Thursday, October 6, 2016

On Taxation and Trump

Every American works partly for himself, partly for the community within which he carries on his existence.  One legitimate political question, of course, his how much for the individual and how much for the community?  Another related legitimate question, what for the individual and what for the community?

Let me set aside one deflection before I begin.  By individual, I mean what most would mean by "individual," the atomized person standing alone, but I would also include what some would call their "loved ones," their immediate family extended perhaps to a few close friends, those with whom the the atomized person interacts on a daily basis, those in whom he has a sort of emotional "property rights," the me and mine of a spouse, children, parents.  One can work for the "me and mine" and feel that one is working for a gathering greater than themselves, serving a higher moral purpose, and it is true.  The "me and mine" provides a more immediate and powerful incentive for the sacrifice of time and effort than any abstract other, but it is always the abstract other that carries us beyond a primitive tribalism to a civil society, a "more perfect union."  We serve the "me and mine" by buying groceries and sharing them.  We serve civil society by paying taxes.

There has always been a strong streak of individualism within American society, particularly within the American west.  Let me set aside another deflection before I begin.  By individualism, I do not mean the mere flouting social conventions -- dying one's hair purple, piercing one's nose, tattooing one's face, and then demanding equal rights to those without such accouterments.  Such "individualism" is always contingent upon the social norms that it would flout.  It is mostly an urban phenomenon for reasons that are easily understood.  And besides, it normally passes away along with adolescence.  By "individualism," rather, I mean rather that line of thinking that places sole moral authority and accountability in the individual.  It is easy enough to see why such individualism has been engrained in the American psyche, particularly within the American west.  As manifest destiny pushed us west into the wilderness, there was little beyond the individual and the sacrifices necessary to the survival of me and mine.  If there was government, it was local government, and one could tithe to it as one tithed to the church, but the federal government was remote, was abstract, and had little bearing on the day to day struggles of the people.  The mythos of "individualism" survives and can be seen in almost any western, where the individual, alone in the wilderness, is entitled, even obligated, to take up arms and protect one's own from rape and the rapine of others, those that would spoil one's women and appropriate one's land and chattel.

I am suggesting, of course, that a strong part of the republican cohort, particularly those within the west, are animated by this mythos of individualism, and a reaction to the present realities that have nibbled away at it, mostly in the form of taxes that take away subsistence that should rightly be dedicated to "me and mine" and "gives it away" to support a federal programs that remain remote, abstract, inaccessible, but increasingly intrusive.  Cliven Bundy, as the exemplar du jour, is animated more by anything that would place restraints on him as an individual; hence, his support of the sovereign citizen movement that espouses mostly an "ask for nothing and give nothing" form of rebellion against the federal government.  They would answer the question, how much for the individual and how much for the community, by saying "everything for the individual, nothing for the community, except those communities I, as an individual, choose to join."

I am sure I'm not the first to suggest this, and I've probably picked this particular idea up from any number of half remembered sources, but it differentiates the reaction in the west from the reaction in the south.  In the south, as I have suggested, moral authority and accountability lies not in the individual, per se, but in a hierarchy that places god above man, white above black, men above women, et cetera, and the hierarchy itself creates a civil order maintained by paternal authority exercised by those above, obedience practiced by those below, or as they put it, the conservative instinct includes "a preference for homogeneity over diversity, for stability over change, and for hierarchy and order over radical egalitarianism."  In the south, the political watershed that drove voters to the republican party was, of course, the civil rights and great society legislation of the Johnson era -- the first living memory of "radical egalitarianism" up-ending the natural hierarchies.  The federal government was not only up-ending the natural order with the civil rights legislation, but the anti-poverty programs of the great society used tax dollars to undermine the economic hierarchy that reflected and reinforced that natural order.  The question is not one of taxation, per se, but the uses to which taxation has been put, the destruction of  a well ordered "community."

