Tuesday, June 16, 2009

"You Try It" - On Simplifying the Tax Code

Tonight I spoke with my father-in-law, Paul, about taxes. We were talking about Annie's and my questions for an accountant about the caregivers we have for Helen. There are at least three categories. One considers people employees, in which case you have to file all sorts of paperwork. Another treats workers as independent contractors, in which case you often have to file a 1099 form. In a third case, people who help you out can be independent contractors who do not require 1099's. Then there is the matter of whether you paid the person less than 1,500 dollars in a year, because if so, you generally do not have to file anything, etc.

We were lucky to figure out that miraculously we've been doing things right, but by accident. You would think that this is a fairly simple matter. I do not pretend that an individual cannot figure it out on his or her own. At the same time, there are some complicated scenarios in which even sophisticated books and tax software ends an answer with: "Hire a tax accountant."

Paul's suggestion is that Congress ought to pass a law requiring that all congresspersons do their own taxes. That way, they would be forced to deal with the system that you and I use and worry about. If they were to do that, he contends, the code might finally get simplified. He's probably right.

I think the problem is that there are so many incredibly different ways one can earn money. Given that, and given the complicated and varied reasons that inspire laws, I'm not sure how to avoid the way things are. One would think that the kinds of software "wizards" that help you install programs and that guide you through H & R Block or other companies' tax software could be designed for the IRS. Surely this would be a huge operation. Then again, so is any large conversion, such as the change over from analog television to digital. Of course the latter is smaller, but we frequently plan large transitions. If we can buy stamps online, pay custom postage and pay our taxes online, why not figure out what we owe online too?

The main pushback I see to this suggestion is from the companies that have designed tax software. Even they can't solve one of Paul's tax questions, though. The main argument that I can see for private software companies for taxes is that it is in their interest to entice you with a product that truly maximizes your deductions/minimizes your tax requirements. The skeptic would suggest reasonably that the government might not be as dedicated to minimizing your tax burden. Well, at least we might envision an answer system for complicated tax questions that rivals Microsoft's KnowledgeBase Web site, for instance. These are just initial ideas that my conversation with Paul inspired.

Wednesday, June 10, 2009

Priceless Advice and a Book Idea

I am working on a book idea in which I would collect the good advice I have sought, received, and put to work for me in graduate school. One particular goldden nugget has been useful for me today and most every other day that I work on revisions of my work.

When I was thinking about moving forward with a career as a philosopher, John Lachs said to me that "if you are willing to take criticism, you can go very far."

In a Gallup poll from March of 2001, Americans were asked about what they fear. The second most frequently cited terror was public speaking. Why are we so afraid of speaking? My theory is that we are afraid of criticism. Put another way, we don't want to be laughed at or to look stupid.

The thread here is that so often people do not put their ideas out there for fear that either they might be wrong, they might be laughed at, or they might otherwise be criticized. As an academic, it is vital to overcome that fear. How can we propose ideas, test theories, or advocate what is right if we are afraid of being wrong?

It may sound trite, but the shift that people need to make is away from feeling victimized by criticism to being helped. I'll admit that on a gut level, criticism rarely feels good. Some strange people seek it out because they come to enjoy being the outsider, the rebel. At the same time and in a similar way, scholars can learn to enjoy and seek out criticism. The reason is simple. We divorce criticism of our ideas from criticism of ourselves. In trying to solve problems and argue points of view, we propose a way of thinking, submit it for peer review, and then get challenging feedback from scholars who point out the greatest difficulties in our arguments. Although it sounds like an adversarial process (and yes, sometimes people can be jerks), almost always in my experience feedback has included an assessment of the value of the contribution. If I want my work to be better and as strong as it can be, I must want that feedback.

I write this to put one piece of a book idea out there, but also to remind myself of the value and honor it is to get excellent, challenging feedback on my work. It helps me to take a deep breath and think about this advice as I dive into a project once again. If you've got great advice about scholarship or taking or giving criticism, post a comment.

