Carson Varner
The ides of April
every bit as
significant as March
“B
eware the ides of April.” In
high school Shakespeare you learned it was
March 15 when Caesar said, “the ides of
March are come.”
“Aye, Caesar; but not gone,” replied the
soothsayer, shortly before “Et tu, Brute?”
and Caesar was assassinated.
Illinois State University is in the sprint to
final exams and there are only a few more
chances to throw ideas out, shake things up
and get students to think. Students’ minds
numb a little near the end.
Repetition and review are an important
part of teaching. I want to do a little review
of the semester; present ideas in new ways
and possibly even digress a bit. Welcome to
my class “Legal, Ethical and Social
Environment of Business.”
It is the ides of April.
O Captain my Captain! (I used to be an
English major.) It was when lilacs last
bloomed in the dooryard that April 15th
when Lincoln died, and with him the
promise of national reconciliation that would
then take 100 years or more. When I was a
college freshman, the world again stood still
after the assassination of President John F.
Kennedy.
How could I know as I spoke the
unfolding events in Virginia would stop my
students’ world? Remarks on the Second
Amendment were part of the next class, as
was an account of excessive notions of
student privacy that forbid a college from
informing parents when their child is
severely troubled. Informed parents might
have prevented the tragedy.
Less seriously, in France grades are
posted by name. I can’t even post grades by
student number.
On another April 15 nearly 100 years
ago, the ship that they thought the water
wouldn’t go through was on her maiden trip
at full steam in iceberg waters.
Shakespeare didn’t write about the
Titanic, but he knew that unbridled ambition
without caution can get even a giant figure
in deep trouble.
Learning dates can be mindless memory,
but properly taught they can be hooks on
which to hang important concepts and ideas.
We teach that learning should be a lifelong
process.
I hope April 15 will be a day to job the
memory. My students will reflect on what
we covered many years before.
The ides aren’t all bad. Let’s jump from
the 1912 Titanic to exactly 70 years ago
when the color barrier was broken. Civil
rights and diversity take on greater meaning
when we learn where we were. In the
dawning of my baseball memory, I saw the
Joe DiMaggio, “the Yankee Clipper,” and
remember Yogi Berra. I saw a slightly
older Jackie Robinson play for Brooklyn.
Whether Minnie Minoso or Mickey
Mantle, it was ability alone that counted.
What could be cooler than Willie Mays, the
“Say Hey Kid,” making a catch in
centerfield? It took a man of exceptional
character and athletic ability to break
through that 1947 mind. Baseball is
business and the Dodgers had only one
pennant in 25 years. Rookie of the year
Robinson not only got them to the World
Series but helped create a dynasty.
Tax day is usually on the 15th, but is not
gone until your return is accepted. My wife
and I sent them more money than we ever
dreamed we would earn. Baseball players
probably feel that way, too. Jackie earned
$5,000 in 1947, double what my new
college graduate father earned that year.
Today, Illinois chases ballplayers down
to make sure they pay their fair share of
taxes earned on every swing of the bat at
Wrigley or U.S. Cellular fields.
American tax policy has been
progressive. Those with higher incomes not
only pay more but also a higher percentage
of their incomes.
The high-tax era began with World War
II. The “Victory Tax” raised rates from a
1942 maximum of 5 percent to 88 percent in
1943. In government there is never a lack
of ideas on how to spend the money of
others so we never looked back. By 1980
the corporate tax stood at 48 percent and the
personal at a maximum of 70 percent.
Today, even after the Bush tax cuts,
rates are at seven times the pre-war high, or
35 percent. The price of civilization!
C
SECTION
TUESDAY
May 1, 2007
Since 1981 tax rates have been
progressively lowered. The result has been a
far more progressive system. Those at the
top are paying more than ever. In 1980 those
in the top 10 percent (often characterized as
“the rich”) paid 48 percent of income taxes.
Today (2004 is the latest complete date), that
top group pays 70 percent. The top 1 percent
(certainly the rich) bear a full 37 percent of
the federal income tax burden.
At the other end, “middle class tax relief:
has long been a popular cry. Congress,
though, has almost run out of room to lower
taxes. The bottom 40 percent of filers pay
nothing whatsoever and the middle (40th to
60th percentile) pay 1 percent. This means 99
percent of the income tax burden is born by
the top 40 percent of filers. That sounds
progressive to this business professor.
Where do we go from here? The free
market-work hard-invest-take risk policies of
the last 25 years have created great wealth,
but more inequality than in a heavily
regulated high tax economy.
There are two bottom line questions. Do
we want to trade this dynamic America for
more equality?
Next, let’s forget fairness.
Should we decide that those rich people in the
top 10 percent should pay not just 70 percent
but 95 percent or possibly the whole thing?
Do we lower selective tax rates to stimulate
incentive – or squeeze money – out of them
with the higher tax rates of old?
The bell is about to ring,
so we can’t answer that question today.
When the ides of April roll around again
perhaps you’ll have an answer – or at least
remember what we talked about. If so, I have
done my job.
Carson Varner is a professor of finance,
insurance and law at Illinois State University.