Congress needs to be reasonable

One has to wonder where our nation is headed when elected leaders ignore practical facts and favor rigid ideological doctrine.

I'm speaking, of course, of the conservative fringe of the Republican party in Congress which refuses to consider raising taxes on the nation's wealthiest persons and thereby has hamstrung efforts to address the end of the Bush Tax Cuts, automatic federal budget cuts and other aspects of the so-called fiscal cliff scheduled to arrive in January.

It's amazing that a couple dozen members of the majority party in the US House can derail the nation, but considering that it only takes one US senator to put a "hold" on a piece of business, it shouldn't be too surprising. Nevertheless, it's not the best way to conduct business.

What would be the effects of an increase in taxes on the nation's highest earners? In the September/October, 2012, edition of the journal Foreign Affairs, Andrea Louise Campbell, a professor of political science at Massachusetts Institute of Technology, wrote, "Raising taxes moderately--perhaps by a few percentage points of the GDP--would certainly provide the government with much-needed revenue. And it might not have a detrimental impact on the US economy, perhaps even spurring it."

She went on to explain that, " . . . past experience suggests that a tax hike today would not severely damage the economy, and productivity might even rise with the security and investments that government spending can provide."

Campbell's article contained many insights on taxation and income distribution, including these:

--The share of total income going to the top 1 percent of earners--$400,000 or more annually--increased from 9 percent in 1970 to 23.5 percent in 2007.

--In 2007, the top 1 percent in the country earned just over 20 percent of all income but held more than 30 percent of all wealth.

--The corporate tax has plunged as a source of federal revenue from 30 percent in the 1950s to 10 percent today.

--Payroll taxes for Medicare and Social Security have grown from 23 percent of federal revenue in 1970 to 40 percent in 2010. These flat rate taxes impact lower income earners more than higher income earners.

--The instruction book for the 2012 1040 tax form and accompanying schedules is 188 pages long; the EZ form is 43 pages. The IRS estimated in 2003 that individual taxpayers spent $18.8 billion on compliance, mainly through payments to tax preparers, and large corporations spend over $40 billion annually.

Another Foreign Affairs article in the November/December, 2011, edition by George Packer, a staff writer for The New Yorker, highlights the impact of these shifts on society.

"Between 1979 and 2006," Packard wrote, "middle class Americans saw their annual income after taxes increase by 21 percent (adjusted for inflation). The poorest Americans saw their incomes rise by only 11 percent. The top 1 percent, meanwhile, saw their incomes increase by 256 percent."

These are signs of inequality in our economy and tax system. Taking us over the fiscal cliff by allowing taxes to rise next year will just continue to exacerbate that inequality. There are good reasons to take a different path, and there are some good reasons to overhaul the tax code.

Now all we need is some good reasoning on the part of the Congress.