Editor’s Page: Taxing Times

Everyone believes a civilization worth having is worth paying for. But no one likes to be taken for a ride, either.

Photo: Linny Morris


We do pay federal taxes here in the Islands, even if Mainlanders sometimes forget we’re a state. In honor of tax day, let me remind you of the tax cheats recently put forward for Cabinet positions by the Obama administration. Two of these appointments were undone by the appointees’ tax delinquency—one, remarkably, stuck.

Tom Daschle, nominated for Secretary of Health and Human Services, withdrew when it was revealed that he took the expression “limousine liberal” a bit too literally by not paying taxes on a $100,000 limousine service provided to him free. For a year.

Nancy Killefer, nominated as President Obama’s “performance czar,” whatever that is, ended up withdrawing when it was made public that she didn’t pay taxes on her domestic help.

Timothy Geithner was successfully appointed Treasury secretary—inexplicably, astonishingly, against all common sense—despite his known tax evasion. He’s in charge of the government’s money, all of which is skimmed from private efforts through taxation. He’s in charge of the IRS itself! Perhaps he’ll have himself audited.

Rubbing salt into the wound, Killefer and Daschle both withdrew by stating only that their tax issues were “distractions” that would be used to undermine their work in the administration. You know, the way compulsive shoplifting on weekends would be a “distraction” from the good work a thief might otherwise perform at his or her day job. They didn’t say they were wrong, they didn’t say they were sorry, they didn’t say they had skirted the law. They said, “I’m too much of a distraction.”

These people don’t think they have to pay their taxes. But they think you ought to.

We do pay Hawai‘i state taxes, so let me remind of you of the latest misuse of our tax dollars here in the Islands. In February, state auditor Marion Higa revealed that Department of Education construction contracts had been awarded through falsified documents and favoritism. The people who handled public school repairs and maintenance on our behalf operated with what Higa called “a culture of disregard” for procurement rules. Higa found alleged ethical and criminal violations, and wasteful spending.

We also are taxed by the city through property taxes and user fees, so let me remind you of Mayor Mufi Hannemann’s idea for covering the city’s projected $50 million budget shortfall.

Raising property taxes and user fees.

Is anyone really surprised? This is what government does. Congress established federal taxes on personal income as we know them in 1913, nearly a century ago. The lowest rate then was 1 percent on incomes up to $20,000, up to a max of 7 percent for incomes above $500,000. [Added online: For a complete history of U.S. tax rates, click here.]

In today’s dollars, $20,000 has the buying power of  $441,212. Should you actually earn that much in 2009, you’d be taxed at 35 percent. The lowest federal rate is now 10 percent, 10 times higher than a century ago, on incomes up to $16,700.

Reasonable people understand that taxes are the membership dues of society, paying for the things we all use in common. But as the government appetite for taxes steadily grows—and through it, control over all our taxed activities—the people start to wonder if it’s citizenship they’re enjoying or servitude.

It’s no wonder that antitax tea parties have been popping up across the nation. They began during the debate over the stimulus package, born out of taxpayer frustration that government bailouts were penalizing the responsible to rescue the irresponsible. They occurred in Chicago, Denver, and as many as 40 other cities through February and March, with tens of thousands of people protesting, according to the Web site www.taxdayteaparty.com. There was even a small one on Maui. Organizers of these grassroots efforts hope to see a nationwide tax protest on April 15.

I wouldn’t be surprised if they pull it off.

UPDATE, April 2: The Tea Party movement is growing rapidly, see this Google maps page for a sense of its national scale.