This blog has made interesting connections, but you must be asking what is the connection between taxes, the Final Four and Bush’s America? The answer–tigers.
Now that you are wondering how I am going to weave this one together, let’s start with the Final Four. Although the championship game was last week it is on my mind because I finally had a chance to talk with my son about it. I had picked Kansas to win it all in my original brackets based on the fact they led the NCAA in a host of statistical categories, the most important of which was their scoring margin per possession. They scored 1.176 points every time they had the ball and their opponents scored only .874. They also were number one in field goal percentage and ranked high in free throw percentage.
Along with a lot of other hoops junkies, both of us had rated the Memphis Tigers low, because they had one of the worst free throw shooting percentages in the country, and the worst of any team in the NCAA tournament. Their 59.6% for the team would be unacceptable to most good high school teams.
As far as I know no team with such a miserable free throw percentage had ever made it to the Elite Eight let alone the Final Four. Yet for some reason, the teams who played Memphis refused to take advantage of their miserable free throw shooting. Certainly NCAA officials and the TV networks must have cringed at the thought that some coach would turn the game into a free throw shooting contest. But in the end that’s what won Kansas the national championship.
My son had picked UCLA and North Carolina in the final game. Neither of us had Memphis even getting out of their region. When I talked to my son about that final desperate shot for Kansas he said he, along with a lot of America cheered when it went in to send the game into overtime.
Then he went on to say that if Memphis had won it would have gone against everything he had practiced as a college player and taught in summer camps such as the ones in DC for the children of elite, including a Saudi who arrived in a limo and the son of a foreign ambassador. One drill he used to do involved blindfolded shooting, and by his senior year in college he could routinely hit 70% that way. “Whatever happened to fundamentals?” he asked.
That precipitated a long conversation about the decline of both shooting and defense which has in part been responsible for this country’s miserable performance in international games. I recall talking to a pro scout many years ago who said on the whole Europeans were better shooters than Americans because American coaches no longer emphasized the fundamentals of shooting. To my son, the Tigers epitomized lack of attention to fundamentals.
That observation about fundamentals applies to tax day, the Times and George Bush’s America and curiously all also involve tigers. For example, there probably is a tiger somewhere in your tax report, because TIGER is the acronym for Tax Information Group for ECommerce Requirements Standardization. The TIGER website explains:
[TIGER] develops and maintains tax electronic technical format standards for a variety of tax filing and other related government electronic reporting or data exchange applications. Its members are exploring the use of XML in tax filing processes. Its goal is to develop XML resources relating to an XML-based tax data submission process for use by all state and federal tax authorities, based on the commitment and contributions of a variety of federal and state government personnel and the participation of a broad group of interested industry partners.
TIGER is an interesting project I would like to know more about, but for now the big picture is that as all record keeping becomes electronic, so do our taxes. Someone on the radio the other day said it sure is interesting that the government can make it so easy to file our taxes but so hard to find out about anything else.
TIGER has been around for some time, which suggests that this country has had the potential to track and audit the Bear Stearns of the world a lot more critically than they have. Instead what TIGER calls an “XML-based tax data submission process” falls on you and me and not on the big guys. Each electronic return we send in makes it a lot easier for the feds to keep track of us. Edward J. Black, president and CEO of the Computer Communications Industry Association points out:
People did not feel totally comfortable with a complete turnover of information to the government.
Reading about TIGER reminds me of the Memphis Tigers and the Final Four. Memphis, as anyone who watched them knows, was a flashy team. They might not be able to shoot free throws, but they could run the floor and score. TIGER is yet another example of our government also becoming enamored of the flashy while forgetting fundamentals.
I doubt very many of you had even heard of TIGER when you worked your way down all those columns of whichever 1040 and assorted other forms you had to fill out. If you were like me I know you could not help but get angry and frustrated. First, why does this have to be so complicated? Second, the folks who the tax system is supposed to be about have teams of tax preparers and lawyers who do all the dirty work while they take a tax holiday. Finally, if you owe something it seems too much and if you get a refund it seems too little.
You mentally go back through all your expenses, or if you use one of those software programs, it does it for you. Ours told us we spent several grand just on gas, in part because my wife has a long drive to work and does a lot of driving on the job–but also because Halliburton gas costs over $3 a gallon. Unlike some CEO, she has no company car and according to our conversations with the IRS can deduct none of this. Then there are groceries, mortgage payments, and for us college tuition payments. I’m sure those of you reading can add a few pet expenses of your own.
When you add all this up and then look at what you managed to save (if anything), you realize even with an income that would have been the envy of your parents you are paddling like heck to keep your head above water. The so-called progressive income tax does not seem so progressive any more. In fact a lot of us think of it as regressive.
