It’s that other giving season of the year — tax time.
I keep coming across a quotation from the 20th-century French philosopher and Jesuit priest, Teilhard de Chardin: "The future belongs to those who give the next generation reason for hope."
The divide between wealth and poverty continues to expand. It’s not only by the numbers. People are living vastly different lives and realities depending on their level of economic security. Creating a future of hope is critical and will take the conscious commitment of all of us.
The average income of the top 1 percent of U.S. households is picking up steam, rising about 12 percent in 2010, while that of the bottom 90 percent remains stagnant. About one in six Americans live below the poverty line, the 2010 census reported. Locally, 12.5 percent of residents are living under the poverty line, says the Hawaii State Data Book, which also notes the data understates the prevalence of poverty here.
The poverty line’s dollar amount is approximately $25,000 income a year for a family of four. It’s difficult for many of us to conceive of keeping a family together on this amount. How can they get along, let alone get ahead? For those whose income is near this range, Hawaii tax burdens create added barriers to moving out of poverty and "charges them higher tax bills than all but four other states," says the Center on Budget & Policy Priorities.
Almost half the states — 24 — now offer an earned income tax credit (EITC). The state Legislature has refused to pass a state EITC year after year for more than a decade. A refundable tax credit for working-poor families can give them a boost of income that will go right back into the community, spent on family needs and education savings.
Of course, Hawaii does offer an increasing number of tax credits to corporations and businesses, but they rarely include any required or evaluative measures to assure benefits to Hawaii workers or the local economy. Federal corporate tax loopholes and rebates allow the richest companies to pay no taxes and keep profits and reserves in foreign, tax-free shelters.
Bushera tax cuts keep tax levels low for wealthy individuals, as well. The supposed trickle down for job creation and general economic improvement remain unproven. In 2011, the Center for American Progress put together an interesting chart from U.S. statistics showing no correlation between lower taxes and more jobs.
Of each dollar of 2011 federal taxes, 27 cents will go to military-related spending, 2 cents to education, about a half-cent to welfare. These are not everyone’s priorities. The "Buffett rule" was voted down in the Senate yesterday. Inspired by investor Warren Buffett, the tax reform would reduce income-tax inequality for those earning more than $1 million. It was never likely to pass; it’s an election year and tax fairness is about as popular as campaign spending reform among politicians.
But many hundreds of wealthy individuals have officially taken a pledge toward greater tax fairness. United for a Fair Economy has been organizing for tax fairness rooted in two core beliefs: First, that a fair tax system is one that is progressive and transparent and generates enough revenue to fund quality public services and provide opportunities that enable all people to thrive. Second, comprehensive participation of people at the grassroots level is integral to achieving long-term political change.
For 40 years Hawaii People’s Fund has been supporting just such grassroots organizing. We encourage taxpayers at all levels to learn more, ask questions and pay attention. It’s up to us to ensure that a democratic system is indeed of, by and for the people.