Against the Tide of Logic
To many, the unsatisfactory conclusion to the impeachment trial of Donald Trump and the violent attack on the U.S. Capitol he inspired to stop certification of election results, has appropriately focused attention on the former president’s conduct. As reprehensible as that conduct was, let’s not forget that his irresponsible actions and demagogic skills fell on a very receptive audience.
This signals that something is fundamentally wrong with many of the ways our government is working or — more accurately — not working. For one sure thing, in all of our states, governors are being called upon to fund functions that are clearly beyond their states’ financial capabilities. The pandemic is the most glaring example. Clearly, the federal government should have stepped in much earlier with the resources needed to combat a once in a lifetime virus. But the pandemic is far from the only example. The cost of higher education, health care, mass transit and government employee pensions are among others that outstrip the ability of states to do what needs to be done so everyone can thrive.
Once you realize what a big problem this is, you can’t help but focus attention on the U.S. Constitution, which since its adoption in 1787, has frequently been interpreted to largely assign to our state and local governments the responsibilities of dealing with issues of a magnitude that could not be imagined 234 years ago. The result often is counter-productive competition for resources among the 50 states to the detriment of their residents and the entire nation. Ours is a system that disregards the importance of efficiency and cost effectiveness in favor of a misguided emphasis on autonomy that rings hollow in the face of catastrophes like the failure of the entirely in-state power grid in Texas to provide millions of people with power when cold weather froze gas pipelines. At times like that, what is autonomy but the equivalent of shoveling sand against the tide? You can’t win.
It’s time to place greater emphasis on defining a number of problems as national in scope — and requiring national-level financing to solve them. Having states finance their share of national problems largely on the basis of local conditions and resources creates a patchwork of “solutions” that too often fail. If coal prices are down, school children and people needing healthcare in West Virginia and Wyoming suffer. When oil prices tumble, police and firefighters are laid off in Louisiana and Alaska. It’s the same with tourism in Nevada and Florida and financial services in New York and New Jersey.
Having to rely on resources that rise or fall depending on economic conditions within a state’s borders is a highly imperfect way to meet human needs and make the public investments needed for equitable results. Meanwhile, states offer all kinds of tax breaks to lure businesses away from other states in the false hope that poaching will be the answer, though it never is.
Moving to a more broad-based national system of taxation than exists today would free states from their dependency on fluctuating factors and bring a higher degree of uniformity and equity to revenue-raising at the national level — to say nothing about greater amounts of revenue. A carbon-based tax or a European-styled value-added tax are examples of possible options.
The key to improving our government’s responsiveness is our willingness to review what works and what doesn’t. And that’s not just about taxes. Consider voting rights, where the power put into their hands has some states making voting more accessible and others trying mightily to find ways to make it harder to vote.
Whatever the issue, applying old, increasingly ineffective or inequitable policies to new problems can only make matters worse and cause additional problems. It is time to review 1787 assumptions in light of 21st century responsibilities.
I recently had a conversation with a man who bitterly complained that he and his wife both work full time and still can’t make ends meet. “What the hell is going on; what am I supposed to do?” he asked. “Who is to blame”? I suspect he would be receptive to Donald Trump’s “answers” than to a discussion of state and local tax systems. But it’s a discussion we need to have if we’re honest about solving problems.
Our new President’s challenge is to lay out, explore and present the policy options that are available along with his recommendations in order to build a consensus.
This task is not for the faint-hearted. Some upholders of the status quo will fight to the death (usually for money) — think tobacco, coal, assault weapons. But, the end goal — preserving our democracy — is worth the struggle.
James J. Florio of Moorestown is the former governor of New Jersey.
For starters, when the speculative activity of Wall Street under control of the “Too Big To Fail” banks and the Fed and other Central Banks caused the Global Financial Crash, did we go back and fix the root cause of the problem, that being the repeal of the Glass/Steagall Banking Act?? For those unaware, and that does not include former Governor Florio, because i had talked to him about that and gave him material to brush up on his history of the subject, Franklin Roosevelt used that legislation and his “Bank Holiday”, to clean up the mess that Wall Street had made of the economy, culminating in the 1929 Wall Street crash. Roosevelt regulated what sane economic policy banks could engage in ( solid mortgage financing, and physical productive activity like farm loans and small and medium business) while outlawing speculative activity like using depositor monies to finance stock and other forms of speculation). Big ticket items like large infrastructure projects ( think our national electricity grid, or railroads, or water projects, or the space program) would be either underwritten or directed to be accomplished by legislation. That was not done, in fact the opposite occurred, by bailing out those banks and allowing the speculative activity to continue up to the present massive financial bubble we see globally, while millions lost houses, jobs, and our productive economy continues to wither, and the question is, what pin-prick will blow it apart again. Re-authorizing Glass/Steagall in its original, undiluted form and massive federal projects on a grand scale, like building an entire coast to coast high speed rail system, and modernized health system modeled on the Hill- Burton standard of at least 4.5 hospital beds per thousand citizens and with full qualified staffing, can create the jump start needed for a modern physical economy to supply the needed jobs and income for every citizen and family the nation needs.