Excerpt from Taxes ARE A Women's Issue: Reframing the Debate
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What Would Real Tax Reform Look Like?
The tax system did not become unfair, inadequate, inequitable, or complex overnight, under one presidential administration or because of one political party. And reforming the system won’t be easy or simple, either. There’s no quick fix or single answer. But five principles—based on new questions and straight answers—can help women reframe the debate about taxes, tax policy, and the national budget:
1. Fairness. Who will benefit the most and who the least from various changes to tax policies? What is the impact on the after-tax income of various women and their families? Is the system based on ability to pay? Will the changes mean that it will be very difficult for lower-income families to afford their basic needs after paying taxes? Will those who have the most disposable income and who benefit the most from our current economic and social arrangements pay their fair share?
2. Equity. Do taxpayers with similar incomes and similar needs pay similar levels of taxes and receive similar benefits from the system? Does the system contain gender or racial biases? Does a particular policy harm women and other workers whose wages are taxed heavily through income and payroll taxes, while at the same time offering large breaks to those who earn substantial income through investments? Are needs served by the nation’s social welfare system treated equitably, as compared to with the benefits enjoyed by those who can take advantage of the tax breaks available through the fiscal welfare system?
3. Adequacy. Does overall tax policy provide the revenues necessary for a reasonable level of the public services so important to all, and especially to women and their families? Does it ensure adequate funds for the services the government should provide, including a safety net that protects the old, the young, those who are ill or disabled, the poor, and anyone else who falls on hard times?
4. Responsibility. Do policies at the federal level simply shift the cost of public services to overburdened state and local systems, systems that generally secure funding through are more regressive taxes? Do they shift more of the burden of care to women? Do tax policies shift the cost of current expenditures to future generations by borrowing excessively? Are the terms of this “mortgage” transparent, or are they hidden in today’s budget so that they will balloon in years to come?
5. National goals. Does a particular tax policy enhance the quality of life for all women – in fact, for all Americans – regardless of their race, age, ethnicity, sexual orientation, marital status, or class? Does it widen the already large gap between the wealthy and middle - and lower - income earners? Does it allow all women and their families to have a basic level of economic security? Does it support and maintain a vigorous middle class? Will it mean that corporations pay their fair share of taxes while at the same time encouraging them to stay in local communities? Does it encourage investment in our nation’s future, including a healthy and educated new generation of Americans? Will it ensure that the U .S . can remain competitive in the global marketplace? Does it provide for our national security, in all the meanings of that term?
What Policy Changes Would Promote Real Tax Reform? What are some key policy changes women can support?
As everyone knows, the federal tax code is a maze of rules and regulations -- 54,846 pages worth, to be exact. But tax simplification is not a substitute for tax fairness or for ensuring that the government has sufficient revenues to meet the basic needs of the country. Nor does each person need to plow through all 54,846 pages or understand each tax provision in order to become effective advocates for fair tax policy.
What we do need is a robust debate about how to structure federal, state, and local tax systems. In a fair system, women would not lose out, racial disparities would be corrected, taxes would be based on ability to pay, low - and moderate - income taxpayers would have enough after–tax income to care for their families, and we all would share the responsibility for creating a safe, just, and economically sound nation.
What are some of the changes that would help us achieve that tax system —and how can we help bring about those changes? Here are First, there are some actions we can take in the short term:
* Collect and make available gender and racially disaggregated data, so that we can better evaluate how tax policies affect different groups in our society.
* Reject efforts to make permanent the 2001 and 2003 tax cuts on capital gains, dividends, and high incomes. In fact, support their roll - back to help provide sufficient tax revenue for current needs, reduce the deficit, and promote effective progressive taxation.
* Maintain the estate tax for those who are the most wealthy among us. This will increase revenue and discourage the untenable concentration of wealth at the very top of the income scale that has been growing in recent decades.
* Protect tax breaks like the Earned Income Tax Credit and the Child Tax Credit that help those who most need the added after-tax income. Extend the benefits of such breaks to those whose income are so low that they don’t currently qualify.
*Reform the Alternative Minimum Tax and ensure that it applies only to those very the high-income earners whom it was designed to affect. This will make the tax system more progressive.
* Oppose efforts to privatize or reduce Social Security, a policy change that would seriously undermine the nation’s ability to ensure a minimal level of economic security for the nation’s older Americans, as well as for those who are disabled and the families of deceased workers.
* Challenge current and future budget proposals that cut funding for education, health care, human services, public safety, and other critical tax-supported programs. Sustaining these programs is essential if we want to support women’s care work in the home and ensure a fair, adequate, productive, and globally competitive society
* Ensure that businesses pay their fair share of taxes and structure them to create positive incentives for businesses to treat employees fairly—that is, to provide health and other vital employer-provided benefits—and to contribute to environmental sustainability and worker safety. Repeal tax code provisions that reward them for outsourcing jobs, despoiling the environment, undermining the health and welfare of communities, and sheltering money on which they should pay their fair share of taxes.
Other reforms that may require a longer term approach:
* Promote a more progressive overall tax system—at the federal, but also the state and local levels—that asks people to give in relationship to their ability to pay.
* Protect the social welfare system so that the basic human needs of all Americans, as well as broad national goals, are met. Americans have been well served by a dual welfare system that provides social welfare for families in the greatest need and other support for individuals and families across the economic spectrum. All families deserve this kind of help, but especially those who most need it.
* Prioritize reforms that sustain, rather than eliminate or privatize, programs that help individuals and families whatever their economic status, such as Social Security, Medicare, and Unemployment Insurance. Ensure that reforms focused on the fiscal viability of these programs adhere to the principle of progressivity in generating program revenues. Avoid privatization , which often means the end of access to services and programs for the most disadvantaged, and greater insecurity for the rest of us.
* Ensure greater transparency of the tax code to make it easy to negotiate and clear in terms of who benefits and who loses from changes to the system. But do not trade tax simplification for tax fairness. We can have both!
* Promote tax and economic literacy for all. That is, enhance public understanding of government functions, and the relationship between tax collections, government spending, and the quality of life. Encourage broader public dialogue and participation -- – especially of women -- – in setting fiscal and social policies.
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