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The old progressive notion of American income taxes--still viable though modern conservatives simply will not hear of it--is that the income tax is the fairest tax of all because, absent rate increases, you only pay more if you come into more.

Conversely, if you lose your job and don't have as much money as before, then you pay less in income taxes, or even nothing. But you still must make certain basic consumer purchases applying the same level of taxation no matter your circumstance.

The sales tax has no conscience. The income tax has one.


People railing loudest against income taxes ... they just got a raise, or promotion, or bonus, most likely. And their complaining rings a bit hollow.

No matter the percentage applied to calculate their taxes on their additional income, their burden remains but a percentage of their new bounty, and they're going to be better off than they were before they came into it.

Conservatives like to say Americans are discouraged from doing better because of the punitive, confiscatory nature of personal income taxes. But I personally know firsthand of no person declining additional money because it would be taxed at 39 percent, leaving him only 61 percent of the additional money.

Sixty-one percent of more remains better than zero percent of the same.

Gripe? Yes. Give it up? No.

But there was one other principle that some of the early progressives espoused when creating the American income-tax system a little more than a century ago. It was that the federal government should design an income-tax structure to produce the amount of money it needs, but never try to use that income-tax system to do anything more than collect an adequate amount of money fairly. It was that government should not try to use the tax system to force behaviors.

That principle hasn't been followed so well, or much at all.

Our tax code is a thick mountain of overlapping complications because of myriad efforts over the decades to try to influence behavior with deductions and credits--and, as it happens, penalties, such as one under Obamacare for not having health insurance, which is now under attack in the Republicans' Senate-side tax bill.

The essence of the Affordable Care Act is that everyone should have health insurance not only for their own good, but for the good of everyone. That's because premiums could be kept more affordable through a universal pool of premium-payers.

The best way to enforce that mandate is with a fine for noncompliance. And the most efficient way to collect that fine is in an additional line or two on annual income-tax returns.

That's entirely a matter of convenience and efficiency.

We could create a new agency to keep a registry of every American's health insurance situation. We could establish an enforcement division to seek to collect noncompliance penalties. But it is infinitely cheaper and easier to print a couple more lines on those already universally circulated income-tax forms.

It makes sense that we've piggy-backed the income tax nearly to death. It's so handy.

Now Senate Republicans, most of whom abhor Obamacare or are strung out from telling their voters that they do, are proposing to eliminate that individual mandate and the intended stick of the tax penalty.

Presumably, a lot of working people, relieved of the tax penalty for noncompliance, would blow off their health insurance.

The Congressional Budget Office says 13 million Americans will do that very thing and send premiums rising at a rate of 10 percent a year for the rest of us.

And Republicans would do celebratory somersaults over the savings--or, as I put it, the throwing of millions of Americans off health insurance.

The nonprofit Kaiser Foundation, citing surveys, says maybe not. It thinks most insured Americans, confronted upon renewal with still-subsidized premiums, would tend to re-up year-to-year even without a mandate and penalty.

Polls depend entirely on the phrasing of the question.

Do you think the federal government should force you to buy health insurance and penalize you on your income taxes if you don't? Oh, no.

Do you think Republicans should continue to try to dismantle the Affordable Care Act by repealing key elements of it like the individual mandate? Oh, no.

Here are the real questions: Should our income-tax system be retained but made simpler? Should health insurance be required of the citizenry? If so, should the government subsidize premiums for low- and middle-income persons? If so, should the government impose a financial penalty on those not getting health insurance? If so, is the annual income-tax return the best place to assign that penalty?

For me, it's yes to that entire paragraph.

We can and should live both by rules of fairness and rules of expediency, if all those rules serve a functioning government and ensured health care for everyone.

------------v------------

John Brummett, whose column appears regularly in the Arkansas Democrat-Gazette, was inducted into the Arkansas Writers' Hall of Fame in 2014. Email him at jbrummett@arkansasonline.com. Read his @johnbrummett Twitter feed.

Editorial on 11/26/2017

Print Headline: Fairness and expediency

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  • lohr52
    November 26, 2017 at 7:32 a.m.

    JB asked the correct question in the middle of the column. Should the IRS be used to force certain behavior?
    Should health care be a tax issue? If you are overweight, pay an extra tax? Never go to the gym? Pay an extra tax? Can employers force behavior since they are required to pay for health insurance? Can I get a tax credit for an eight minute mile?
    The IRS code is filled with carrot and stick rules. Lots of credits and penalties to encourage and discourage behavior. Why not eliminate all and just collect the money in a transparent way?

  • PopMom
    November 26, 2017 at 7:56 a.m.