Monday, June 8, 2009

Bonds vs. Taxes - on Reps and Dems

A regular question that comes up whenever the public has to pay for something is this: "HOW are we going to pay for it?" Democrats are often criticized as people who raise taxes, when clearly members of both parties do that. Republicans are known for wanting to cut taxes, but state governments on many occasions have had to shut down because of insufficient funds - an embarrassment and a crisis in some cases. One approach that some like is to issue bonds. There are several reasons it's a good idea to do that.

If I've got things right, a bond is basically a loan that the government takes out in order to pay for something. The bond buyer invests in bonds as a very secure, though low-return, virtually sure thing. If things go perfectly, the government can essentially take out a loan, invest in something helpful for society, and as property values increase, the tax base increases, and without raising anyone's taxes, revenues rise. As such, in time, the government has more money to spend and can therefore pay off those bonds slowly and with a little interest. Sounds fantastic.

Governor Haley Barbour of Mississippi issued $3.5 billion in bonds in 2007 for, among other things, education (Sigo, S. "Mississippi: Gov. OKs $3.5B for Schools," The Bond Buyer, SourceMedia, April 26, 2007, p. 360). There is little doubt that a great deal must be done in Mississippi to improve the system of education and to help pull people out of poverty.

Here is the trouble with issuance of bonds. Like any investment, it has its own risks. In the scenario I described, property values go up, as do incomes, or whatever way it can happen, the income that the government takes in must increase. For, how else can we pay off not only the cost of the principal of the loan without raising taxes, let alone the greater cost of also covering the interest on the bonds? The big problem arises when we take a bad bet. What if property values one day stop going up - as has happened? What if incomes decrease and people lose their jobs - which has happened? What happens then is that the government must pay off the principal of the bonds plus interest at the contracted rate, but with decreasing state revenues. This is the problem with government debt, but not just for bonds. It is also the problem for debt generally.

I am not criticizing Barbour here. We've got to get the money from somewhere. At the same time, some people, such as Barbour, are criticizing the federal government these days for taking out loans and leaving our grandchildren with debt. This may be something to criticize, but clearly in the case of education in Mississippi, this was not criticized in the same way. In the end, either the economy will have to get dramatically better quickly, or we will have to raise taxes.

There is an alternative, of course. We can cut government spending. The trouble is where to do it. If there are obvious places to cut, we can save ourselves lots of money. So many of our expenditures were hard to establish, but were put in place because of a clear need. That may not be true in a few cases, but in so many, it can be incredibly difficult to cut spending. Consider, for instance, the desire to cut pork-barrel spending, a mantra in the election. In my home state of Mississippi, Senator Thad Cochran was right to point out building after building bearing his name that would not exist were it not for the federal government's help. "Pet" projects, as they are called, are negotiating tools to get one person to vote your way because you will fund a much needed expense in his or her district. Now, surely some can be criticized, maybe even many cut or avoided. The point here is only to say that these things are not so simple.

Government should be as efficient as it can be, but the flash of criticisms against government loans or raising taxes are often too simply stated. The claim that lower taxes spark greater business success should imply that New York and California are poor states, given their high taxes, and that Mississippi is thriving and wealthy, given its very low taxes. This simply is not the case. We must invest in ourselves. Even though Barbour's bet on the bonds went sour, it was not his fault, and Mississippi is worth an investment. In the end, Democrats and Republicans are not so different as they make themselves out to be on taxes.

These are initial thoughts on taxes, bonds, and government spending. If you've got comments or suggestions for thinking about these matters, post them. Of particular interest to me are places that have tried out and succeeded with great public/private partnerships to grow their communities. One great example is Auburn, AL, which turned around its economy after a manufacturing plant closed, cutting thousands of jobs at once in a small town. You can find a little info about them and their plan here.

