Peter is an executive at an engineering company. Mary is a high school teacher. Peter’s father, Bill, an energetic seventy-year-old, works part-time as a cashier. Bill’s sixty-two-year-old sister, Isabelle, is confined to a wheelchair and no longer works. The children attend public school.

The cost of running their seven-person household is considerable. Although the mortgage is paid off, insurance and local property taxes are very high.

The Sensibles keep the house in good working order. The old furnace was replaced recently, and the roof will be re-shingled this summer.

Although the family eats together at home most nights, the food bill keeps going up (and two of the children are teenagers with big appetites).

The Sensibles’ budget calls for $140,000 a year to maintain the house, cover regular expenses, and save for household emergencies.

Peter’s take-home pay is about $200,000 a year. Mary, who has spent her entire career teaching, brings home about $35,000. Grandpa Bill’s part-time job at minimum wage has a net pay of $4,000. Great Aunt Isabelle receives a monthly Social Security disability payment.

How would you allocate the responsibility for contributing to household expenses? Clearly there are numerous options.

Let’s consider three very different scenarios.

Scenario A. Should the $140,000 be spread equally across the four adults, meaning that each would be asked to contribute $35,000 a year? Peter could easily cover his share. His wife could barely manage it. It clearly wouldn’t work for minimum-wage Grandpa or his sister.

Scenario B. How about a percentage based on take-home pay? What if Peter contributed 30% of his pay, Mary 20% of hers, and Grandpa 3% of his? Those percentages initially sound reasonable. But look at the actual results. Peter would be responsible for $60,000, Mary $7,000, and Grandpa $120. That would total only $67,120 –-not enough to maintain the house properly, but they could get through the next few years by postponing maintenance, reducing insurance coverage, cutting back on food and utilities, using their credit cards, and not planning for emergencies.

Scenario C. Most families without hesitation would pool their resources based on ability to pay. As the primary income earners, Peter and Mary would both contribute heavily to household expenses, but Peter far more than Mary because the household can’t maintain itself properly without the much bigger contribution that his salary allows. Even after setting money aside for their children’s college years and their own retirement, they would still have money left over for personal investments, vacations, and charitable donations.

***

When it comes to budgeting for our country, we face choices similar to these, and political parties have very different answers.

Democrats believe that all Americans –- regardless of earning power –- are entitled to food, shelter, health care, and education, and that public funds are needed to maintain public infrastructure and public services, including schools, transportation, scientific research, water, safety, etc.

Our philosophy is that those who have much more money than they need must contribute substantially more in taxes, because otherwise there are simply not enough funds to bring about the kind of society we all want to live in.

Just as Peter Sensible benefits from a house that’s in good repair, so –- with a more sensible tax policy -–this country’s richest would benefit from improved infrastructure, proper maintenance of public assets, better public health and safety, a better educated workforce, and a reduction in crime that is possible with better opportunities for all.

Over the past generation, the richest Americans’ contribution to public services has been greatly reduced as a result of huge tax cuts for those with very high incomes.

The constant complaining about taxes has been a smokescreen, allowing income to shift from the middle class to the rich and causing sensible public investment to be neglected.

The “safety net” is in shreds, infrastructure is crumbling, and the economic well-being of most Americans is diminished.

The next time you hear Republicans talk about “no new taxes” or a “simplified tax structure,” consider the implications for our whole society.

It’s like the story about a bride making her way down the aisle.

The impending disaster starts when she unconsciously steps on the front hem of her gown.  With her next stride, she feels a tug. With all the eyes focused on her, she decides to proceed as though nothing’s amiss, and hope for the best.

Every time she takes a step, she treads on more material and has to crouch lower and lower in order to continue.

At a certain point she cannot walk any farther.

Then it’s time –past time — to address the problem. After she stops and pulls the skirt out from under, she can proceed.

When society’s situation becomes intolerable, We the People must correct it.

The situation I’m referring to today is funding for basic public services.

When the state income tax was lowered by the Legislature after the Republican-sponsored referendum, those earning the most got the biggest break in terms of dollars. Those earning the least got the smallest break.

That’s because our state income tax is based on a percentage of our earnings. The more you earn, the more dollars you pay in tax. The less you earn, the fewer dollars you pay. 

You may remember that some Democrats warned that cutting the income tax would inevitably bring cuts in services. Republicans led voters to believe that we could reduce the income tax without cuts in service.

And what situation do we find ourselves in now?

Teachers are being laid off, forcing larger class sizes. Not good for the kids, because they learn best in smaller groups. But also counterproductive for our state’s long-term fiscal health — businesses need well-educated employees and good schools for children. 

College students are graduating with huge debts.  The cost of attending college has escalated. Burdened with debt, graduates are bound to need the most lucrative work. It is increasingly difficult to fill high-skilled jobs that serve the public.

Effective crime-prevention programs, such as drug-treatment, have been cut. Community policing is harder to implement when police budgets are curtailed.

In many neighborhoods it takes longer for firefighters to arrive because of reduced staffing. 

