How do we pay for change

And the big question is . . . how do we pay for change?
“Oh . . . my taxes . . . oh my!” For starters, can we bring back the romantic days of IRS agents against big tax cheats like in the days of Al Capone. Let’s change tactics and recover tax dollars for the budget instead of raising tax rates. Empowering IRS agents with the time and resources necessary for examining big budget tax returns could help recover larger amounts of taxes than would be possible from examining many, many small returns. It is ridiculous that IRS inspectors have unreasonable accountability criteria to meet. Instead of going after a goal of recovering maximum tax dollars that had been withheld illegally, IRS agents are legislated to produce large numbers of audits without specific goals towards retrieving unpaid taxes. So lots of little easy audits get done by the overworked staff. Examining the tax returns of low income workers that may be claiming the Earned Income Credit may generate large numbers of cases but frequently those cases don’t result in any action or much recovered money if any.

Spark the public interest in tax cheats. If we pay, big business tax cheats should pay too.

If a retired business man has a half million in deductions alone, I would think an IRS agent might be curious about what types of expenses a retired person might have that required untaxed money.

Jumping to a potential new pot of taxable income – Medical marijuana dispensaries in some states have been trying to keep careful records and pay taxes on service related revenue but the discrepancy between federal and state laws have made it difficult for some to stay in business. Reasonable business deductions have been disallowed and excessive amounts of tax are being demanded from the health care services. [1, 2] However sales tax on a prescription medication isn’t legal anyway and donations to a non-profit cooperative would also seem exempt from standard business tax guidelines. [3]

Taxes can be used to help promote changes that reduce long term risks and costs. Preventing problems through education can be an inexpensive way to pay for change.

Reducing health care costs with improved preventative nutrition education programs has been proven both possible and cost efficient. The Supplemental Nutrition Program for Women,Infants and Children (WIC) has been found to save three to eight dollars in Medicaid costs for every one dollar spent on WIC. Actual savings may have been even better because some children on WIC have private insurance and their health care wouldn’t have been included in any Medicaid studies. The WIC program is a health program for working class families. A family making equal to or less than 185% of the poverty line with expected infants or children under age five may be eligible for WIC services.
  • About the WIC program: []
  • WIC Program Participation and Costs” (July 26, 2012) A chart showing the numbers of participants, the total food and program expenditures and the average value of the food package provided to the participants. [] The program’s first full year served 344,000 participants who received health education and screening services and a food package valuing an average of $18.58 per participant per month. In 2010 the program served 9,175,000 participants and provided a food package with an average monthly value of $41.44.
  • Article by Douglas J. Besharov and Peter Germanis “Is WIC as Good as They Say?” (First published in “The Public Interest,” Winter, 1999) [] *this article is reviewing the cost savings claim of $3 dollars saved in Medicaid costs for every dollar spent for a pregnant woman participating in the WIC program. The following excerpt regarding the home visit maternal support program suggests that unseen cost savings could be incalculable:

A randomized experiment in Elmira, New York, found that the nurse home visitors achieved a 25 percent drop in smoking by the end of the pregnancy, a 75 percent reduction in premature births among pregnant women who had smoked, and large birth-weight increases for babies born to young teen mothers (nearly 400 grams for mothers aged 14 to 16). In addition, 15-year follow-up findings indicate almost a 31 percent reduction in the subsequent childbearing for low-income, unmarried mothers (1.1 versus 1.6 subsequent births). Verified cases of child abuse and neglect were 79 percent lower, drug and alcohol problems 44 percent lower, arrests among the mothers 69 percent lower, and welfare use 33 percent lower. As a result, the program led to large savings in government spending. (Replications of this study are showing similarly impressive results in Memphis, Tennessee, and Denver, Colorado.)

The article also suggests that a more authoritarian approach to the educational services provided in WIC could improve outcomes even more. I would be concerned that a more authoritarian approach could also decrease participation in a voluntary program and decrease the positive outcomes. Forcing change rarely works for long. Few people want to be told how they should behave or how they should eat or feed their children.

Providing guidance about risks and benefits of a variety of choices can help individuals make their own decisions about what best fits their lives and abilities. Being told what should be done and exactly how it should be done can backfire by adding a larger sense of failure or shame to a person that may be struggling in circumstances unimaginable to the average person. The wrong message at the wrong time might tip the person in difficult circumstances into giving up altogether. People choose to make changes and have to work at developing new habits. Tax dollars can be used to help people make affordable health decisions before chronic problems develop.

Consider what kind of legacy we want to leave our children. Do we want our children and grand children to suffer further health dangers from increasing levels of pollution in the air, water and food supply; increased numbers of infants born with birth defects or who are premature or low birth weight; worsening weather, storms and floods; desertification of farm fields; diminishing numbers of wildlife species; and infertility issues for humans and other species? Or do we want to reverse the reversals on policies that help protect the environment and health?

  1. Article by Robert W. Wood, “Taxes are Killing Medical Marijuana Like Roundup,” (Aug. 3, 2012) []
  2. Article by Robert W. Wood, “Medical Marijuana Dispensaries Keep on Truckin’ Despite IRS,” (May 24, 2012) []
  3. Article by Mike Baker, A.P., “State tax collectors audit medical pot dispensaries,” (Aug. 18, 2012) Seattle Times: [seattletimes]
  4. A video statement from a retired Deputy Chief of police regarding crime and drug policy, “You won’t believe what this cop says about the War on Drugs,” Youtube: []
Disclaimer: Eat to live, not eating doesn’t end well. I hope to have helped, not harmed. A blog spot is for informational purposes only and is not the same thing as individual counseling. Abruptly stopping medications can result in death.