Panel Discussion, NCRW Annual Conference, June 2004

Speakers:

• Julianne Malveaux, Economist, Author, Commentator
• Nancy Folbre, Professor of Economics, University of Massachusetts; Former President, International Association for Feminist Economics
• Heidi Hartmann, Director and President, Institute for Women's Policy Research
• Joan Entmacher, Vice President and Director of Family Economic Security, National Women's Law Center

Moderator:

• Bonnie Thornton Dill, Executive Director, Consortium on Race, Gender, and Ethnicity, University of Maryland College Park

Overview

In recent decades, the U.S. tax structure has increasingly favored wealthy individuals and corporations while shifting the burden to middle and lower income individuals - disproportionately women. With funding cuts in the service and cash assistance programs that women from all societal sectors rely on, the importance of strategizing about economic policy and information spreading cannot be undervalued. This plenary addressed how taxes and tax policy affect, and often disadvantage, women. Expert panelists presented informative research and participated in a lively dialogue about ways to frame public debate around the necessity of a fair, equitable tax system that improves the lives of all.

Summary

Bonnie Thornton Dill opened discussion by contradicting one of the many myths about tax cuts: that they are popular among and beneficial to all sectors of the public. Thornton Dill cited a recent Money magazine poll that found that 60 percent of Americans claimed they did not benefit from the 2003 tax cut, three-quarters would have preferred job creation, and 49 percent would have favored deficit reduction.

She described the genesis of this plenary in the National Council for Research on Women's Chamberlain Initiative, which aims to use the resources of Council member centers to affect public policy, public thinking, and education. One of the first projects of this Initiative focuses on taxes as a women's issue, and on tax fairness, economic justice, and racial and gender equality.

Julianne Malveaux focused largely on the framing of the taxes issue. The post-Reagan era Republicans, Malveaux noted, have successfully centered the discussion on taxation around the monetary cost of taxes to each individual rather than benefits people receive from paying them. She cited numerous examples of the benefits the public receives from taxation, including police coverage, fire safety, national parks, highways, and the military (the latter Malveaux noted "could be a public good or a public bad"), and recalled Oliver Wendell Holmes' claim that taxation is the price we pay for living in a civilized society. She expressed the need for the Left to reframe the way taxes are discussed, pointing out that when women hear "you should want to keep your money" often enough they begin to believe it. "The claim that [Republicans] have over the language really, frankly, has moved women away from progressive thinking around issues like taxation," she said.

In addition to framing, Malveaux discussed the inequities in the tax system, particularly across race, class, and regional lines. She used the educational funding system as an example which, since it is taken out of local property taxes, results in inadequate funding for schools in disadvantaged neighborhoods. Moreover, the home ownership deduction discriminates against minorities, because 74 percent of whites own their homes compared to 47 percent of African-Americans and Latinos.

Malveaux concluded by stressing the important role of taxes in redistribution: correcting the inequities that naturally result from a capitalist society. With 10 million Americans living on a minimum wage salary of $10,700 per year, redistribution programs like federal funding for food stamps and Head Start need to be augmented. Under the current administration, the federal government has passed along unfunded mandates to states, which do not have the ability to carry deficits.

Nancy Folbre discussed the intricacies of the tax system in relation to women and care - the "non-market" economy, which is often left out of the conversation on taxes. Folbre expressed deep concern over the dearth of adequate public support for the care of children and other dependents. The issue of care, said Folbre, has driven a "political wedge" between women caregivers and women wage earners. Women wage earners often view care work performed by stay-at-home mothers as already "subsidized," as it is non-market work and therefore non-taxable. However, Folbre pointed out, parents actually transfer resources to non-parents by producing future workers who will generate money for social security to support the elderly generation. She also noted that the idea of care work being "subsidized" as non-taxable work assumes that a caregiver has a partner who is earning income and benefits. Therefore, Folbre stressed, subsidies are needed since many women have worked less and have lower income as a result of having children.

Like Malveaux, Folbre emphasized the importance of viewing taxation as a system of redistribution, not only over various sectors of the population but also over the course of an individual's lifetime. She spoke of "life cycle transfers" such as education and support of the elderly. Folbre also frowned upon the concept of "tax freedom day" (the day of the year by which the average person has earned enough income to pay the taxes that they owe for a year) and instead encouraged thinking about "tax payback age" - the age that an average working adult has paid enough taxes to pay back what was already spent on them.

Folbre closed by encouraging all women to master the language of taxation, and encouraging the creation of programs that promote tax fluency. She also emphasized the importance of spreading information about how progressive taxation aids children and other dependents, and the need for further discussion to determine "a simpler, more unified and more equitable way of supporting parents."

