A new Gallup poll shows that Americans, when asked to estimate government waste, give a mean answer of 50 cents for every dollar. This is up 25 percent from 1970, when Americans thought the federal government wasted a “mere” 40 cents of every dollar. If you think about it, this answer suggests a profound cynicism about Washington DC. It’s also an expensive cynicism (Stephen Moore, in the Wall Street Journal, calculates that this means we believe the US government is wasting a solid $2 trillion annually).
Obviously, the main way the federal government raises this money is through taxes. So, given that the average American believes Uncle Sam is wasting half the money we send in, why has lower taxes not been a winning issue for Republicans of late?
The first reason, it seems to me, is that Republicans aren’t pushing this message particularly hard. Plenty of Republican politicians get plenty of benefit from this waste (see the Alaskan Bridge to Nowhere phenomenon), and plenty others prefer to beat the drums of God, military, apple pie, morals, senior citizen death panels, etc. These aren’t really fiscal issues, per se.
Second, an increasingly high proportion of Americans do not pay much in taxes, personally. Indeed, the increased use of refundable tax credits has made the tax burden for many middle income families fairly small. These families include the Joe Six Pack types that Republicans are now trying to court. While we fully know that government wastes money, as long as it’s someone else’s money, that’s not so big a problem, especially if you believe the “someone else” is some moneyed fat cat spending $1.2 million to upgrade his Wall Street office as his bank is failing. The fact that it’s just as likely to be a small business owner who has personally created six jobs (and is trying to maintain that payroll in a tough economy) doesn’t really get the headlines.
But it should. I have been thinking, of late, that there really needs to be a political party billing itself as the party of job creators. What this recession is revealing is that for all the complaints about overwork, Americans are happiest when they are gainfully employed. Most jobs are created by small businesses. These small businesses and their employees (and the growing population of free agents) could be a political force.
And so, I’ve been fascinated to see a new group calling itself the Free Enterprise Nation taking out ads in major media outlets this week pointing out that various governments are taxing the private sector to provide benefits and salaries for public employees that the private sector can’t afford. Between wages and benefits, the organization claims, the average public sector worker got $119,982 in 2008, compared with the average private sector worker’s salary and benefits take of $59,909.
I’m not entirely sure who is behind these ads — if it’s an “Astroturf” movement or what — but it got my attention. We shall see if anything comes of it.
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Laura Vanderkam is the author of 168 Hours: You Have More Time Than You Think (Portfolio, 2010) and Grindhopping: Build a Rewarding Career without Paying Your Dues (McGraw-Hill, 2007). She is a member of USA Today's Board of Contributors, and her work has appeared in Reader's Digest, Scientific American, Wired, The American, Portfolio and other publications.
Write to her at lvanderkam at yahoo dot com.
I totally agree as a small business owner. Between our property taxes and our business taxes my husband and I we paid over $10,000 last year in taxes and our net income was only probably two or three time this figure though our gross sales for the year were up some 20 percent and were in the good six figures. This year our sales will probably be flat if we are lucky but we will still pay the same taxes, and our property taxes will go up.
Also we always pay our taxes and a lot of our small business friends don’t and that also unfair that they just take their chances and businesses that pay dont’ get some kind of reward for paying our taxes as good corporate citizens (we really do not) b/c we have to pull that tax money from our cash flow even in a bad month or in this case a down year, etc. and the gov. doesnt’ really care or say hey, pay us next year re invest the money.
My friend’s daughter rides a school bus — a full bus, the big yellow kind we all used to ride as kids that should seat like 40 kids — with four children on it. Four children. The number of buses alone driving along our roads in my community at 7 a.m. is a huge problem and we wont’ even go where the real big money corruption is. I know that money I could have invested in my business and it does anger me and it definitely angers me as a small business owner more than my employee friends and neighbors who still get health benefits and commuter tax credits and a lot of things we can’t get as small business owners. Also I think it is really unfair that I can’t write off the salary my business pays me as an expense to the business b/c we are an LLC.
Our taxes were less than 5 percent of our total revenue but it would be great if the government asked you to re invest money in your business and gave you a bit of a tax break say for the first five years of your business as long as you could create say x number of full-time jobs at the end of five years. Because running a start up small business or a business say in any big recession is really about the long term, like how we grow over time say over five years, and they (the government) really dont’ do much to motivate us to grow over time or to stay in the lifestyle of the small business owner which is grueling. I will be doing deliveries Sat. a.m. or working when a lot of my employee neighbors are doing more fun Sat. a.m. things.
I definitely feel like the government gets paid first and it is like whatever to us as small business owners, I think most folks in government have NO concept of what it means to run a business. this is obvious from the way many of them create and fill purchase orders, like sometimes they will “forget” to put in the Po meaning our pay cycle can get extended 30 to 90 days. And to them that is an annoying thing on their Friday to do list but to us that means and employee might have to get paid or we have a cash flow crunch. So I think really as salaried benefited employees government employees and even highers ups really do not understand what it means to assume the r isks of a running a small business.
Laura
Thought you might like to see these books… I am going to buy them..
Martin Buckingham’s latest book, Find Your Strongest Life: What the Happiest and Most Successful Women Do Differently, Buckingham asserts that we were happier back when we had fewer career opportunities, got paid less, had fewer choices and weren’t a political force to be reckoned with. And he has survey results to back it up. Every year since 1972, the United States General Social Survey has polled men and women about their happiness, and every year women have reported being less happy.
