Austerity and Taxes

Steven VanDeLaarschot
Undergraduate/World Politics

There has been a lot of attention on the issues of taxes and America’s debt recently. Republicans continuously say that the debt and deficit need to be reduced, but under no circumstances can we raise taxes to do so or even close tax loopholes on companies making huge profits. This necessarily leads to spending cuts, which Republicans believe can handle the deficit issue exclusively. Their logic is simple, and absurd, by saying that all we have to do to reduce a deficit and debt that are in the trillions is cut government spending. Democrats have not pushed back as hard as they might have because anything that looks like raising taxes could cost them their seat when they run for reelection. But what seems to be getting lost in the debate seen on national television is what spending cuts would really mean.

In the anti-tax fervor that most Americans seem to possess, especially Republicans but some Democrats too, they also seem to forget what taxes do. Which seems weird to say, but the entire focus is always on the individual and what they end up paying in taxes and how everyone wants to pay less in taxes. People don’t seem to realize that taxes are the money that our government runs on, without taxes the government wouldn’t be able to fund anything. Taxes are the way that a government raises revenue and raises money to do things. Things like fund the military so we can defend our country, provide health care like Social Security and Medicare and Medicaid, build roads and bridges and airports, provide loans so that young people like us find it easier to afford to go to college, provide funding for colleges so that we have public universities that are more affordable than private universities, and provide things like National Public Radio and family planning services. Without taxes to provide money for the government none of these would be possible and private colleges are really expensive. For comparison, Lawrence University in Appleton, a private university, costs $53,000 a year while my education here at UW-Eau Claire will cost roughly $15,000 this year, making Lawrence over three times as expensive.

Now, I don’t expect UWEC will ever be as expensive as Lawrence, but tuition has been going up. There was a 5.5% increase just recently. One might wonder why tuition is increasing and, well, a big part is a lack of state funding. UWEC is a public university, which means it was established by the State of Wisconsin and funded by the State of Wisconsin. It is a part of the University of Wisconsin System, which includes quite a few universities all across the state. Recently, thanks to Walker the college-dropout, the UW System was given a cut of $250 million, but in all fairness it must be said that this is a continuing trend. If it wasn’t, student funds would not make up the 70% of UWEC’s budget that it does. Tuition from students, as in all of us, pays for the majority of this university while the State of Wisconsin only pays a minority of what is needed. This naturally makes college more expensive for a limited population, the students. If the citizens of Wisconsin, a much larger base than simply those attending University of Wisconsin colleges, paid a bit more in taxes we could have more affordable tuition. But lower taxes means less revenue being raised by the state government which means it can provide fewer services and less support for the people of Wisconsin.

Austerity means cutting back and living with less which means that government support and services that we either rely on or take for granted will suffer. Austerity means the bare bones and going back to basics. Which means what? Less regulation of businesses, which sounds cool to conservatives, but also things like less support for college students in the form of loans and scholarships and less support for seniors in the form of Medicare and Medicaid and Social Security. It means our infrastructure, roads and bridges and airports, will get worse and repairs will take longer to happen and could easily be of lower quality. It means less support for those who suffer from natural disasters like hurricanes, earthquakes, and tornadoes.

How people like Eric Cantor and Paul Ryan and all those tea baggers in Congress think only cutting back is a good idea is beyond me. Massive cuts will be needed to close shortfalls of over a trillion dollars and those cuts will be scrounged together out of funding for college loans and disaster relief and services that American citizens rely on until Republicans find the magic number that they find satisfactory. They won’t want to cut defense spending (because that’s unpatriotic) and they won’t close tax loopholes on oil companies and such that make massive profits, they’ll cut government spending that helps groups that aren’t well represented in Congress. Groups like college students, seniors, women, and minorities. People need to realize that austerity like this will do greater harm to those groups than higher taxes would. A sensible tax code for everyone would ask for something from everyone, but something everyone could handle and be easier to take than massive cuts in spending without any tax increases.

Some taxes are a good thing. They provide the funding the government needs to provide important services, like keeping the workforce healthy. Which is something the government decided to do all the way back in 1798 because they realized that the American workforce is more profitable and productive if they’re not sick all the time, although it was for a limited segment of the American workforce1. If people are sick, they can’t work and if they can’t work they can’t make money. So it was in the interests of the American people to pass health insurance legislation, in 1798, because if people have health problems and can’t pay to get better those health problems will continue. If there are continuous health problems that prevent people from going to work, they can’t make money and they can’t be productive and life is generally crappy. So its better to pay a little bit more in taxes so that the government can do cool things like provide health insurance or college loans and scholarships.

Here is another way to think about it. Say that you live in a state where there are one million tax-paying citizens. Say that this state wants to impose a new tax that requires everyone to pay $5. People would get pissed because they don’t want to pay more taxes, it’s their money and they earned it. Well, what would that $5 be used for? Gas? Five dollars honestly is not that much. But, if all one million people pay five dollars that is $5 million in additional revenue for the state government and that money could be used, for example, for more college loans so that more people can afford to get a good college education (and that could be a lot of loans if there are universities where the cost is only, say, $15,000 a year).

Another example that is more close to home is the Blugold Commitment, which is a $1200 increase in differential tuition over four years (so about $300 a year). It adds up to millions of dollars that the University and Student Senate use to improve UW-Eau Claire. That money is being used to fund new programs and sustain successful programs so that UW-Eau Claire will be a better place for students to learn, so that UW-Eau Claire will be more attractive to potential students, and so that the degree and diploma granted to those who graduate from UW-Eau Claire will be worth more in the eyes of future employers. 40% of the Blugold Commitment money goes to financial aid so that coming to UW-Eau Claire is more affordable2. The Blugold Commitment money also goes to funding such programs as the Eau Queer Film Festival, summer internships in communication and journalism, immersion experiences for nursing classes, building a stronger American Indian Studies major, and an immersion experience in Turkey to name just a few3.

There are plenty of services that governments and institutions provide that are a result of taxes. All this talk recently about spending cuts and how raising taxes is a terrible thing to do misses a key point. That point is that there are plenty of things that we take for granted or rely on that are a result of government spending and cutting back on these things for a bare bones vision of government will cause a lot of pain. That pain could easily be felt by us if college loans and scholarships are cut. This anti-tax fervor that essentially sees taxes as evil is not a good thing because we need government spending and in certain areas there is quite a bit of reliance on government spending.

Sources:
1 http://www.forbes.com/sites/rickungar/2011/01/17/congress-passes-socializedmedicine-and-mandates-health-insurancein-1798/
2 University of Wisconsin-Eau Claire Student Senate Bill 54-B-22, Adjusting the Financial Aid Portion of the Blugold Commitment
3 University of Wisconsin-Eau Claire Student Senate Bill 54-B-23, Approval of the FY 2011-2012 Differential Tuition Budget