Friday, June 5, 2009

Karl Rove, Collected yet Fallacious

In today's Wall Street Journal, Karl Rove has an opinion piece that is some of the most calm toned criticism of Democrats that has been leveled in the last few weeks. Rove came back to what Republicans are often best at, critiquing Democrats' economic policies.

At the same time, Rove is using his calm tone to mask a cheap and immoral fallacy. I commented recently on a New York Times article that gave Obama a hard time (pretty poorly) for straw man fallacies.

A straw man fallacy occurs when a person argues against someone else's position by making a fake version of the person to beat up. The dumber you make the straw man look, the more obviously right you seem. What's nice about making straw men is the freedom you have in recasting the other person's point of view in as terrible terms as you like. At the same time, it should be clear that straw man fallacies are to be avoided, as they are deceptive and thus immoral, politically speaking. It happens, certainly, that people simply make a mistake in interpreting others. In this case, however, I am confident that Rove knew exactly what he was doing. He was aiming to deceive.

In the article, Rove asks "How was Mr. Obama magically able to conjure this loss of 1.9 million jobs into an increase of 150,000 jobs?" He refers to the fact that month after month in this economic crisis, Americans have been losing jobs. Of course he is right up to that point. Then, the government passed stimulus measures. After that, Obama spoke publicly about the benefits he saw of having passed the stimulus bill. In the use of those funds, certain people have been able to keep their jobs, and others have been hired to do work. So, when Obama says that money is getting spent and that some are benefiting, he touts that as a step at least for those people.

Now, Rove could have asked whether we should be celebrating small success. After all, the numbers that Obama has reported were 150,000 people being employed. In the worst of the recent individual months, over 500,000 Americans have lost their jobs. So, in total, 150,000 may not seem like a great deal.

You might think that Rove is against the stimulus when you hear this sort of criticism. As a matter of fact, he argues that it isn't getting spent fast enough. That seems to challenge the idea of being against stimulus spending. The bigger worry about Rove's tactic, the straw man fallacy, is that he moves next to presume a falsehood. His implication is that Obama thinks that the growth that has come from the stimulus is to be considered net growth overall for the country. That is simply false. Unless Rove can furnish the language in which Obama claims that the net loss of jobs has moved from negative to positive numbers, he is guilty of promulgating a deceptive falsehood.

Look, consider an analogy. If crime is increasing in an area with no police officers, when you hire a few police officers, they will catch some criminals, an increase in criminals caught. At the same time, the slope of crime could continue to increase for independent reasons. Will you blame the hiring of police officers for it? Of course not, unless they are somehow participating in the crime. So, should we not celebrate that police are starting to catch criminals? Maybe more should be done, more should be hired. The point is that the net value of safety will still be in the negative. It is important to make the case for the success of police officers, however, when they are catching criminals. Rove seems to imply that Obama has decided there is no more crime. That is simply disingenuous and should be unacceptable in a major newspaper like the WSJ.

Karl Rove is guilty of a misleading straw man fallacy that he knew better than to commit. He should justify his remarks or withdraw them.

Tuesday, June 2, 2009

On the Slaying of Dr. Tiller

On May 31st of 2009, Dr. Tiller was murdered in his church (see Washington Post article).

Tonight, I heard news commentators call the murder of Dr. Tiller an act of terrorism. For an example, see U.S. News and World Report's Bonnie Erbe's article here. Commentators explain that the murder was an act of violence whose intention was to strike fear in the populace and to effect a change with regard to a political matter through that fear and violence. The attack was part of a pattern of such activities, given that other abortion doctors have been murdered and many healthcare workers have been injured and harassed in the last few years going to and from work and even at their homes.

Others respond to the murder with the belief that Dr. Tiller "Reaped what he sowed," a point of view you can read more about here in a Washington Post article. If one thinks that abortions are murder sanctioned by law, one might say that the one murder prevents the murder of many others.

