How taxes are collected and spent can be a contentious topic. In your opinion, what should our tax dollars be spent on?
Opinions on taxation vary quite widely. At one extreme are people who would prefer to eliminate taxation completely. Others would like to drastically increase taxes, particularly on wealthy individuals, in order to fund community services.
Some of the services that are typically under the federal purview are infrastructure projects, including highways, bridges, airports and shipping ports. Basically, if a structure or system spans different states, or is too large for any one state to fund and manage, the federal government gets involved.
Similarly, taxes typically pay for defense, including various military services, weapons systems, and the like. These are used for defending the entire country from outside threats. Spending on national defense can vary quite widely from country to country.
Health care is another area where taxes can be spent. The percentage of people covered and the quality of care can make the spending differ drastically.
Foreign aid, scientific research, food inspection, disease prevention, disaster recovery, and management of public lands are also common spending targets.
As tax revenue goes down, spending should also decrease. While collecting taxes is unpopular, elimination or reduction of services is also unpopular. Managing both the rate at which money comes in and goes out is a difficult balance, and rising deficits show that it is difficult to maintain.
How should our taxes be collected and distributed? Do we take in too much, or too little? What about spending? Is there a general philosophy regarding what we should collectively fund?
Related questions: What are our responsibilities to others? What role should government play in our lives? What is the purpose of money? What does the government do that wouldn’t be done otherwise?
To begin, I will focus on federal taxes and spending, except to say that a mixture of federal, state, and local funds is needed to address infrastructure needs like roads and bridges.
Regarding federal taxes, we must ask what our country and its people require to thrive and what changes are necessary in the tax code to achieve that. I’ll argue two points: first, that we allow poverty to trap millions of people while also letting incomes and wealth concentrate, as they often do, enabling the rich to get even richer without providing any real benefit to society as a whole.
To address these issues, I believe we should either expand rights—such as the right to safe and secure housing, quality healthcare, proper nutrition, and a good education—or provide a universal basic income so everyone can afford these essentials as they see fit. (Quality healthcare and a good education, in either case, should be a right, not a commodity to be purchased.) I should note that thinkers and leaders across the political spectrum have supported a universal basic income (e.g., Richard Nixon, Martin Luther King Jr., and Milton Friedman). Second, our tax code’s highest marginal tax rates should be restored to levels seen between 1936 and 1980, and we might also consider taxing certain types of wealth to fund the rights listed above or the universal basic income to achieve these goals.
Ending the poverty trap would give nearly everyone the chance to thrive, benefiting both individuals and the economy overall. It would also ensure children get basic developmental needs met, like proper physical, mental, and intellectual health, instead of facing inadequate brain development, poor health, and often shortened lifespans.
Changing the tax code would not only help fund these rights, it would also address the travesty that those with the highest incomes and wealth are allowed to amass an obscene amount of our nation’s resources and influence our politics in ways that benefit them at the expense of the rest of the population.
Obviously, there are many other aspects of federal taxes and spending that I have not addressed, such as a well-managed Social Security fund. I’ll leave those to other responders.
I will conclude by saying that while the federal government needs to provide for our defense, we are overspending on it. I understand there are many ways to cut costs. Two are that the federal government signs multi-year contracts for the same weapons, which makes our defense system inflexible for future needs. We’re also being overcharged by contractors because of a lack of more frequent competition.
I’d like to see a high priority given to protecting our environment from pollution of our air, water, and earth.