Heidi Hartmann walked the audience through specific budget and tax scenarios, predicting future consequences for the economy and women in particular. The Bush administration, Hartmann noted, has incurred great budget deficits caused by large tax cuts that primarily have benefited the wealthy, disadvantaging the lower income brackets through cuts in public programs. She went on to discuss the various components of government spending: mandatory spending, which currently accounts for 55 percent of total spending and includes program spending (such as social security and Medicaid) as well as interest payments on loans; and discretionary spending, divided into discretionary defense spending (19 percent of the total budget) and discretionary non-defense spending (20 percent). Accounting for increased net interest on the debt and extended tax cuts, Hartmann projected the budget ten years into the future. In 2014, because of exploding annual deficits due to tax cuts, the United States will have the highest rate of federal borrowing since World War II. "For those of you old enough to remember World War II," said Hartmann, "people had things like victory gardens, rationing tickets. And taxes were actually increased."

Supposing that this administration tried to maintain balanced budgets while keeping tax cuts, Hartmann conjectured that all discretionary spending would disappear by 2012. This includes Head Start, housing vouchers and the WIC program, a supplemental food program for low-income pregnant women and children. Adding to Folbre and Malveaux's analysis of Bush's tax cuts, Hartmann emphasized how the cuts primarily benefit the wealthiest 1 percent of tax payers, whose tax rate will fall by 12 percent, compared with 7 percent for middle income and a meager 3 percent for the poorest fifth of tax payers.

Hartmann continued by briefly discussing Social Security, and how the Right tries to portray increasing costs for this program as a fight between the elderly and children. She offered an alternative theory of why the cost of Social Security is emphasized so much: women are the primary recipients of these programs, with 20 percent of elderly women being poor. Hartmann concluded by warning people that the combination of high debt service and tax cuts poses a major challenge to future economic growth.

Joan Entmacher began by noting the strategy of the Right with regard to taxes: eliminate progressivity, privatize, and force cuts in popular programs by cutting revenue. Entmacher reported that federal revenue was at its lowest since 1950, before Medicare, Medicaid, the Department of Housing, and an interstate highway system existed and needed to be funded. The cuts in funding for these programs needed to trim the deficits, however, are less than the cost of tax cuts for the top 1 percent of taxpayers over the next five years. She elaborated on the effects of tax cuts across income levels, and pointed out that the lowest fifth, where 41 percent of families are female headed, receive less than .5 percent of the tax benefits. The top fifth that benefits the most from tax cuts are only 4 percent female headed. While taxes on earnings have fallen 9 percent, taxes on investments have fallen by 22 percent, strongly favoring the upper classes.

Entmacher then suggested some resources and ways that people could fight tax injustices, including an organization called Fair Taxes for All and the National Women's Law Center. She expressed the importance of changing the Left's strategy from defensive to offensive. Most editorial coverage around the world is anti-tax cut and could be mobilized to the Left's advantage. American sentiment is also in the Left's favor, as polling data shows that Americans would prefer spending money on Social Security, health care, and debt reduction to tax cuts. While 50 percent of Americans do say they feel are paying too much money in taxes, framing the question in a different way - What is it that bothers you about taxes? - yields that only 14 percent of Americans say it is the amount they pay in taxes that bothers them, while 50 percent say that it is that the wealthy and corporations are paying too little. Entmacher closed by urging people to get involved with activist activities around tax issues and literacy. The public, she said, "is receptive to an effort in this regard."

During the Question and Answer portion of the panel, several other issues were raised and elaborated on: the consequences of the privatization of Social Security, immigration as a justification for tax cuts (programs are not benefiting "real" Americans); why the Republicans' message is more effective; and whether a change in administration would make a difference.

On Social Security, Hartmann noted that if the United States does not change anything, we can pay 100 percent of Social Security benefits by 2042, when we will have absorbed the cost of the Baby Boomers' retirement.

Folbre spoke to the immigration question by pointing out that "bringing in able-bodied, working-age immigrant adults, if anything, reduces the need to grow our own."

In response to the question about the Right's organization, Malveaux noted that everyone on the Left has a specific "hot-button" issue they are working on, while the Right is unified in its goal of shrinking government. Entmacher added that the Right maximizes communication between sectors while the Left emphasizes research.

On the change of administration issue, Malveaux noted that while we must work with Kerry who may not represent all constituencies (specifically the African-American community), we also have opportunities to make changes through Congressional campaigns.