As I've written before, there is something about tobacconists that creates an atmosphere for honest and respectful dialogue, in which longevity of the relationship is not a prerequisite.

My travels took me to Draper Tobacconist, where I happened upon a wonderful couple who embrace most of what I oppose politically. They found it difficult to believe that the U.S. federal budget deficit in the first half of fiscal 2010 was down 8 percent from the same period a year ago. Moreover, it mattered little that my sources for this data included the U.S. Treasury Department, Reuters and the Washington Post.

But where our philosophical differences were most glaring was on the issue of tax cuts. They held steadfast in the belief that tax cuts instituted by President George W. Bush should remain for everyone, and not the just 97 percent, supported by President Barack Obama and most of the Democrats on Capitol Hill.

I suspect they were not part of the 3 percent of the wealthiest Americans who would be left out of the president's tax cut extension.

They were most likely engaging in what I define as middle-class economic forecasting -- the belief that one will someday be part of the 3 percent and do not wish to support policies that could hurt their future economic self-interest, regardless of their present condition.

They were also quick to cite the conservative talking point of basic fairness. According to a 2009 report by the bipartisan Tax Policy Center, 47 percent of Americans have no federal income tax liability.

But to focus solely on income tax is misleading because it ignores that most Americans pay more in payroll taxes than they do in federal income tax.
Only a very small percentage of Americans pay no federal taxes -- and most of those folks are paying at least some state taxes.

Therefore, the issue of tax fairness should be based on the percentage of total taxes that each income group pays, and the percentage of total income that group receives.

By this standard, despite what angry, frothing talk show hosts may claim to the contrary, there is relative fairness across the board.

But this is not the conversation that we're collectively having. The popular right-wing discourse is to suggest the rich should not be taxed because they are responsible for job creation, and the middle class (however broadly defined) should not pay because they are the workers; how about the 47 percent who pay no federal income tax?

This vaunted 47 percent of tax dodgers are a cabal of single mothers working minimum-wage jobs, seniors on fixed income, along with those working in the fast-food industry and the like. They pay no federal income tax because their incomes are so low or they have credits and deductions that eliminate their liability.

They are the standard by which those who valiantly stand up for tax fairness for the wealthiest Americans base the legitimacy of their claim.

Without the benefit of K Street lobbyists, the 47 percent who pay no federal income tax is so effective that others, formerly part of the middle class, are involuntarily racing to join them.

According the Census Bureau, the number of the working-age poor increased to the highest level since the 1960s. The bureau's finding state that one in seven Americans now live in poverty. The overall poverty rate climbed to 14.3 percent, or 43.6 million people.

In addition, the percentage of Americans without health coverage rose from 15.4 percent to 16.7 percent -- or 50.7 million people -- mostly because of the loss of employer-provided health insurance during the recession.

With lightning speed, America has gone from what former President George W. Bush coined as the "ownership society" to an increasingly impoverished one.

The impact poverty has on every aspect of life, from education to health to mortality, is staggering. Under the current recession, more Americans are headed toward the impoverished side of the economic meter than those stumbling to become part of the illustrious 3 percent.

This isn't class warfare; just a sobering analysis of where the country is headed.
If we continue to believe America can sustain its greatness while increasing the number of impoverished families, then we're smoking something a lot stronger than anything sold at Draper.

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Steve Puma: Cigar lover, debater, sustainability consultant.

Byron,

I love your blog, and your straight-forward writing.

I have been aware of your first point, the open dialogue that occurs in cigar shops and lounges, since I first discovered the joys of cigar smoking in the early 90s. I am always amazed at how different the experience is from frequenting a coffee shop or bar.

Open dialogue does occur in those places, but usually you need to be a regular, whereas, with cigars, it is instantaneous amongst strangers. The tobacconist appears to be universally accepted as neutral and friendly ground.

As to your other points, I believe that the problems stem from a general lack of understanding of our tax system, economics, how our political system REALLY works, plus, as you say, very poor future forecasting on the part of the middle class. Both parties feed on these gaps in knowledge, to create fear, and push their agenda.

Therefore, we no longer have a representative democracy, we have a plutocracy: governance by a small, elite ruling class.

Make no mistake: the politicians are only a small component of this elite ruling class. The real power lies in the hands of K-Street lobbyists, large corporations, and the super-wealthy. You just need to follow the money trail.

The main tool of these elites is the U.S. tax code. The IRS code is so incredibly complex, that not even IRS employees fully understand it!

Essentially, lobbyists earn millions of dollars for their corporate clients, in the form of tax breaks from politicians, which become buried in the tax code. As individuals, we don't notice the change, but it comes strait out of our pockets, and there is little we can do about it, because our votes are no longer enough: in order to compete with these elites, we need to have huge sums of money as well!

So, what can we do about this situation? We need to redesign the tax system, from scratch. Getting rid of payroll taxes, completely, would be a great start.

Regardless of how a new tax system is implemented, all Citizens should have the right to receive their full paycheck, and not have it confiscated by their government. This would have many benefits, especially for those lower on the income scale. It would greatly encourage savings and investment, and remove the negative economic effect that payroll taxes have on employment, creating jobs.

But the most interesting benefit of no payroll taxes, would be for all citizens to really know just how much their government is costing them, and to really feel the pain of writing that huge tax check!

I believe that, among other things, this would be a great impetus for citizens to begin participating in their governments again, at all levels.

Delegating the task of government to professional politicians is what got us into this mess in the first place. Only mass participation can get us out of it.

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October 06, 2010
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