In 1906 William Jennings Bryan, who had long supported an income tax stated:
I am so convinced of the justice of the income tax that I feel sure the people will sooner or later demand an amendment to the Constitution which will specifically authorize an income tax, and thus make it possible for the burdens of the Federal Government to be apportioned among the people in proportion to their ability to bear them. (Speeches of William Jennings Bryan, p. 71)
Seems logical. But it became anything but that when Republican President William Howard Taft sent what became the income tax amendment to Congress in 1909. During the debate, an old Bryan colleague, Ollie James of Kentucky laid out the case in much the way Bryan had:
Mr. JAMES. “Who is prepared to defend a system of taxation that requires a hod carrier, who for eight long hours each day winds his way to the dizzy heights of a lofty building with his load of mortar or brick, to pay as much to support this great Republic as John D. Rockefeller, whose fortune is so great that it staggers the imagination to contemplate it and whose property is in every city and state in the Republic and upon every sea protected by our flag….. How men can defend a system of taxation in a republic which requires of the poor all of its taxes and exempts the rich absolutely I am totally unable to see. In the everyday walks of life we expect more for church, for charity, for the uplifting of society, and education from those who are more prosperous, most wealthy, most able to give. Yet the system of taxation advocated by the Republican party drives the taxgatherer to the tenement house and makes him skip the mansion, drives him to the poorhouse and lets him pass the palace..44 Congressional Record 4398 (1909)
What had James and other Democrats snarling like a tiger was that the GOP highjacked the income tax. Writing in some familiar language Phil Hart has written:
Labor thought it was going to level the playing field with an income tax which would tax only the accumulated wealth of the nation. The purpose of the Income Tax Amendment (the 16th Amendment) was to bring tax relief to wage-earners. That was the plan, but the income tax has not worked out this way.
Instead while the government spends time and money on projects like TIGER, the fundamentals of Bryan and James have been turned on upside down: wages are taxed at a higher level than the wealth earned by most rich people such as capital gains. That is why CEOs take most of their money in stock options–it is not taxed the same way as the money you and I earn.
But the Democrats of recent years have been part of what is the largest government-sponsored reverse transfer of wealth in American history, particularly the Bourbons known as the New Democrats of the Democratic Leadership Council. Whatever happened to fundamentals? We could use a few Ollie James’ today, since most of the Democratic Party seems to run the other way when the word tax is mentioned.
Which brings us to Monday’s New York Times whose front page featured an article “Ultra Rich Keep on Spending.” So while all of us were filling out our 1040s here is what the rich were doing with their money. One spent $50,000 on a four day trip to Florida that included:
{Getting} around by private jet, helicopter, Hummer limousine, Ferraris and Lamborghinis; stayed in V.I.P. rooms at Casa Casuarina, the South Beach hotel that was formerly Gianni Versace’s mansion; and played “extreme adventure paintball” with former agents of the federal Drug Enforcement Administration.
The article goes on to detail other splurges by the ultra-rich. One spent $20 million on a refuge for endangered tigers. Others buy $35,000 bottles of wine, $35 million yachts, and $465,000 Rolls Royces.
The article includes the statistic that while the rest of America is worried about mortgage foreclosures, buyers have closed on 71 New York apartments worth over $10 million each compared with 17 last year. Marc Sperling, the 36-year-old president of an equity-trading company, had this to say about the mortgage crisis:
I don’t want to sound harsh, but the people who were buying million-dollar houses with a combined household income of $70,000 or $80,000 were the ones who were chasing easy money.
The ultimate gross-out in the article is the revelation that the chairman of Bear Stearns, James E. Cayne, paid $25 million for a condo just days before his firm collapsed and I assume is living there quite well while the rest of America sorts out the mess he left.
It’s all about fundamentals. The ultra-rich have money to spend on such extravagances because George W. Bush gave them huge tax cuts which in his twisted economic philosophy were supposed to stimulate the economy and trickle down to the rest of us.
Well, I’m still waiting for my trickle. $35 million yachts, $35,000 bottles of wine and $20 million tiger refuges are not trickling down to anybody. That one yacht and the tiger refuge alone would go a long way toward paying the money President Bush says we cannot afford for children’s health insurance. But the ultra rich seem to care more about tigers and cruises than they do about poor children.
It’s all about fundamentals. Have we forgotten Bryan’s simple message:
The burdens of the Federal Government to be apportioned among the people in proportion to their ability to bear them.
Among these fundamentals, as Bryan would be the first to point out, is that the playing field should be level for all Americans. A recent Pew research report showed more Americans are having their doubts about that.
So in the year the NCAA tournament features a historic first–a national finalist who shoots free throws worse than the average high school team–we find ourselves in the midst of a financial crisis brought on in part by a gentleman who bought a $25 million condo just days before his firm collapsed and we tax payers paid for his screw-ups. You might say our government hasn’t exactly been practicing their free throws and other fundamentals or we wouldn’t be in this mess.
It seems pretty obvious that when a basketball team shoots 59% from the line neither the coaching staff nor the players care much about free throws. It also seems apparent when you spend $20 million on tigers and nothing approaching that on people, you care more about tigers than people.
The final chapter of the Memphis Tigers basketball story is well-known–their lack of attention to fundamentals finally caught up with them when it mattered most–in the last minute of a national championship. You wonder when lack of attention will catch up with those who spend $20 million on tigers and those whose generosity with tax cuts and lack of attention to fundamentals enabled them to do so.
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