Although race doesn't provoke the same visceral reaction that it does in the south, if Cliven Bundy comes to sound too much like a southern cracker, for Bundy it is less a matter of hierarchy, more a matter of dependence.  If the blacks were better off under slavery, as he has suggested, it is because they are "dependent" or as he put it, "they were basically on government subsidy, so now what do they do?" he asked. "They abort their young children, they put their young men in jail, because they never learned how to pick cotton. And I've often wondered, are they better off as slaves, picking cotton and having a family life and doing things, or are they better off under government subsidy? They didn't get no more freedom. They got less freedom."  They violate the cardinal principle of individualism and, by his book, are better off dependent upon another individual, presumably one who can make some economic use of their dependency, than on his tax dollars.  None of this makes his remarks any less deplorable, to use Clinton's word, but the point of convergence for the racial attitudes of the west and of the south is a disdain for "federal programs" and the appropriation of what is ostensibly "mine" to support them.  On one side of the politicized disdain for taxes, we have a radicalized individualism and the moral rejection of dependency, particularly government dependency.  On the other side, we have a radicalized "natural conservatism" and the moral rejection of egalitarianism, particularly government forced egalitarianism.  

Which brings me to David Brooks.  In a recent NY Times editorial, implicit to this argument is the same question that I asked at the outset, "how much for the individual and how much for the community?"  He writes that, if "your primary identity is individual,"  then  "you’re perfectly within your rights to do everything you legally can to look after your self-interest," which would include tax avoidance.  "Within this logic, it’s perfectly fine for Donald Trump to have potentially paid no income taxes, even over a long period of time. As Trump and his allies have said, he would have broken no law.  He would have taken advantage of the deductions just the way the rest of us take advantage of the mortgage deduction or any other; it’s just that he had more deductions to draw upon."  The Daily Stormer, it seems, would agree, headlining a piece "Hey, Let’s Elect A Dumb President Who Pays More Taxes Than Owed!"  Or as Brooks goes on to point out, "it is normal practice in our society to pay as little in taxes as possible. There are vast industries to help people do this. There is no wrong here."

Having said this, the present reality of the tax code is a maze of provisions that provide incentives to "desirable behavior" as well as loopholes for "special interests."   Which are which is a matter of legitimate debate, but it's reasonably recognizable at the extremes.  The mortgage deduction serves as an example of the former, and it incentives the desirable behavior of home ownership.  Those who "follow the deductions," may have self-interest at heart, but their behavior nevertheless serves an economic and community need.  On the other hand, as Steven M. Rosenthal, a real estate tax specialist and senior fellow at the Urban-Brookings Tax Policy Center, remarked “If it wasn’t clear before, it is now: The tax code is tilted toward the rich in its statutory framework, its exceptions, and in how it is enforced and administered.”  We should not mistake of equating incentives with this "tilt toward the rich."  The former serves the community, but taking advantage of the latter, even when you are behaving "legally" by the strict definition of the law, ends up "serving your individual interest short term but soiling the nest you need to be happy in over the long term," as Brooks put it.  He goes on to write, "a healthy nation isn’t just an atomized mass of individual economic and legal units. A nation is a web of giving and getting. You give to your job, and your employer gives to you. You give to your neighborhood, and your neighborhood gives to you. You give to your government, and your government gives to you.  If you orient everything around individual self-interest, you end up ripping the web of giving and receiving."  Tax avoidance, in other words, is a way of "getting" without "giving," and "you can say that a billionaire paying no taxes is fine and legal, but  "that mentality is entirely divorced from the mentality of commonality and citizenship. That mentality has side effects. They may lead toward riches, but they lead away from happiness."

