the idea.

Our current tax code reminds me of my grandparent’s house. It started out as this two room, one car garage house with a living room and kitchen. They had 9 kids so the place went through a steady and almost consistent remodeling. Another kid–close in the garage to make a room. All those mouths to feed–add a pantry with laundry room to the back. Another kid–add a back room with bunk beds. Great concept but there’s a point at which that model creates so much complexity we become prisoners of an incomprehensible blueprint. Turn the hot water on to wash dishes and the toilet flushes. Repairing the front porch light requires turning off the breaker to the refrigerator.

At some point, we just have to tear the whole thing apart and start over. I realize this sounds so simplistic it could never work, but why are we not capable of estimating real and potential costs for any five year period and then budget appropriately? We can have, quite frankly, a progressive flat tax where every person who earns a wage pays a clearly demarcated tax based on wages. When we have a national crisis or war where our duly elected representatives deem it necessary to increase our expenses, that percentage increases. Simple and based on the American concept that we are all benefiting from the system; hence, we all pay into the system. Corporate and other taxable areas would operate in the same way. Mobil oil doesn’t need a tax-break to create jobs. Walmart doesn’t need a tax-break to build a store in my town. If they don’t drill for oil or build the store, they won’t have any customers.

Oy, but I just fell into the trap of simplifying a complex system, didn’t I? Such a tax base requires long and intelligent conversations about what our estimated expenses might be: social security, defense, welfare, education, research and development funds, etc. Of course, we could look to history and develop a 10 year average then budget.

Or, we could just all take a drink from Vizzini’s cup and see who survives.


About John Wegner
John Wegner is a Professor of English where he also serves as the Dean of the Freshman College. He and Lana, his wife, have been married over 25 years. They are the parents of two great sons who (so far) haven't ever needed bail money.

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