Of Taxes and Men

Publication: Volume 1, Issue 13 - December 17-23, 2010
International Tribune 

No taxation without representation! The battle slogan during the American revolution against the tyranny of the English king on the thirteen colonies in the New World. Why should they pay taxes when they had no say to the rule of the throne ten thousand miles across a vast ocean? Three centuries later, in the new republic, the forgotten middle class America could still cry out the same creed and they should.  A major tax-cut bill was passed by the Senate early this week that was expected to stimulate the current sluggish national economy although most economists disagree.  This is the continuation of the expiring Bush-era tax cut a la Obamanomics which favors high-income households and companies. The White House and most lawmakers (mainly the Republicans) in the Capitol Hill see this as the "silver bullet" that will solve - to a very large extent - the huge deficit of this nation and the worse unemployment rate since the Great Depression of the early 1930's.

Historically, if one analyzes the relationship between the government and the nation's elite, there has only one seemingly consistent pattern, when the Republicans control the Legislative Branch of the government, the wealthy class gets the better tax deal with the underlying assumptions that: (1) the wealthy will spend more and, therefore, stimulate the economy; (2) companies will invest on new capital resources and, ultimately, hire more workers.  Should we trust Capitol Hill for siding with the elite who owns the big companies that they will follow through their pledge?

America has been a conservative nation when it comes to taxes and its relationship with business owners – as big as Google Inc. and as small as your corner mom-and- pop store. In essence, what American business owners want is less government interventions and more of the laissez faire doctrine as expounded more than two centuries ago by the classical economist Adam Smith.  Less taxes mean better profits for the business. Same as what our Founding Fathers cried out for during the revolution. Maybe we are no longer dumping crates of teas in the Boston harbor as a tactic but we are certainly having tea parties to oppose - sometimes at any cost - just about almost anything the Obama White House fiscally plans for America. 

“What is abundantly clear to everyone in this town is that Republicans will block a permanent tax cut for the middle class unless they also get a permanent tax cut for the wealthiest Americans, regardless of the cost or impact on the deficit,” thus said Obama in defense of his proposal.

Is this tax law the end of the world?  Indeed not by a long shot. Thanks largely to America's resilient economy. It started with President Bush almost a decade ago and America is still standing. However, it has certainly been crippling the average Joe in our society. Parents have to work more hours to put food on the table. Quality family time has certainly been diminished- which has a major sociological impact on ordinary people that is priceless beyond any statistics.  And when all is said and done, it is the middle class who is always denied the fair share of the pie - which is the real promise of the American Dream.