Taxing Others in the Age of Trump: Foreigners (and the Politically Weak) as Tax Subjects
The Sanford E. Sarasohn Conference on Critical Issues in Comparative and International Taxation II: Taxation and Migration (Fall 2017)
19 Pages Posted: 6 Apr 2020 Last revised: 24 May 2021
Abstract
Supporting a tax increase during the past couple of decades might sound the death knell for the career of a U.S. politician. Some attribute George H. W. Bush’s presidential reelection campaign loss to violation of his “no new taxes” pledge.[2] Conflicting with the political toxicity of new taxes and tax increases is the relentless demand for revenue to operate government and fund the fulfillment of campaign promises. The fiscal discipline to eliminate the need for revenue increase rarely accompanies the political rhetoric committing to decrease taxes and never increase them again.
For many politicians, the funding issue becomes a matter of decreasing funding for programs the politician disfavors and using the decreased funding for programs the politician favors.[3] These conflicting goals of funding spending programs while reducing (or at least not increasing) taxes have encouraged development of “non-tax” revenue sources. User fees for governmental services that previously had been free or low-cost have proliferated.[4] Law enforcement agencies routinely use property forfeitures to supplement revenue from government tax allocations—a phenomenon observed in the numbers of forfeitures that are not accompanied by any prosecution.[5] At the state and local level, revenue-based policing with aggressive enforcement of misdemeanors has become commonplace.[6] Hotel and entertainment taxes capture revenue from nonresidents who do not vote locally.[7] Automatic increases of property tax from periodic value reassessments are politically more acceptable than a legislative vote or a referendum in states requiring a vote to increase a tax rate[8] because they do not attach specific political blame for the increase. When revenue falls short and tax increases seem better than spending cuts, income tax increases and steeper progressivity in income tax rates remains impractical. Regressive consumption taxes falling most heavily on the non-affluent and politically weak are the preferred choice for additional revenue.
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