His argument is fine, but it ignores two things.  First, of course, it ignores Trump's "it takes one to know one" argument -- i.e. that he is "uniquely qualified" to close the very loopholes that have benefitted him so enormously.  One might ask what would motivate him to do so, given that it is difficult to credit him with anything resembling pure altruism, a pure love of community and country, since he has shown little propensity in the past for anything but self-interest and self-aggrandizement. No, to be fair, there is also a strong sense of "legacy" implicit in much of what Trump does, not only serving his own heroic "legacy," but passing on that "legacy" to his children.  There is nothing in this, of course, that motivates Trump to reform the tax code, and nothing that he has specifically proposed reforms the tax code to redistribute the tax burden away from the middle class toward the rich.  His tax cuts, as has been amply discussed, do a little for the less fortunate, and favor those with fortunes.  Overall, Trump's tax plan aims at "'reducing taxation on capital gains and high-income households,' said William Gale, a co-director of the Tax Policy Center and a former economic adviser to President George H. W. Bush."  Although he favors "sharply cutting income tax rates across the board," which would impact on middle and lower income families, he also favors "reducing taxation on capital gains and high-income households."   Mr. Trump would also "eliminate the estate tax (which currently applies to only about 5,300 of the richest families)" and secures his "legacy" for his children.  He also proposes ending "the 3.8 percent surtax on high earners’ investment income, which helps pay for health coverage for lower-income Americans" as well as  and scraping "the alternative minimum tax, which is aimed at making it harder for the affluent to take advantage of various tax breaks," precisely the opposite of "closing loopholes" for the rich.  Trump's tax plan preserves and protects his "legacy," which is, I believe, essentially, a monarchical concern, or as the "the Breitbart screed for the alt-right points out that "although the alt-right consists mostly of college-educated men, it sympathizes with the white working classes and, based on our interviews, feels a sense of noblesse oblige."

Second, of course, it ignores the politically motivated antipathy toward taxes in general.  When Trump leaned into the microphone and said, in response to Clinton's jab at his zero tax payment, "it would be squandered too," he rang a number of bells.  Although I would be loath to call George Will a racist, there is little distance between Cliven Bundy's assertion that the decadence within the black community can be traced to their dependency on "government subsidy" and Will's more urbane assertion that "Trump’s ascendancy reflects progressivism’s success in changing America’s social norms and national character by de-stigmatizing dependency."   One could argue, conversely, that Trump's ascendancy reflects conservatism's success in changing American's social norms and national character by de-stigmatizing not only the more radical forms of "individualism," that place self-interest above any sense of "taxable" obligation to one's community.  One could also argue, conversely, that Trump's ascendancy reflects conservatism's success in de-stigmatizing more radical forms of inegalitarian and intolerant thought above any sense of a "taxable" obligation to make one's community more just and inclusive.  Despite recent attempts to woo western votersTrump has more in common with the alt right than the radical individualism of the west.  As Will, and many of the conservative elite have recognized, but failed to acknowledge, "it's not the economy stupid."  Quoting Jack Donovan's book, The Way Of Men, Breitbart complaints that "it’s tragic to think that heroic man’s great destiny is to become economic man, that men will be reduced to craven creatures who crawl across the globe competing for money, who spend their nights dreaming up new ways to swindle each other. That’s the path we’re on now."   Even I would agree, it's a path to be disdained, though it is difficult to see Trump as the one who will lead us onto an alternative path.  One imagines that Trump spent many nights dreaming up new ways to enrich himself, both positively in the act of acquisition and negatively in the act of tax avoidance -- at the expense of both the few and the many -- nevertheless, he presents himself as and believes himself to be the "heroic man," the charismatic leader with a "great destiny."  As Breitbart goes on to point out, "for natural conservatives, culture, not economic efficiency, is the paramount value.  More specifically, they value the greatest cultural expressions of their tribe," and lest you miss the point, his "tribe" is "mostly white, mostly male middle-American radicals, who are unapologetically embracing a new identity politics that prioritises the interests of their own demographic."  Among his supporters, no one really cares if he didn't pay taxes -- indeed, they might actually see him as "brilliant" in avoiding taxes that would only be squandered on a "liberal" government that facilitates a debased -- that is to say, an egalitarian and inclusive -- culture.  

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