Dad taught me my first math lesson in the front seat of the car, counting ashtray pennies laid out on the transmission hump.
“How many pennies is that, son?” He asked.
“I don’t know.”
“That’s six pennies.” He laid another one down. “Now how many is that?”
“Six?”
Decades later, I understand the patience Dad must have had. No, I don’t have toddlers, just a Twitter account that acts as a window into the unhinged rants of people who think that Trump’s tax cuts are a tax increase.
“I can’t use my deductions!”
“My refund is smaller!”
“The middle class are paying for the 1 percent!”
“Paul Ryan is a jerk!” (Well, that one is mostly true.)
In rebuttal, the math isn’t much harder than the math Dad used with those floorboard pennies. If the now-doubled standard deduction exceeds what you previously itemized, you take the standard. If withholding was adjusted based on lower tax rates, you get less back for not paying as much. In both cases, you likely paid less in total federal income tax. If you’re one of the few that paid more, you’re likely stretching it to call yourself “middle class.”
But I’m not your CPA or your Dad, so let them explain the math.
The real problem is that none of these Twitter toddlers, or most anybody, can tell you their federal tax bill. The gimmicks a plaid-jacketed Buick salesman might use to put you in more of a car than you can afford are what the government has done since World War II. Income tax withholding is Uncle Sam’s version of “What payment do you need?” Taking a little at a time not only hides the total amount, it also blinds the payer to endless tricks that make him feel like he’s saved money by spending more.
How mad can I be at average people for not getting the math of their tax bill when that is precisely how it was designed?
Worse still, the mainstream of both parties endorses this social engineering. Yellow vest protests would look like a picnic on a Parisian square if Americans had to write out a check for 20 or 30 grand come April 15. Sadly, many self-described populists have decided to join ’em without ever really trying to beat ’em. When Alexandria Ocasio-Cortez (D-N.Y.) floated the idea of 70 percent marginal rates, the response from some quarters was, “Let her have it. Why should I fight for Jeff Bezos and other rich leftists?”
Math is one answer, but just one. Even in a zero-sum, static analysis, you can’t put a dent in our deficit or debt with a 70 percent marginal rate. So what matters is that it’s nothing more than a cynical ploy to make the “middle class” feel like they came out ahead because that other guy had it stuck to him. As long as the establishment can keep you feeling like someone else drew the short stick, the more likely you keep playing along in this rigged, immoral, and unsustainable game.
A number of reforms, from the flat tax to the FairTax, could end this system more suited to keeping you compliant than collecting necessary revenue. It would be a disservice to each proposal to debate its individual merits here. Having nowhere to go but up, the reforms of the Tax Cuts and Jobs Act provided a framework of a fairer, flatter system. Yet we still end up arguing with people who think tax refunds are found money because we’ve stipulated the premise of a tax code that rewards and punishes.
Why should we be surprised half of us can no longer tell the carrot from the stick when our ruling class uses each so gratuitously?
Andrew Breitbart famously believed politics to be downstream from culture. I think the same for math. There can be no great tax revolution, much less a societal one of Western values of individual liberty and consent of the governed, so long as we accept and reinforce the premise that collected taxes are “the government’s money,” tax refunds are a benevolent reward, and that we get “deductions” because we did the right thing while our neighbor got “loopholes” because he is a cheat.
My Dad finally sorted me out on those pennies, but more importantly, he set me straight on a lot of other things I needed to know. In that is a lesson: we can’t teach tax math without tackling tax culture.
Any good salesman knows it’s a waste of time to argue features and benefits against someone’s ingrained perception. Instead, address pain. Sure, showing someone they kept an extra $2,000 all year instead of getting $1,100 as a refund is mathematically sound, but it’s a few dollars of monthly payment. Show them that they paid $20,000 last year and $18,000 this year, now you have someone who understands the tax system is as much of a rip-off as rust sealer and extended warranties. Screw the payment—that’s a lot of money. Their money.
As long as they feel they’re getting a raw deal on taxes, maybe we should use that.