WASHINGTON D.C. – Marqueece Harris-Dawson, a longtime community leader in South Los Angeles, asked a financially struggling mother what she thought about the suggestion that, unless she pays federal taxes, she doesn’t have “skin in the game.”
The mother looked Harris-Dawson squarely in the eyes and told him that her son is serving in Iraq. “Don’t tell me that I don’t have skin in the game,” she said.
Harris-Dawson, president and CEO of Community Coalition, related this encounter while moderating a July 26 discussion by Washington D.C.’s leading tax policy analysts and researchers of a new report “Skin in the Game: The Federal Tax System, Tax Reform, and Poor Families.”
The report and panel discussion couldn’t be more timely as lawmakers are debating whether Bush-era tax cuts should be extended or allowed to expire – and who will benefit. Marguerite Casey Foundation, which provides grants to organizations in some of the poorest states in the country, published “Skin in the Game” to make sure low-income families are not forgotten in the debate, which so far has focused solely on businesses and the wealthy.
The report, researched and written by Michael Evans of K&L Gates, emphasizes that progressive federal tax reform is necessary for families to work, save, and make economic progress. It also points out that low income families do pay taxes including payroll taxes, and they pay a proportionately higher rate of state and local assessments, such as sales tax.
“It is clear from this report that every family has skin in the game,” said Luz Vega-Marquis, president and CEO of Marguerite Casey Foundation. “We need to level the playing field to give families the opportunity to work, to rise out of poverty and to thrive. Propping up government shortfalls on the backs of poor working families is a losing game plan.”
Panelists for the discussion of “Skin in the Game” were William Beach of the Heritage Foundation; William Gale with the Urban-Brookings Tax Policy Center; Chuck Marr with the Center on Budget and Policy Priorities, and Alan Viard of the American Enterprise Institute. Their audience included congressional staff, representatives from the U.S. Department of Treasury, key financial committees, the Congressional Black Caucus and others.
Conservative panelists said boosting businesses and encouraging economic growth and economic opportunity will do more in the long run to raise families out of poverty.
“The best anti-poverty program would be a rapidly growing economy,” said William Beach, director for data analysis at the Heritage Foundation. “If people pay taxes, they feel the cost of government more acutely, we want people to be in the tax system and be involved financially in their government.”
Alan Viard, resident scholar at the American Enterprise Institute, said dating back to the Ronald Reagan administration in the 1980s, federal policies have been firm that no one in poverty would pay federal income tax. “Now we are way beyond that,” he said, “Programs can’t grow forever. Spending cuts and tax increases will have to be made if we want to maintain programs.”
Progressive panelists lamented even needing to talk about taxing the nation’s poorest families.
William Gale, co-director of the Urban-Brookings Tax Policy Center noted that there is no indication that people who don’t pay federal income tax have a lower sense of civic responsibility.
“There is no evidence that they will support bigger government,” he said.
Panelist Chuck Marr, director of Federal Tax Policy at the Center on Budget and Policy Priorities, urged continuing the Earned Income Tax Credit, calling it a “tremendous success in keeping families afloat and encouraging people to work.”
He said eight million more people would be plunged into poverty if they were required to pay federal income tax.
Marr also underscored an essential point in the report, urging lawmakers to give careful consideration to how tax reform can improve the condition of poor families, or at the very least “do no harm.”
More panel discussions on “Skin in the Game” are being scheduled for the fall in New Mexico and Florida.