Roads are crumbling all over the state. We can’t keep up even with potholes. Most bridge and dam maintenance is continually postponed.

Is this the kind of “commonwealth” We the People want?  Most European countries put us to shame as far as infrastructure is concerned.

Responsible analysts don’t believe that our current fiscal problems are due primarily to waste. It’s true there is room for greater efficiency in administering public services. But when budgets are cut to the bone and fewer personnel are overwhelmed with emergencies daily, it is extremely difficult to manage efficiently. Penny-wise and pound-foolish decisions abound.

Without an appropriate level of income taxation, property taxes must either increase further or public services must be cut further. Which do you prefer?

Currently there is no public discussion of raising income taxes even by a tenth of one percent, because it’s considered to be too unpopular.

The problem with relying so heavily on property taxes is that they’re not necessarily fair. When you buy a house, you figure out whether you can pay the mortgage and the property taxes; you should even assume some rise in tax. But if your income dips, or your neighborhood’s property values increase substantially, you’re stuck.

If we could raise the income tax rate a bit, there would be less pressure on property taxes to fund such a large slice of public services.  Those who earn little would hardly be affected by an increase in income tax rates, though they are hit very hard by fees. Those in the middle would feel a slight pinch at the beginning, followed by an improvement in quality of life, reduction in fees, and a gradual lessening of property taxes. Those who earn a lot would be investing in improvements that benefit all, including their own families, and have plenty left over for both necessities and luxuries.

State aid to municipalities could increase, especially for education and public safety.

State infrastructure maintenance and improvement could resume.

Massachusetts would become more attractive to high-wage businesses.

Isn’t it now time to look at fair and feasible ways to raise revenue that benefit our whole Commonwealth? Then, starting with the new Presidency in 2009, we can work on fairness at the national level. 

This month, the Republican-controlled Congress extended the Bush administration’s tax cuts on dividends and capital gains.

This is estimated to cost $70 billion over the next five years.  A few millionaires will save $42,000 in taxes. Not enough to buy an ocean-going yacht, but nice to have.

Most of us will benefit by $20 to $50. We can celebrate by taking the whole family out for pizza.

Almost all Republicans voted for this cut. Almost all Democrats voted against it.

In December, a bill came up for a vote that cut $40 billion over five years in welfare, child support, and student loan programs.

Guess how the vote broke down by party.

Yes, virtually all the Republicans who voted to give $42,000 in tax cuts to millionaires also voted to cut programs that help people of modest means get by, including kids and the elderly. 

Not one Democrat voted for those cuts.

Republican politicians have been chafing at President Franklin Roosevelt’s New Deal since it was originally proposed. Now that the Republican Party controls the executive and legislative branches, they want fast action to destroy as much of the New Deal as they can while they remain in power.

You can see Republican philosophy (“We’re all in this alone”) in the attempts to “reform” Social Security, cut taxes on the wealthiest Americans, and reduce spending on “entitlements.”

Yes, Democrats do believe that all Americans are entitled to basic fairness. Our President FDR said in one of his fireside chats:

“I am constantly thinking of all our people — unemployed and employed alike — of their human problems of food and clothing and homes and education and health and old age. You and I agree that security is our greatest need; the chance to work, the opportunity of making a reasonable profit in our business — whether it be a very small business or a larger one — the possibility of selling our farm products for enough money for our families to live on decently. I know these are the things that decide the well-being of all our people.

“Therefore, I am determined to do all in my power to help you attain that security and because I know that the people themselves have a deep conviction that secure prosperity of that kind cannot be a lasting one except on a basis of fair business dealing and a basis where all from the top to the bottom share in the prosperity.”

Democrats object to tax cuts for the richest Americans because we know what those cuts will mean for our country.
 
We’re already in debt as far as the eye can see and we’re waging a trillion-dollar war. In FDR’s words, the “human problems of food and clothing and homes and education and health and old age” – the “well-being of all our people” – will suffer even more.

Our country’s prosperity can’t be lasting and secure unless “all from the top to the bottom share.”

The gap in pay between the top executives at the largest corporations and the bulk of employees has grown shamefully, and the recent tax cuts accentuate that prosperity gap.

Meanwhile the federal government says it can’t afford to take on projects critical for the country’s future. It tells states they need to pay. The states tell cities and towns they need to pay. The cities and towns cut services, because there’s just not enough money.

It’s a downward spiral. No wonder there’s little available for investment in public education, public transportation, public infrastructure (road, bridges, dams), public safety, public health.

In this new century, our nation must — for the sake of its future health –- address some new challenges, such as global warming and escalating global competition for energy resources, while facilitating a prosperity that promotes the “well-being of all our people.”

In 2006 and 2008, it’s essential that Democrats regain power in Washington and across the fifty states. Work for the Common Good – led vigorously by all the Democratic presidents since the Great Depression – must resume.

This new century of our still youthful country, founded with the noble intention to “establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,” looks bleak indeed, unless we transform our future by electing Democrats to power once again.