How a Bank Robber Is Right on Taxes

It’s been nearly eight years since the 2008 global recession devastated the budgets of state and local governments across the country — and our lawmakers have explored every possible way to raise money except for raising taxes on corporations and our richest citizens.

One way that states have raised revenue without raising taxes on the rich is to have police write enough citations and tickets to make up for budget shortfalls.

In Ferguson Missouri for instance, where Mike Brown was shot to death in the middle of the road two years ago, the Ferguson Police Department’s “target” revenue accounted for 20% of the city’s operating budget.

That’s one out of every five dollars that the city wants to come from tickets for misdemeanors like jaywalking, speeding, or simply being parked on the wrong block at the wrong time of day.

See more news and opinion from Thom Hartmann at Truthout here.

The Justice Department also highlighted the inherent racism in this system, because 85% of the people stopped for traffic stops in Ferguson between 2013 and 2015 were African-Americans, even though only 67% of the residents are black.

Moreover, there’s no doubt that these fines disproportionately fall on the poorest Americans, and when those poor Americans are unable to pay because they simply don’t have the money, the fines often double, and when they still can’t pay, taxpayers end up footing the bill to put the person in jail.

And after all, the privilege of challenging a ticket in court only goes to people with enough money in the bank that they can afford to take time off of work to spend a day in court.

When the Justice Department investigated the Ferguson Missouri Police Department, they found that the need to ticket people to raise money for the city budget “compromised the institutional character of Ferguson’s police department, contributing to a pattern of unconstitutional policing.”.

In other words, using “taxation by citation” to fill in budget gaps creates a perverse incentive for police officers to spend more of their time unconstitutionally harassing citizens to raise revenue than they do actually keeping the public safe.

But it’s not just policing, even the way we pay for our schools is set up to disproportionately hurt America’s poorest families.

According to a report called “The Property Tax-School Funding Dilemma” by the Lincoln Institute, nearly half of all property taxes are used for public elementary and secondary schools.

The fact that we fund our schools using property taxes means that we create a clear difference between the public educations afforded to the nation’s wealthiest kids in Loudoun County Virginia, where the median household income is $118,000, and the public educations afforded to our nation’s poorest kids in Wheeler County Georgia where the median household income is only $16,000.

It creates an unavoidable and untenable situation where inequality leads to more inequality and then compounds over generations, even within a single city like Chicago.

NPR recently reported that the Chicago Ridge School District in Illinois spent just under $10,000 per child, as opposed to the Rondout District 72 in Chicago’s wealthy suburbs where the school can spend nearly $30,000 per child, nearly 3 times more!

Property taxes don’t just lead to unequal outcomes for America’s children though, they also reinforce the vicious cycle of inequality in our communities, especially in cities like right here in the nation’s capital, where neighborhoods are rapidly gentrifying, property taxes are rapidly increasing, and the poorest members of the community are the first to be forced out of their homes and into neighboring Maryland.

If we want to fix the budget deficits in our state and local governments without creating more inequality, and if we want to guarantee that we can provide and expand social security and Medicare for future generations, there’s a simple solution.

It’s time to actually tax the super-rich in this country with a wealth tax that would apply to the multimillionaires among us.

If we simply applied a 1% tax per year on Americans who have, say, over $15 million in net assets , we wouldn’t have to rely on unconstitutional policing to fill in local budget shortfalls, and we could lower or do away with property taxes and actually let people own their homes.

The apocryphal story is that notorious bank robber Willie Sutton once told a reporter that he robbed banks “because that’s where the money is!”

Sutton may never have actually said those words, but its good advice for policy makers who are trying to figure out how to make-up a budget shortfall.

If policymakers need to raise revenues, they should go to where the money is: Tax the multi-millionaires and billionaires on their net assets, end our insane system of corporate subsidies that funnel wealth from the middle class to the top 1%, and close the tax loopholes that let the top 1% hide their fortunes overseas in places like Panama and Switzerland.

The United States should stop saddling our poor with our state and local budget shortfalls, and start requiring the super-rich to pay their fair share.