For my write-up today on volume 2 of Richard Nixon’s memoirs, I’ll use as my starting-point something that Nixon says on pages 522-523:
“Before long I concluded that the release of the income tax returns had been a mistake. It was the same old story: those who had been demanding that I put out my returns did not really want conclusive proof that the stories about the allegedly illegal purchases of my houses and the supposedly vast secret investment portfolios were false. They seized on the fact that I had large deductions as if it were immoral not to pay more taxes to the government than the law required to be paid.”
The context of this passage is Nixon’s tax scandals. Overall, Nixon affirms that the accusations against him were false. In a couple of cases, however, Nixon acknowledges that things were rather murky. First, there was the question of whether Nixon’s sale of some of his San Clemente property was a capital gain subject to taxation, and Nixon says that his own accountant and tax professionals said no, whereas others said yes. My impression is that Nixon went with the no answer! Second, there was the tax deduction on the donation of pre-presidential papers to the National Archives, a deduction that had been used by Lyndon Johnson. In 1969, the deduction was eliminated, and Nixon just assumed that those doing his taxes and handling the donation documents took that into consideration. Unfortunately, they did not. It was in the context of disclosing his finances that Nixon said his famous line of “I am not a crook.”
What I’d like to talk some about in today’s post is Nixon’s statement that “They seized on the fact that I had large deductions as if it were immoral not to pay more taxes to the government than the law required to be paid.” I’m reminded of a variety of things here: Mitt Romney’s release of one of his tax returns during the 2012 Presidential election, and the criticism of him for not paying enough taxes, as if he lacked civic-mindedness in taking the deductions that he did; how prominent Democrats, such as Al Gore and Tom Daschle, have been criticized for trying to avoid paying higher taxes, when Democrats are the ones who promote raising taxes on the rich for the common good; statements by wealthy men such as Bill Gates and Warren Buffett that they should be paying higher taxes than they do; and Desperate Housewives actress Eva Longoria’s statement at the 2012 Democratic National Convention that she needed a tax cut when she worked as a waitress, but she did not need a tax cut as a successful actress.
What can I say about all of this? On the one hand, I think that taxes are necessary for the public good—-for parks, for programs for the needy, for public libraries, and for a host of other services, as well as deficit reduction. Government, in my opinion, accomplishes a lot of good. On the other hand, government can also be quite wasteful, and so I can understand the concern of some that taking more of their money and giving it to the government is not a good use of their money. Economist Bruce Bartlett says that, in parts of Europe, people get their money’s worth from their taxes. Here in the U.S., my impression is that many people don’t think that they’re getting their money’s worth. Either they take certain services for granted, or they have had bad experiences with government, or something else accounts for their cynicism about government.
While I believe that the rich should pay more taxes, I don’t judge Mitt Romney for deciding not to pay as much as he could have. The reason is that he donated a lot of money to charity. He’s civic-minded, but that’s expressed through private donations, as opposed to paying more taxes. I am much more disheartened by the wealthy and prominent Democrats who try to dodge higher taxes, for, if they are so optimistic about the government doing good, then they should demonstrate their commitment to that notion in their own lives. And I admire the wealthy people who admit that they don’t need a tax cut.
I think that, somehow, the government needs to show people that it actually deserves more of their money, rather than just assuming that it does. Perhaps it can do so by making people feel that they’re getting their money’s worth through government programs, and by cutting out governmental waste and inefficiency.