Let’s try talking sensibly about taxes

I think governments should be frugal. That is no sure thing, because people are not perfect. Nonetheless, I regard paying taxes to be my patriotic duty and, indeed, my privilege. 

The following is a work of opinion submitted by the author.

Now that it’s election season, I’m hearing a lot of comments about taxes. Here are a few of my own.

I’m frugal. I don’t like to spend more money than necessary. I buy what’s on sale at the supermarket, use store coupons, and look for the lowest gasoline prices at stations along my routes of travel. I turn off lights when I don’t need them, keep the thermostat down in winter and up in summer, and separate items for recycling. I buy at hospital thrift shops. I eat leftovers. I spend less money than I have, pay credit card balances monthly, and avoid loans (even if home mortgage interest is tax-deductible). I defer gratification, saving up first and then paying cash for things I want. You get the idea.

I also am an entrepreneur and, after more than three decades, have never missed a payroll for my employees or failed to pay my bills. (If anyone doesn’t get paid when funds are tight, it’s myself, the CEO.) My firm is in business so that its employees can help make this world a little better than we found it. Along the way, we have been able to live comfortably but not lavishly. I earn little more than my least-paid employees; some years I earn less than they do, alas.

I pay my taxes. I am happy when I learn that I owe more income tax, because that says I have made more profit for the year than I expected. To me it is axiomatic that the more money I make from work in our society, the more tax I should pay. I do not begrudge my fair share to keep government and public activities going. I also put what I can into the collection basket each Sunday, because it is the right thing to do, whether I get any tax credit for it or not.

I think governments, too, should be frugal. That is no sure thing, because people are not perfect, and temptations are strong for elected officials quietly to gain from using other people’s money, to reward their well-heeled campaign contributors, and to structure both tax rules and public spending unfairly. Nonetheless, I regard paying taxes to be my patriotic duty and, indeed, my privilege.

My taxes are essential to support the work of governments — local, state, and federal — that do much I cannot do for myself. The only complaint about taxes I have is that too often they get enacted and spent by politicians who don’t share my values, who fail to look out for those who need help most, who fail to work to make governments more efficient, who don’t try to banish secrecy, and who don’t strive to make the bureaucracies actually deliver on promises made in the glowing language of Fourth of July speeches or in laws and ordinances and regulations.

Americans pay about a quarter to a third of our gross national product in taxes of all kinds — not much compared with other civilized countries that have equally high standards of living. Like me, most of us depend on many public services without even thinking about what government does for us, at least not until something goes wrong. Our taxes need to be spent well, but first they need to be paid.

I do not fear the probable cuts in services and increases in taxes if our current federal budget impasse is not resolved through compromise by year’s end and in fact crashes over the muchballyhooed cliff of sequestration and tax hikes. Better that than continue to spend vast sums of money from unlimited borrowing just because of knee-jerk fears of enacting adequate taxes. But I hope our elected officials devise prudent adjustments that both lower public spending and raise public revenues — adjustments more intelligent than mere automatic budget cuts and tax increases.

James A. Schmid lives in Media, Pa., and is the CEO of Schmid & Co., Inc., Consulting Ecologists