MARCH 7, 1996
The '96 Presidential campaign is making taxes a central issue. Elizabeth Farnsworth discusses personal finance with a group of citizens in St. Petersburg, Florida. The discussion follows a report by Paul Solman on the history of taxation.
ELIZABETH FARNSWORTH: Now, for the answer to that question, we have six perspectives. Sam Casella is a high school student who plans to attend Florida State University in the Fall. Nadine Smith is a consultant on human rights issues in the Tampa Bay area. Ann Freeman is a public relations specialist from Clearwater. Winnie Foster is a great grandmother living in St. Petersburg. Betty Mann is a businesswoman from Gulfport. And John Williams is retired from AT&T and living in Sun City Center. Mr. Williams, let's start with you. Do you think the federal income tax is fair to you as a person?
JOHN WILLIAMS: Well, I think, I have nothing against federal taxes, except as long as they're furnishing me just the basic. You know, I don't want the government furnishing me everything in social programs, as long as they furnish me police protection, fire protection, good schools, parks, and stuff like this, I have no problem with taxes, and I think everybody ought to pay some taxes, I don't care who you are. You are to pay some taxes. And I certainly think that I don't want my taxes going to alcoholics, drug addicts, and women, if they're having babies. To me, this is definitely redistribution of the wealth.
ELIZABETH FARNSWORTH: Your complaint about the income tax is that it's gone way behind both--
JOHN WILLIAMS: It's gone way beyond what they should furnish us, yes. We should, we should be self-sufficient to the point we can.
ELIZABETH FARNSWORTH: Uh-huh. What do you think about that, Ms. Smith?
NADINE SMITH: Well, I mean, I disagree. In fact, what you consider basic services, umm, I mean, I believe certain social programs are absolute necessities. And we're not just a mob of people. Umm, I mean, I'm 30 years old. I have no problem paying--we all ought to chip in for those things that benefit society, and the government, you know, I'm like in the piece. This isn't about taxes to make some king's court richer. This is--this is about money that we all chip in to help, you know, what does the preamble to the Constitution say, provide for the common defense, promote the general welfare, umm--I think part of the problem in the discussion around taxes is that so much of it is focused on social programs that take up such a small percentage and not the waste we see in defense spending, where people are paying, what, $400 for a socket wrench for the Air Force. Umm, and also the corporate welfare, any type of abuses that are happening in social programs, and very little attention is focused on that. I think everyone is willing to chip in money. We all just need assurances that the money is being doled out fairly to programs that benefit all of us as a society.
ELIZABETH FARNSWORTH: How about you, Ms. Mann, what do you think?
BETTY MANN: Well, I think one of the worst abuses of the income tax system is the inheritance tax, inheritance tax, because people work all their lives, people have a business or a small farm or something like that, and they want to pass this on to their children. Well, they--up to $600,000 is all they're exempt, and from then on, they're taxed right away up until almost 55 percent of what they have, and it's almost impossible for anyone to have worked hard and then to turn around and try and leave that business to their children, and I think that's very bad. And I also think the capital gains tax is really stifling development here in this country. No one wants to sell anything because having to pay the huge capital gains tax, and I think if they do away with that, that you will see the economy start to move rapidly.
ELIZABETH FARNSWORTH: And what about the income tax? When you fill out your income tax forms--you know, it's just about that time--when you do that, do you feel resentful, or do you feel basically it's paying for the things that it should be paying for?
BETTY MANN: It makes me furious, absolutely. And what makes me so mad is that all the little slips of paper and all of the things, the receipts that you have to keep, and I really would like to see a flat tax because then I wouldn't have to keep all these files and all these boxes and all these little bits of paper, and I would just be taxed at a flat rate, and I wouldn't have to keep all of these records and everything. It would be a great help.
ELIZABETH FARNSWORTH: What about you, Ms. Foster, what do you think of that?
