Higher taxes vs. long-term debt: Take the
taxes
Newsweek
BY JOHN RICHARD STARKEY
November 1, 2005
'Stakes High in Vote on $2.9 Billion Bond Act."
That is how one newspaper headline recently described the transportation
proposition - No. 2 - on the Nov. 8 ballot.
I would submit the headline understates the situation. At issue in the
bond act is not only whether improving the state's transit network justifies
adding to the state's heavy debt burden. What's also at stake is survival of
the shaky political will to take unpopular but responsible stands.
Most of us know that paying up front to maintain public facilities,
amenities and services is preferable to borrowing to pay for them. Long-term
capital improvements are another matter. But often - and this is true of
Proposition 2 - the line between capital and maintenance is blurred. For
example, is "reconstruction" of Route 347 at Smithtown, Route 112 at
Brookhaven, Korean Veterans Parkway on Staten Island and Highway 17 in
Binghamton not simply another way of disguising deferred maintenance?
Polls have shown the public has no problem investing in public services
through taxation. The catch is that the taxes, if they are to be imposed on
income, must be perceived as fair, proportionate to what a person can afford.
Such a progressive tax has long been a non-starter in New York. Instead, the
state has accumulated one of the highest bonded debts among its 49 counterparts
and the second worst credit rating next to California's. A less noted
consequence of this consistent pay-later policy is that polls now indicate New
Yorkers have become favorably disposed to momentarily painless borrowing.
What can account for that change in attitude? Habit may be one answer;
despair or exhaustion another. "In a two-party system," writes historian Howard
Zinn, "if both parties ignore public opinion, there is no place voters can
turn."
The two-party disregard of public opinion on taxation can be traced to
the 1976 United States Supreme Court decision that allowed unlimited amounts of
money to be used in political races. Within two years, elected officials
were responding to contributors with vested interests - rather than to
constituents. William Greider assesses the situation in his book, "Who Will
Tell the People? The Betrayal of American Democracy":
"For those who blame Republicans for what has happened and believe that
equitable taxation will be restored if only the Democrats can win back the
White House, there is this disquieting fact: The turning point on tax politics,
when the monied elite first began to win big, occurred in 1978 with the
Democratic Party fully in power and well before Ronald Reagan came to
Washington. Democratic majorities have supported this great shift in tax burden
every step of the way."
When both parties support a policy - such as tax cuts for special interests
instead of fair-share tax increases - the news media cannot be faulted for
amplifying the bipartisan position over that of anyone who opposes the policy.
Favorable publicity and tireless politicians explain why the Transportation
Bond Act is being promoted so effectively. At a political meeting in Manhattan
recently, the state Senate's deputy minority leader had his promotional pitch
interrupted. A questioner asked why having people pay a little more in income
taxes wouldn't be preferable to the bond issue. The senator, Democrat Eric
Schneiderman, replied like a Republican. "New Yorkers already pay high taxes,"
he said.
"Will a raise in the income tax continue to be off the table," a follow-up
questioner asked, "if a Democratic governor is elected next year?"
"Tax revision, maybe," replied Schneiderman. The implication concerning a
tax increase was clear - not a chance.
Some years ago, a leader of the budding European Union predicted that the
United States would reawaken to the value of taxation as an instrument of
"social cohesion," bringing Americans of all classes and races together in
improved schools, efficient trains, clean parks and on well-maintained
beaches.
A vote against the bond act will surely not be a vote for tax-encouraged
social cohesion. But it may slow the trend to what is becoming political dogma:
Do anything to avoid having to invoke the "t-word."
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