Who among us deserves a tax exemption?
That is a question being asked once again as a result of California Gov. Gray Davis' proposal to exempt public school teachers from paying state income taxes.
For those of us who think many teachers are woefully underpaid, Davis' proposal seems like a good idea at first blush. If states and local school districts cannot pay teachers a good wage, why not at least exempt them from paying taxes?
Stephen Moore, director of fiscal policy studies at the Cato Institute, a libertarian think tank, notes that granting a tax exemption to teachers is a declaration by the government that teachers are more deserving than, say, construction workers.
"I doubt if many construction workers would agree," Moore says.
Indeed, our tax policies are often based on a values system not everyone shares.
For example, I know many people who question why parents should get a tax deduction for every child they bring into this world. These folks feel our society would be better off with fewer children. And as the mother of two slothful teenagers, I sometimes see their point.
There also is deduction of interest on home mortgages. This deduction made more sense before a growing number of middle-class Americans began building mini-mansions in the suburbs and second homes at the beach.
But parents and homeowners are not the only beneficiaries of our national tax preferences. Let's not forget about the ethanol producers and the tax-exempt organizations posing as charities that are dumping millions of dollars of soft money into our elections without disclosing the funding source.
Every year, new special interests line up to lobby the House Ways and Means Committee for additional tax exemptions.
This year, it seems the most persuasive case for a tax break is being made by businesses that sell their goods on the Internet. These fledgling dot-coms argue they would be snuffed out if their customers had to pay sales taxes, like the customers of bricks and mortar retail outlets.
I've also heard that the nation's yacht manufacturers, having defeated a proposed luxury tax a number of years ago, have returned to Washington seeking a tax exemption for their industry. This certainly would be consistent with giving tax breaks to those poor people struggling to maintain second homes at the beach.
Of course, none of us likes to pay taxes. But Moore, who advocates abolition of the federal income tax, argues that our political leaders are undermining support for the government by offering too many tax breaks to special interests and, therefore, making the tax code highly unfair for the rest of us.
"This first principle of a fair tax system is a low rate and a wide base," Moore observes. "Instead, we are moving toward a high rate and a narrow base. Picking winners is contrary to the idea of fairness in taxation. It is counterproductive. I think it's very destructive to our democracy."
It might surprise you to learn that at least one major organization representing California teachers _ the California Federation of Teachers _ has rejected Davis' idea of tax breaks for its members, obviously fearing such a step could make the organization less popular than it already is.
You can just imagine how angry a tax-paying California parent might get if a "blankity-blank, tax-dodging public school teacher" flunks his kid in algebra.
"We are willing to pay taxes," CFT President Mary Bergan told the Los Angeles Times last week. "Just pay us a professional salary and we'll pay taxes on it. Even though we appreciate the governor's assertion that teaching is the most important job now, there are a lot of other jobs that are also important, and to single teachers out causes division and dissension within schools."
An admirable sentiment, don't you think? This gives me renewed respect for the wisdom of public school teachers. It's too bad the yacht manufacturers and the ethanol producers are not as civic-minded as the leaders of the California Federation of Teachers.