WINNIE FOSTER: I think we have to take a new look at what taxes are and what they mean. It was interesting in the piece we saw a few moments ago about what--go out and look back--part of the same system, to have the same needs for survival, so taxes, we have to have, we couldn't have gotten here to this interview today without roads and, umm, other things that taxes give us. We all depend on the services of government and we all see it from our own individual perspective. What I would like to urge people to do is to look at it from the broader perspective of the society and how we can all survive together.
ELIZABETH FARNSWORTH: Can you do that, Ms. Freeman, look at it from the broader perspective of society, or when it comes time to fill out those forms, is it just, does it just make you angry?
ANN FREEMAN: No. I believe in paying my fair share. I think that I believe that there are programs out there that, that are very worthwhile and very needed in our society. I think my biggest problem with it is the, the way the system is run, and the way the programs are run. I think that, uh, a lot of money is wasted and that the, the programs and the bureaucracy needs to be looked at in order to streamline these systems and make the money to get more bang for the buck basically and make it worthwhile. If the government were a company, it would be bankrupt. I mean, it just wouldn't run, because it, it just doesn't have the, the structure needed to be a lean, mean machine, and that, I think, is a large amount of the problem. I think that you get these taxes--and it channels down the system. There's nothing left for the people that are actually in the programs.
ELIZABETH FARNSWORTH: How bit of a burden is it for you? When you, when you--when it comes time to pay, is it a terrific burden for you to come up with the money to pay?
ANN FREEMAN: Well, my husband and I put away the maximum. We have the IRS take out the maximum out of our checks. We have no exemptions, uh, and we always end up owing a lot of money, and, yes, that is a burden, and it's very frustrating for me, because we can't have any more taken out, so now we have a separate bank account where we have to sock away money in order to pay the IRS, and, and that, that does bother me, because, you know, meanwhile, we want to do what every person in the United States do--well, a lot of people--we want to have a family, and we just bought a house, but we can't afford a lot of things, and it's, it's very tough, and people look at us, and I'm sure they say we're middle class, or upper middle class. You know, we both work, uh, but we work so that we can, we can have a family and the things that we really want to have, that our parents had, and I believe it's really tougher for my generation to have what our parents had, and I don't ever expect to live to the standards that my parents live in right now, and that makes me sad, because I think it's just declining for us.
ELIZABETH FARNSWORTH: Sam Casella, what do you think? You're--you aren't paying taxes yet, I don't think, at least not much. I know you do--you do work in a supermarket, right?
SAM CASELLA: I have in the past, and I paid a few taxes, and I think taxes are very important for the structure of our society. They, they help with welfare programs and police and fire, as you stated, and many other things--and it's all--it's all a worthy cause. I do see some problems with it. I think that, umm, there's a lot of waste, talk about $200 socket wrenches and such things, but I think that some of the programs need to be tweaked as well. Welfare, I always have a problem with, not the welfare but the fact that people can stay on it for their whole life. I think that's pretty wrong that you can just get a free ride. I think the taxes are meant to aid you, to help you in case you're down, and to aid and to help you achieve the American dream.
BETTY MANN: I think you--all your big companies here in the United States have downsized to become more efficient. And, uh, as you were saying, the federal government has not done this, and the federal government is bloated, and there are a lot of departments in the federal government that they ought to get rid of, like the Office of Education, and the Commerce Department, and, and downsize the departments that are still left. They're completely--the government is overextended, and the federal government now spends 22 cents of every dollar in the economy.
ELIZABETH FARNSWORTH: What do you think about that? You think we should--I think Ms. Freeman said the government should be lean and mean like a business, like the businesses that are laying--that are downsizing.