Buckingham advises us to forget about finding balance. “You study the happiest and most successful women, and they deliberately pick out the moments in life that invigorate them and then tilt, target, imbalance their lives toward those moments,” he says. Imbalance as the path to happiness?
Moms: Looking for another good read? What Happy Working Mothers Know by Cathy Greenberg, Ph.D. and Barrett Avigdor J.D.
Laura
NJ doing tax amnesty program to collect biz taxes AGAIN..
This is what I was talking about about not rewarding good small business citizens and rewarding the bad
Sunday, February 22, 2009, 11:01 PM
> New Jersey tax evaders can settle up without penalty
> From the Sunday Star Ledger
> Attention tax cheats: New Jersey is willing to forgive and
> forget — again. With the recession chewing a gaping hole in
> tax revenues, New Jersey is one of several states turning to
> a tax amnesty program to raise extra cash.
> The proposal, one of several budget-balancing steps
> announced by Gov. Jon Corzine last week, would allow
> deadbeat taxpayers to settle up with the state without
> paying the usual penalties. Interest charges of 5 percent
> would still apply for individuals and businesses, officials
> said.
>
> Tony Kurdzuk/The Star-LedgerGovernor Jon Corzine pauses
> during a speech at a
> Feb. 17 press conference at the Department of Labor, where
> he announced state
> tax revenues have fallen below projections and below the
> level of when he took office.
> It’s the third time New Jersey is going to the tax
> amnesty well since 1996.
> Corzine is hoping the tried-and-true method — New
> Jersey’s last two tax amnesties raised a cool
> half-billion combined — produces $100 million this spring.
> He is trying to plug a budget deficit of $3.6 billion for
> the current fiscal year, which ends June 30.
> “It’s a logical place to go, given that we have
> very little wiggle room,” said Sen. Barbara Buono
> (D-Middlesex), chairwoman of the Senate Budget and
> Appropriations Committee. “We’re being driven by
> these times to the edge of a fiscal abyss, and I think we
> need to use every tool that we have to avert falling off
> that cliff.”
> But skeptics say the amnesty is a gimmick that will not do
> much to mend New Jersey’s finances. Critics also charge
> that offering frequent amnesties — the last was in 2002 –
> leads residents to expect them and avoid paying taxes
> promptly.
> “The one-shot revenue helps — but the fact that
> it’s encouraging non-compliance hurts later on,”
> said Sen. Steve Oroho (R-Sussex), another budget committee
> member. “I think it does encourage bad behavior.
> That’s why you don’t do it all the time.”
> Administration officials defended the proposal, saying
> amnesty would not have been offered if the economic
> situation were brighter.
> “We are in the midst of a fiscal emergency, and the
> options for rebalancing our current year budget at this
> stage of the fiscal year are very limited,” said Tom
> Vincz, a spokesman for the Treasury Department.
> Analysts say it is difficult to measure how many people
> take amnesty offers as a license to disobey in the future.
> But states frequently opt for the cash, because it is
> preferable to other alternatives such as borrowing, said
> Verenda Smith, a spokeswoman for the Federation of Tax
> Administrators.
> “A little bit of lost future compliance in an
> emergency has traditionally been an acceptable level of
> loss,” she said.
> With the economic meltdown straining state coffers across
> the country, other states have gone down the amnesty path.
> Connecticut and Massachusetts are in the midst of amnesty
> programs, while Louisiana has one planned, Smith said.
> Oklahoma and Nevada offered amnesty last year, and both
> collected more revenue than expected.
> “Usually amnesties are a leading indicator of cash
> flow problems in a state,” Smith said. “It is
> tried, it is true, and it does bring taxes in the
> door.”
> While most recent amnesties nationwide have matched or
> exceeded expectations, it’s unclear how a “wild
> card” like the severe economic downturn will affect the
> response now, said Bert Waisanen, a fiscal analyst at the
> National Conference of State Legislatures.
> “You don’t know what people are going to do,”
> Smith said. “People aren’t behaving in ways
> they’ve behaved in the past.”
> In the past, they paid up — often at the last minute. New
> Jersey netted $277 million in 2002, higher than its $150
> million goal, although that plan waived both penalties and
> interest. Another amnesty yielded $244 million in 1996.
> This time, the taxpayer would still be responsible for
> interest charges of 5 percent, and a 5 percent penalty per
> month for late filing, up to 25 percent, Vincz said. All
> other penalties — which vary depending on the tax — would
> be forgiven, he said.
> The $10 million program, to be introduced in the
> Legislature in the coming weeks, would run for 45 days,
> starting in April and ending by June 15. Those who owe back
> sales, income, corporate or any other state tax would be
> eligible. The amnesty would cover unpaid taxes that were due
> between Jan. 1, 2002 and Jan. 31 of this year.
> Notices will be sent to individuals and businesses that the
> state already knows owe back taxes, and an advertising
> campaign will help encourage those still hidden, Vincz said.
> He said the state has yet to decide on the exact promotions
> or how much of the $10 million will be spent on them.
> In 2002, the ads blared: “Nowhere to run, nowhere to
> hide.”