There is a substantial difference, however, even if one takes this harsh point of view. Surely laws have been unjust in the past, and as Dr. Martin Luther King has said, repeating the idea of other philosophers before him, an unjust law is no law. Consider at least this difference, whatever your beliefs are. While a baby is thought by some to be a person with a soul to be protected, there is a great deal of controversy about this belief. Also, it is not a simple matter of empirical fact. If we could just look with our eyes at a video tape, we can often end controversy over whether a ball is in or out on the tennis court. In the case of when it is we deem a human body to be a person independent and worthy of protection from harm, however, different people look at the same things and do not arrive at consensus. On the other hand, when people look at Dr. Tiller, there was no controversy at all. He was universally understood as a person endowed with the rights of a citizen, whether or not people think he has done wrong. As such, what I am trying to focus on here is a distinction that the philosopher Aristotle made over two thousand years ago. The distinction is between the actual and the possible.

If you buy a tree from me, and I bring you acorns, you can surely get a tree one day. At the same time, you will legitimately have a complaint to raise against me, given that I promised you a tree, and an acorn could in fact not survive the process of becoming a tree, would need to be planted, tended, and so on.

What makes late-term abortions like those that Dr. Tiller performed more controversial for people was the fact that in late term pregnancies, babies are at the point at which they could survive on their own. In such cases, the actual and the possible are far less distinguished. We would be dealing more with a sapling than an acorn. At the same time, when my students write their papers arguing against late term abortions, they invariably talk about the procedures, ignoring the motivations people have for getting abortions in the third term. The rule established in Roe v. Wade explains that third term abortions are not allowed unless the health of the mother is at risk. So, if one seeks a late term abortion, it can only be legal to perform the procedure if the health of the mother is seriously at risk. In such cases, then, we are dealing with two lives. The immediate idea that the baby should be prioritized over the mother is not self-evident. In fact, a child could be devastated to learn that against his or her mother's wishes, Mom was forced to deliver her child into a life without Mom.

Dr. Tiller performed his procedures legally within these bounds. He was a person and a citizen. His murder was motivated without direct harm to the murderer, entailed political consequences as well as consequences for the availability of healthcare options for women, and it struck fear in doctors and healthcare workers everywhere. The claim that the murder was terrorism appears justified. At the same time, some still think that this murder was the right thing to do (again, Washington Post article).

It is hard for me to imagine that Jesus would call people to murder others. Certainly there are non-Christian opponents to abortion. What worries me most at this point is how little repudiation I have seen of the murder, an act that no one can call anything but murder, and that can reasonably be labeled American terrorism. This scares me.

One last matter: on the relation between pro-life activism and the Republican party. There are many Republicans I know who are not pro-life. Also, there are many Republicans who oppose Roe v. Wade mainly because they would rather see individual states decide the matter locally. These positions are quite different from the Sarah Palin point of view - wanting a constitutional ban on abortion. I suspect that the number of people who hold that position is in fact far fewer than people suspect. The news media has said often that America is a center-right nation, whatever that means. At the same time, people like Colin Powell and John McCain do not agree with Palin's view, and are far more moderate. I suspect that the Republican party will either split or will suffer further from identity problems as this social issue continues to separate the moderate from the very conservative base of the party. At the same time, why do we feel so wedded to two parties, aside of course for the desire to have greater numbers and strength? After all, the Democrats are usually extremely divided internally as well.

Dr. Tiller's services angered many people. At the same time, if a couple had to choose between the mother and her child whose birth could kill her, I cannot imagine them making a decision in a manner that would be anything other than serious, painful, yet thoughtful. As Ben Franklin advocated in his list of thirteen virtues, we ought imitate the humility of Jesus and Socrates. On the other hand, the murder of Dr. Tiller points to the dangers of extremism the scope of which is not often this clear. Now more than ever we must talk about these extremes and demand of our leaders, secular, religious, liberals, and conservatives, to denounce this violence and its afront against our democracy.