Making a Case for Taxes
Fundamental to every public policy is the ability to fund that policy. And yet, issue advocates typically avoid communicating about taxes and budgets, leaving that challenging work to budget policy experts. Recognizing the need for a broad and ongoing culture shift that breaks out of issue silos, Topos has made tax and budget policy a major focus of its work.
Advocates and reformers need stories and concepts that can compete with average Americans’ default view that taxes are already too high, unfairly burdensome to them, and mostly wasted by politicians. People easily forget that taxes are not just money taken away from them, but represent a critical shared investment in our lives and communities. Complicating matters, a great deal of discourse about taxation and tax reform takes place at the state level, which presents distinct and diverse challenges for advocacy.
One particular challenge shared across most states is that tax policy can deepen inequities, but advocates struggle to build public support for progressive tax policy. The Cultural Common Sense tells people that flat taxes are fair.
To address this particular challenge, Topos research finds that an explanatory model, anchored by a vivid metaphor, allows people to quickly grasp the concept of progressive taxes AND why increasing taxes on the wealthy is good for all of us. In short, the tax system is upside-down – it asks more of those with the least, and asks the least of those with the most. If we balance the tax code, if the wealthiest pay the same proportion as the rest of us, we’ll have what we need to invest in our communities so every community thrives.
This is a surprising, new idea for most people that quickly builds public support for solutions to make the tax system more equitable. Advocates across the nation are using this explanatory metaphor to great effect, adapting for different state dynamics as well as COVID:
In fact, most states have upside-down tax systems with the poorest 20 percent paying a significantly higher average effective tax rate (11.4 %) than the top 1 percent (7.4%). In other words, we can only ignore states at our peril… States must take the opportunity to dramatically rebalance their tax codes, making safety net programs truly re-distributive. If the federal government hits the gas while states hit the brakes, we will get nowhere fast. Consumers won’t have access to cash; the economy won’t recover; political revolts will make it impossible to build a coalition for the kinds of social investments necessary to truly check inequality.
“COVID-19 Unveils Need for Fair Taxation Movement at the State Level,” by Ben Chin, deputy director of the Maine’s People Alliance, Common Dreams, June 09, 2020
Lacking an income tax, Washington has the most upside-down tax system in the nation — if you are poor or middle class, you devote between 9 and 18% of your income to state taxes. Those of us in the top .01%? We pay next to nothing.
And this is our secret weapon: for no other state has more fiscal space to ask its wealthiest residents to contribute more.
The budget hawks are wrong. We have a choice. Austerity is not our only option. If we finally choose to tax our state’s plentiful reserve of income and wealth, we can avoid the painful mistakes of past recessions. We can afford to choose to invest in a quick and broad-based recovery.
“Washington state must tax the rich, like me, not slash its budget,” Seattle Times, by Nick Hanauer, entrepreneur and a venture capitalist, the founder of the public-policy incubator Civic Ventures and the host of the podcast Pitchfork Economics, June 21, 2020