Why would New York congressional representatives quietly stand by as their colleagues in other states twisted the federal tax system into a weapon to wound New Yorkers?
Did they just forget why taxes exist in the first place?
Here’s a reminder for them: The fundamental role of taxation is to justly apportion among all citizens the costs of fostering the common welfare in building and sustaining a well functioning society.
Over time this principle has been steadily pushed to the background by the unsavory mutual dependency that exists between officeholders and lobbyists.
The tax system has been so regularly manipulated to benefit special interests that we have apparently gone so far afield from taxation’s core purpose that we have reached the point where, with this tax law, it has finally morphed into a tool with which to bludgeon political rivals.
TRUST IS CRUCIAL
There is, to be sure, a natural resistance to tax paying.
Therefore, it would seem prudent to avoid giving the public any further reason to doubt the system’s fairness.
American tax schemes, whether federal or state, are essentially honor systems. The taxpayer is required to comply with mandated procedures and timetables, but is trusted to compute and make his or her own payments subject to potential — but rarely actual — verification.
For most, this responsibility is time consuming and less than easily accomplished due to the Gordian complexity of the tax codes.
The success of the system depends on both the coercive nature of the penalties for failing to file at all, as well as taxpayer confidence that the system, at bottom, is fair to all within some reasonable parameters.
The latter is far more important than the former because if the taxpayer feels others are gaming the system or that the system itself is gaming him, his commitment to the process will erode, both morally and materially.
The willingness to take short cuts increases as confidence in the system decreases.
With an Internal Revenue Service increasingly ill equipped to effectively enforce the law by dint of repeated Republican congressional browbeating and budget cuts, most filings go unexamined — and the taxpayers know it.
The economic effect of all this cascades to state tax systems like New York’s, which depend as a threshold matter on the income calculations made on the federal form.
In this regard, the Orwellian-titled “Tax Cuts and Jobs Act of 2017” fails to pass any smell test whatsoever.
In every way imaginable, the tax bill passed exclusively by the Republicans in Congress strikes at the core of that requisite trust.
Let us count the ways.
There were no substantive hearings or expert testimony heard for a matter of such far-reaching import and effect.
The details of the bill were not only negotiated in secret, but also approved without any public scrutiny whatsoever.
Nearly every claim made by its proponents to shore up the supposition that this was in the main a “middle class tax relief” bill were found to be short term or wholly mendacious and reported as such.
Promises that those at the top of the income scale would receive little or no relief; that the system would be simplified; that while corporate rates would be slashed, their exemptions and loopholes would be closed; and that the bill would not result in a massive increase in the national budget deficit and public debt — all of which were proven false even before the bill’s passage.
TARGET: NEW YORK
Finally, the new law subjects New Yorkers to being taxed on the same income twice, abusing the federal system to mount a political attack that puts us in an untenable position unique in the history of American taxation.
Their ersatz reasoning — that doing so addresses an injustice by removing a subsidy to New Yorkers underwritten by federal taxpayers elsewhere — vanishes into the ether when one realizes that New Yorkers repeatedly have paid far more into the federal treasury than they’ve received back.
On the contrary, New York has subsidized most other states for decades and will do so even more under this law.
Incredibly, New York’s Republican congressional representatives supported this unprovoked attack — some overtly with their votes, others tacitly by employing a thoroughly weak, thin and reticent posture of “resistance” while cynically voting “no” with the full permission of their leadership.
Where were they when we needed them most?
Missing in action.
John Figliozzi is a regular contributor to the Sunday Opinion section.