Alan Chartock: Taxes and taking one for the team
Murray, the world's cutest dog who learned how read, write and speak English at the Literacy Network of South Berkshire, was lounging on the leather couch where he hangs out when his mother isn't home.
I was eating a salad with some chicken on it and gave him a piece. He looked up at me and said, "Thanks, Pops. You know, we haven't chatted for a while, and I've made some notes on the iPhone you gave me."
The bright little dog gave a flip with one of his nails and there they were. He licked his chops, eking out the last bit of the chicken, and said, "I've been meaning to ask you about taxes. Do we pay our fair share?"
"Well, Murray, we pay a much larger proportion of our income than either Mitt Romney or even Barack Obama do. And they have a lot more money than us."
"How is that possible?" asked Murray, looking really perplexed.
"Well, Murray, here's the way it works. In this country, we buy and sell many of our Congresspersons. We do that through campaign gifts. Then these very wealthy people are able to fix the tax laws so they work in their favor.
For the most part, the middle class ends up paying the lion's share and people like Mitt Romney pay far less. They don't pay an appropriate rate on capital gains. They have hundreds of loophole exemptions which allow them to lower their tax rate to half of what a regular middle-class taxpayer would pay.
Now in order to balance the out-of-whack budget, they want to stick it to the middle class by taking away the deduction on mortgage interest.
"You know, Murray, I was speaking with Mark Volpe, the brilliant CEO of the Boston Symphony. He says another deduction that might be lost is the one given to people who make charitable gifts to not-for-profits. They give money to the institutions they really value like The Boston Symphony or WAMC and they're not only supporting what they like, but getting a tax benefit at the same time. Some of these donors give away millions of dollars.
Mark Volpe is worried that if the new tax plan limits the amount you can give away, people will give less.
That could mean a big hit to organizations like WAMC that run pretty much on an even keel. Ditto our churches, synagogues, and colleges. It seems to me that places that get lesser amounts may be in a better position than those who number contributions in the millions. I do know that a lot of people who run these organizations are breaking out in a cold sweat right now."
"But, Pops, what about income tax?," Murray asked. "Isn't the president's whole idea to charge everyone who makes more than $250,000 a year a higher tax on anything they make above the first $250,000? Isn't that the fairest way to do it?"
"Look, Murray, this whole thing will be worked out between the Republicans and the Democrats before we fall off the fiscal cliff. My bet is that anything can happen. Right now, all the polls are showing that the Republicans are being held responsible by voters so they will have to make the best deal they can. If I had to guess about a final agreed-upon figure for those who pay more, it would be anything over $300,000 or $350,000."
Murray looked up at me with tears in his eyes. "Hey, Pop, if we have to pay more in taxes, will I still have something special on top of my dog food every day?"
"Well, sweet Murray," I said to him, "there'll always be a something good for you in your bowl, but Mom and Dad may be eating out a hell of a lot less than they do now. And if I have to pay more, I'll have something to say about another billion-dollar submarine we don't need."
Alan Chartock, a Great Barrington resident, is president and CEO of WAMC Northeast Public Radio and a professor emeritus of communications at SUNY-Albany.
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