Monday was arguably the least anticipated day of the year: tax day. It’s understandable. Few particularly enjoy seeing their hard-earned money being siphoned off into the deep, dark abyss of the governmental bureaucracy, but it’s an absolute necessity. From the police to infrastructure to food stamps to public schools and so much more, taxes generally serve as the government’s primary revenue stream.
However, the collection of taxes is poorly enforced. And simply put, they’re too low. But that’s not what most Americans would tell you.
A Gallup Poll released Monday found that around 50 percent of all Americans believe their taxes are too high, approximately 45 percent believe taxes are about right, and a strikingly tiny 2 percent think their taxes are too low.
While the top federal income-tax bracket is 39.6 percent, the average middle-income family of four paid a mere 5.3 percent, according to an analysis by the Urban-Brookings Tax Policy Center.
Considering what turns out to be extremely weak tax revenue, is it any surprise that the IRS estimated that the tax gap for 2006 was $450 billion? Worse yet, this agency is poorly equipped to even carry out the enforcement and collection of taxes.
A report by the Treasury Inspector General for Tax Administration said, “Overall, budget cuts left the IRS with 5,000 fewer employees for the 2012 filing season compared with the previous filing season, even as the number of tax returns it processed continued to rise and the number of identity theft fraud cases the IRS worked soared.”
These anemic revenues aren’t going without consequence. They’re hitting everyone from government agencies to public university students to the IRS itself.
According to a policy brief from the Iowa Fiscal Partnership, inflation-adjusted appropriations to Iowa’s three state universities have fallen by 40 percent between fiscal 2000 and 2011. Over this same period, data from the University of Iowa Registrar’s Office, when adjusted for inflation, show that in-state and out-of-state tuition for students enrolled as undergraduates in the College of Liberal Arts and Sciences and the Carver College of Medicine rose by around 70 percent. Most alarmingly, for in-state students in the College of Nursing and College of Law, tuition has grown by 128 and 155 percent, respectively.
The government can’t receive all the blame for ballooning tuition, but the large role it plays in funding state universities is undeniable. Not only is a lack of funding hurting university students, it’s also impairing the Iowa Department of Transportation’s ability to maintain roads and bridges.
“Flat revenue streams compounded by growing construction costs have reduced our buying power,” Stuart Anderson, director of the planning, programs, and modal division at the Iowa DOT, has previously told The Daily Iowan.
The Governor’s Transportation 2020 Citizen Advisory Commission Report and Recommendations reported that the Iowa DOT faces an annual shortfall of $1.6 billion to take care of Iowa’s road system. The most concrete, substantial recommendations all include increasing fees or taxes in one form or another.
We do not endorse raising taxes to blindly throw money at government initiatives, but we do feel that debt-reduction strategies that rely solely on cutting funds to essential services such as public universities, improving roads, and especially imposing budget cuts on an already struggling IRS are not only short-sighted but unequivocally idiotic.
We, like most Americans don’t like paying taxes, but we recognize that these are absolutely necessary to a functioning government and are something we cannot go without.