NADINE SMITH: Well, I don't see anyone, any political leader in the country who doesn't agree that there are programs within the government that absolutely need to be refined and to get back to their initial mission, but in terms of running the government like a business, it shouldn't be run like a business. Business is there to make profits. Government is there to serve the people, and the bottom line is different. In fact, I wish more businesses took on the roles of government. I mean, we, we give massive tax breaks, waive impact fees, give all these incentives to business to come to, to communities, with the belief that that improves, you know, the economy--it creates jobs. Now you have, you know, with this term, downsizing--burnt down, he made a commitment to help out his employees, and, uh, I think it's business that gets a tax break--reimbursing the community for all those tax vouchers and incentives that were put forward because, you know, if there was ever a time when business really did take care of its employees, that time no longer exists.
ELIZABETH FARNSWORTH: What do you think about that as a businessman?
JOHN WILLIAMS: Well, I don't agree with anything she said, you know. I think that you're talking about downsizing now, and I don't know where we get the employees to start out new businesses if you weren't laying off some employees. You've got to lay off employees. There's been 27 million new jobs created since 1979, besides all the layoffs that's been happening.
ELIZABETH FARNSWORTH: Are the political candidates addressing the issues that you think should be addressed?
JOHN WILLIAMS: Well, not really, I don't--
ELIZABETH FARNSWORTH: I'm thinking about tax issues.
JOHN WILLIAMS: I don't--flat tax is not going to happen anytime soon because there's dozens of tax structures set up to keep the politician in his office because there are lobbyists and you know, getting a break for this company and that company, and then the PACS donate to the politician, and if you've had a flat tax, you knock all that out.
NADINE SMITH: That's exactly what I'm saying, though. That's exactly the problem, where, where lobbyists and companies continue to create a tax structure that benefits them and they put money back into politicians, and that's the imbalance that I think most people resent, is seeing that kind of thing happen.
JOHN WILLIAMS: They're the ones making the laws. You know, the politicians are the ones down there making the laws.
NADINE SMITH: Backed by the corporations.
ELIZABETH FARNSWORTH: How about you? Are the candidates addressing the issues you think should be addressed on taxes?
WINNIE FOSTER: Not fundamentally. I think that we're getting some very tired old sound bites about taxes. I was really happy to see President Clinton's remarks the other day about addressing the issue of downsizing and, and the really exorbitant CEO perks that have been following from the downsizing of--the corporations are laying off and, and slashing into our communities with laying off middle managers, who have been great contributors to our communities. These CEO's are walking away with not only big salary perks but also stock deals. And as far as the legislators being the ones who set tax policy, I would have to say that it seems to me as though it's the tax lobbyists that are setting tax policy, and, umm, I think that the average American citizens really have not had that much to say about it or even understood the process of what was going on.
ELIZABETH FARNSWORTH: What do you think, Sam Casella? Do you think that the election is addressing the tax issues that you think it should address?
SAM CASELLA: I think it is. Umm, the remark was--
ELIZABETH FARNSWORTH: Are you glad the flat tax is up as an issue, for example?
SAM CASELLA: No--well, I think--I think the way the fellow over there does about flat tax, that it really isn't--it's not thought out enough. Umm, the tax system that we have now drives our economy. I want to refer back to when they were talking about companies and the government and who should act like who. I think that the government should act for the people, umm, in the name of the people, to help the people, to collect taxes, and it should do its job. I think companies should not be dictated by government. They should do what they want to do to make money because that's what their jobs is. I think you need to keep a separation. You can't mix everything together like that.
ELIZABETH FARNSWORTH: Okay, one last question to you. Do you think that--is the campaign addressing issues you think it should on taxes?
ANN FREEMAN: No. I think there's a bunch of rhetoric, sound bites, as the others were saying earlier, and I think that we, hopefully we'll hear more about the issues and taxes when the primaries are over, and there's Clinton against, well, right now it looks like Sen. Dole, uh, and we'll hear more about the issues, I hope, because I'm--I don't want to see any bashing anymore. I just want to see what the issues are and see which candidate I agree with and, and go from there.
ELIZABETH FARNSWORTH: Okay. Well, thank you all very much for being with us.