    The carrot and stick behavior can be very good for us. I am all in favor of everybody having to have health insurance. The 401(k) and other retirement and college savings plans are good for us. I used to doubt the importance of the mortgage deduction, but it forces us to buy homes and give us a sense of stability and forced savings. Children need homes and parents who stay together, and the mortgage deduction operates as a carrot and stick to accomplish the greater good. We also should move toward some form of deduction or credit for health clubs and weight watchers etc. We've also need to police food additives and fund more research on obesity. Physical education in the schools should be mandatory every year. The country should embark on a PSA campaign against sugar to rival the anti-tobacco campaigns of yesteryear. With that, I am off to the gym.

  • RBear
    November 26, 2017 at 8:50 a.m.

    Brummett ends this column with a great view on how to move our nation forward to help benefit all. Republicans have spent over 7 years attacking the ACA, primarily because it was a creation of Obama and Democrats (McConnell even prided himself in wanting to make sure Obama was a one term president). But all along, instead of coming up with an alternative plan for helping improve our health care system they did nothing of the like.
    ...
    Now, they are trying to reform taxes by taking away a LOT of deductions to provide benefit to the wealthy and corporations. As we have discovered, to meet their requirement of reconciliation they have targeted the individual mandate that was originally designed to help stabilize the coverage market. Once again, no alternative but as they have proven over the past decade they really don't care.
    ...
    Our tax system is a means to offer incentives for improved economic behavior. 401Ks were put in place to encourage Americans to save for retirement. 529s were put in place so parents could save for their children's education. Deducting the cost of student loans gave those graduates some relief while starting their careers. Not everyone takes these, but having them as opportunities helps improve our nation overall.
    ...
    Taking the individual mandate away without a reasonable replacement for health care coverage is like taking someone hostage to extract a bigger reward. There really is no long-term plan by Republicans. There's just a bunch of hacks to get a few rewards for the wealthy.

  • lohr52
    November 26, 2017 at 11:04 a.m.

    So the answer is to have the federal government make rules in all aspects of your day to day life. Reward the actions you like and punish those you believe do not contribute to the common good. Strong central government vs weak central government. Jefferson and Adams strongly disagreed on this and their friendship suffered for decades. I think Jefferson was correct.

  • TimberTopper
    November 26, 2017 at 12:55 p.m.

    lohr52, in todays world as complicated as it is, There probably is no such thing as a weak centralized government. Today, it just wouldn't work. So there's no reason to waste one's time thinking about how wonderful it "might" be cause it wouldn't be wonderful. It would be one hell of a mess! The smart thing to do is NOT cut taxes. If we are collecting too much in taxes, then the excess can be paid on the federal deficit. Seems like before the Republicans got into power this time they were concerned about the size of the federal debt. And here we go again, Bush 43 cut taxes, federal debt increased, and here is 45 wanting to do the same. You know, in a lot of ways the American people are dumb as hell!

  • PopMom
    November 26, 2017 at 3:19 p.m.

    lohr,

    The trick to good government is to regulate the things which need to be regulated without imposing an onerous burden on businesses. Some of the Departments could be downsized and some regulations lessened. One thing I hear from business owners is that there is too much paperwork associated with the ACA. The EPA was working well, but then Trump happened. Some things such as the use of cancer causing chemicals needs to be better regulated. I don't agree with stripping the regulations off the financial industry. One thing which bothers me the most is the effect of Citizens United and the use of dark money in campaigns. When we vote, we should know who is placing the ads. Also, in parts of the country where the populace is less educated, the voters are less discerning when it comes to separating fact from fiction.

  • lohr52
    November 26, 2017 at 3:59 p.m.

    i agree we cannot go back but that does not mean the central government must make more and more decisions. A progressive tax system is fair. The rates should be debatable. I like dogs. I believe they add to the quality of life. Should my dog food purchases be deductible? If so, you are subsidizing my love of dogs. Is that fair? Is it a fair use of our tax system?

  • carpenterretired
    November 26, 2017 at 9:29 p.m.

    Bingo to TimberTopper , but the old question for one fellow ,does the dog bark?

  • TimberTopper
    November 27, 2017 at 5:04 a.m.

    lohr52, no to your dog food deduction, and hopefully we have no one in public life that would even propose that. PopMom, brings up a very valid point regarding money in politics. In my humble opinion, corporations are not people as ruled by the SCOTUS. While they are owned in shares by people, they should not have the same rights as people. People die, people feel, people think, and corporations do none of those things and probably more. Romney, was and is bad wrong in his statement!

  • PopMom
    November 27, 2017 at 6:15 a.m.

    Lohr,

    You make a valid point when you suggest that you do not want a deduction for everything. I do think the mortgage deduction has produced a country in which people own their homes, which in turn produces more savings and probably more stability in home life. I also know that the 401(k) program has caused many of us to save for our futures. Obesity is a problem which does need addressing. So many people in America have lost control.

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