A Taxing Week

By Hank Silverberg

A few years back while doing a story on the financial stability of a local hospital, I was reading through the facility's annual report. It kept referring to “negative patient outcome,” and it took me a few minutes to realize they were talking about the death rate among patients. Over the years, while covering numerous county boards and city councils, I often heard politicians talk about the need for more “revenue enhancements,” and it was clear that "revenue enhancements" was a code word for taxes.

 So, I begin this week’s blog with an old saying slightly modified. There is nothing certain in life except negative patient outcome and revenue enhancements.

It’s been a taxing week. I had to write a fairly large check to the U.S. Treasury to meet the April 15^th income tax deadline, and like millions of Americans, I am not happy about it. Don’t get me wrong. I fully believe that each citizen should pay their fair share of taxes to do what the U.S. Constitution says the federal government should do: “provide for the common defense, [and] promote the general welfare” of the people. I’m just not sure the leadership in Washington has been doing that.

Let’s take a closer look.  Here’s a pie chart of federal spending for fiscal year 2018.

Social Security, the INSURANCE that every American worker pays into, is the largest portion of the budget at 24%. We paid for it. It is ours. Congress is not supposed to touch it. It is somewhat ironic that Congress, in its infinite wisdom, decided that we were going to be taxed on money we set aside, in the government’s care, for our retirement. But we pay it. The issue over the last decade has been our lawmakers continued violation of the rules which say the Social Security Trust Fund can not be used to pay for other things. They have raided it numerous times and moved money elsewhere, destabilizing the fund and money promised to every working American when they retire. They have also gradually moved the retirement age up from 65. For me it's 66. For those just a few years younger its 67. 

Medicare also takes up a substantial portion of the federal budget—14% in fiscal 2018. Again, that is medical insurance for our old age which we have ALL paid for with a guarantee that it would be there for us when we reach 65. The much-maligned Obamacare amounts to just 1% of the federal budget.

I won’t break it down in detail. You can see the chart.  But the key category of “non-defense, discretionary,” about 16% of the overall budget, is where all the debate comes in.

I paid my taxes this year just a few days after the latest report on our decrepit roads and bridges came out. Seventy thousand bridges across the country are considered structurally deficient. Our airports are outdated and our roads are falling apart.

https://www.cbsnews.com/news/falling-apart-america-neglected-infrastructure/

 The best example would be the Baltimore-Washington Parkway, technically maintained by the National Park Service. 

https://www.washingtonpost.com/transportation/2019/03/27/emergency-pothole-repairs-begin-friday-baltimore-washington-parkway-federal-officials-say/?noredirect=on&utm_term=.7142298f2b12

The road is in deplorable shape because the NPS has no money to fix it. The speed limit has been lowered to 40 in some places for safety reasons and emergency pothole repair has slowed traffic even more. 

The story is similar on many interstate highways and bridges all across the country where state and local governments have been unable to fill in the funding shortfalls. The federal government allocated $19.3 billion for ALL transportation in 2018. President Trump has proposed cutting that by 3.4 billion. Some states are now looking at more tolls (revenue enhancements) to make up the difference  

Defense spending, in our 18^th year of the “War on Terror” remains high at $606 billion, and there’s a proposal from the current administration to raise it another $80 billion for 2020. It can be argued it is necessary for our security. But a few billion dollars of that allocation is being moved over to build an unnecessary wall on the border with Mexico. I’d rather see that military construction money used to fix the unhealthy conditions of military housing for active duty troops and their families or diverted to better health care for veterans. 

(Mold on walls on military housing. Courtesy of  stripes.com)  

https://www.npr.org/2019/02/13/694366838/military-families-in-privatized-housing-afraid-to-come-forward-survey-says

  About 16% of the federal budget is what is called “discretionary.” It is here you will find the programs that Congress seems to argue about—things like food stamps, Planned Parenthood funding, veterans affairs, medical research, environmental protection, education, national parks, agriculture subsidies, housing, foreign aide and even the State Department. Cuts are proposed in all of them for fiscal 2020.

https://www.washingtonpost.com/graphics/2018/politics/trump-budget-2019/?utm_term=.b247cd664012

 In order to spend money, the federal government must collect it.  According to the Center on Budget and Policy Priorities, almost 48% of that revenue comes from individual taxpayers, 35% comes from payroll taxes and goes right into the Social Security Trust Fund, and 8% comes from other taxes like real estate taxes, or sales tax on things like fuel, alcohol and tobacco.

 About 9% comes from corporate income taxes. Those are the same corporations that the Supreme Court has ruled in the infamous "Citizens United" case should be treated like people when it comes to campaign contributions. But they don't pay the same tax rate as the rest of the "people."

In 2017 taxes raised $3.3 trillion. But the government spent $4 trillion and borrowed $665 billion dollars to make up the difference. If you look at the pie chart you will see that last year 8% of the budget was used just to pay interest on the national debt.     

Seventy-five percent of all individual taxpayers received a refund last year. The figure will be slightly lower this year and so will the refunds, all attributed to the tax cut approved by Congress. Less was taken out, so refunds will be smaller. For some, tax day payments to the government will be bigger for the same reason--less was taken out.  

So, what’s the bottom line? For me it’s not my tax bill that matters right now, or the lack of a refund. It’s what our government is doing with the money.

Congress has not passed a comprehensive transportation bill in three decades. It has consistently raided the Social Security Trust Fund that is supposed to be dedicated only to retirement checks. And the current administration wants to cut even more from agencies like the EPA and Education Department. Something is wrong here and there is not a politician out there who has a plan to fix it.  

 I think about that every time I roll over a pothole while crossing a rusted bridge over a dirty river, or check the deductions from my paycheck. That’s something to focus on when you write a check to the IRS or deposit your smaller refund.

                 (Your comments or Suggestions are welcome)

(Signed Copies of my book “The Campaign” can be obtained by at a reduced price by emailing me at HankSilverberg@gmail.com for instructions. They can also be ordered at Amazon.com, BN.com or hanksilverberg.books.com)