The Big Bad Taxman

Last week, a fire destroyed a private mansion in Washington D.C., along with a priceless collection of African and Afro-American art. Firemen arrived at the site promptly but the hydrants nearby did not work properly.

The beautiful mansion was in flames for hours before finally, five blocks from the house, the fire brigade found a working hydrant. By then, the irreplaceable art collection had been turned into ashes. The mansion’s owner, Peggy Cooper Cafritz, is a wealthy art collector whose collection would later have ended up in different art museums. The Washington Post remarked on the incident: “When artists die, their work becomes more valuable. What happens when art dies? It leaves a hole in the universe.”

The fire sparked a predictable “not again” reaction in D.C. residents. In the past two years, similar problems with fire hydrants have resulted in the destruction of the Georgetown Old Library, the Eastern Market Mall and a large residential building in Adams Morgan.

Peggy Cooper Cafritz’s home was in a wealthy neighborhood of D.C. The houses there have CCTV surveillance, surrounding walls and expensive security systems, but all of that is of little use in combating a fire; for that you need a working water supply network. A market-based approach would be for the rich to repair the system using their own money, but they are not willing to do so.

The devastating fire that destroyed the mansion in D.C. and the bridge that collapsed last August in Minnesota with dire consequences are linked by a common theme: taxation. When there is no tax revenue to spend, highway bridges and water supplies rust and decay due to a lack of repairs. It is common knowledge that the U.S. infrastructure is in a sorry state. The reason is anti-tax absolutism, fueled for decades by both Republicans and Democrats. The spokesperson for the American Taxpayers Alliance, Grover Norquist, claims that whenever the government is collecting taxes, it is stealing from the people. Raising taxes is seen as fundamentally evil in the American political arena.

Being anti-tax is also a powerful political propellant. Usually the winning candidate of any race is the one who is better able to convince voters that he or she will not raise taxes. The most powerful weapon in a candidate’s arsenal is to claim his opponent is secretly in favor of raising taxes and, if elected, will do so immediately. Adrian M. Fenty (D) seems like a prime example. He is now calling for tax increases to get some pressure into the water pipes in Washington. However, in his successful run for mayor two years ago, his campaign platform hinged on him being “the guy who can make things work without raising taxes.”

President Barack Obama also promised in his campaign that 95 percent of Americans would not have to pay higher taxes during his term. The plan is to fund big and expensive reforms by raising taxes only for those Americans earning in excess of US$250,000 a year. This is roughly five percent of the population. The wealthy are of no concern to him, as they don’t vote Democrat in any case.

Obama’s tax policy is, however, only a slight variation on President Bush’s ideas. Bush proclaimed that taxes shouldn’t be raised on anybody, and Obama is 95 percent in agreement. However, Obama wants all citizens to start receiving comprehensive health care coverage and over the next 10 years it could cost more than a trillion dollars. The money must come from somewhere, but will the rich be willing to pick up the check? Unlikely.

The problem with America is its armed forces, which receive a lion’s share of tax revenue. When the U.S. spends more on its military than the rest of the world put together, it is easy to see how there might not be enough money around to fix all the water pipes and bridges.

Secretary of Defense Robert Gates, recognized by both parties for his intelligence and insight, underlined the importance of foreign policy when, some months ago, he demanded more resources be allocated to diplomatic operations. In his highly unusual speech, Secretary Gates highlighted the imbalance between American soldiers and diplomats by pointing out that the health care expenses alone of Pentagon staff are more than the entire budget of the U.S. State Department. Furthermore, the upkeep of military orchestras and marching bands receives as much money as all of the U.S. embassies in the world combined.

The U.S. has often been referred to as the world’s policeman, but perhaps a more apt metaphor is that of a nightclub bouncer. In this scenario, the world is one big bar full of people. When there’s a tall, mean looking doorman standing by the entrance ready to pounce on any troublemaker, everybody feels safer. The comparison also works insofar as I have never seen a bar fight where one of the two parties involved wasn’t the bouncer himself.