11/26/2012 08:22 am ET Updated Jan 26, 2013

Under-Taxed Americans Face the Fiscal Cliff

As families and friends traveled and gathered together for Thanksgiving feasts last week I thought about this very American holiday, its religious and secular overtones, and its underlying message. It is, going back to the first Thanksgiving, a message of community and caring for one's neighbor. Without the help of the Native Americans, the Pilgrims would not have survived. This message seems particularly meaningful in the aftermath of Hurricane Sandy, a storm that continues to affect my family, neighbors and friends. The definition of community is particularly complicated in this era of mass global communication, trade and travel. Who should I care about? Who should I help and who should I expect help from should I ever need it? Some of the answers to this are unambiguous. Our first obligation is family, then neighbors and friends. But beyond that, it gets more complicated. Should people from Brooklyn help people living in Queens? Should New Yorkers help Texans? Should Americans assist Haitians?

And what is the role of government in serving as the voice and embodiment of our community? I will gladly give my neighbor a bottle of milk to feed her children, but what about taxes to my government to provide free meals at school for poor children? Over the past three decades there has been intense and serious questioning of the role of government in providing social welfare services and government's role in our daily lives. This has even been extended to questioning the role of government in providing services during emergencies. We worry about bumbling bureaucracies and the debilitating impact of entitlements on the work ethic. There are good reasons to raise these questions and to develop a definition of community and of the role of the public sector that fits our culture and our values.

But what we have ended up with in the United States does not really represent who we are and the role we expect government to play in supporting our community and civilization. While no one likes to pay taxes, we Americans are under-taxed. As we head toward the federal fiscal cliff I think it's time to think seriously about who we are and what we want to be. Are we really people who think it's OK to leave elderly people on the 10th floor of a Rockaway high-rise to freeze and starve? Do we think that government should not manage and subsidize an insurance program to enable people to rebuild their homes and communities after a natural or human made catastrophe? Are we the type of people who think that only wealthy people should receive health care when they are sick? Do we think it's OK to poison the planet so we can live well today and disregard the planet we leave to our children? (or as Robert Heilbroner once wrote, "What has posterity ever done for me?")

I know a different America than that one. And I think it is time to call out the greedy and selfish people who think that taxes kill jobs rather than provide the resources needed to support our communities. I am a public management professor. I know it is important to improve the effectiveness and efficiency of public management. I have been working on that problem for three decades, and would never pretend that every tax dollar collected is well spent. But the private sector is not immune from mismanagement. Even the best companies stumble. Check out the map on your iPhone 5 if you think the private sector is perfect. But government is what we do together. It is how the community I live in is connected to the one you live in. It is how we help each other and build shared resources.

I do not doubt the power of the market and the benefits of capitalism. But the market cannot and should not do everything. Government must organize and help finance our security and our infrastructure: the roads, schools, libraries, mass transit, sewage and water treatment, waste management facilities, air and sea ports, and energy utilities we rely on. Today, in the United States, we are unable to fund the modernization of these facilities, because we refuse to generate the revenues needed to pay for them.

Then there are the "entitlements." We have "reformed" welfare, so there's no more cutting to be done there. These days, when the politicos talk about "entitlement reform" they are talking about cutting Medicaid, Medicare and Social Security. Due to modern health technology the average American leads a longer and healthier life than those who came before us. The cost of health care is going up along with the quality of health care outcomes. Health care costs more in part because it does more. Today we often survive the same sicknesses that would have killed us a generation ago. That technology is not cost-free. But what should we do? Only provide health care for the wealthy?

Somehow we are expected to "cut" the costs of health and retirement benefits without harming old people and poor people. While it often goes unspoken, the other alternative is to provide more rather than less revenues for health care while working to make health care more efficient and cost-effective. That would require better management but it would also require that we increase rather than decrease our taxes.

What I find troubling about the discussion of fiscal cliffs, tax policy and "entitlements" is that it is divorced from its underlying impact on our community and values. Taxation is presented as oppression and thievery by an unseen enemy rather than as a means of funding the costs required for a vibrant community. The idea that we are under-taxed cannot reach the political agenda. The issue of taxation has been divorced from the need to pay the real costs of funding community facilities and services. It's true that raising income taxes on working Americans is a bad idea during a recession. But there are lots of ways to raise revenues now and over the long-term to close the deficit, stimulate the economy and fund community needs. Instead of a realistic discussion of trade-offs and costs and benefits we are mired in symbolic politics and ideological nonsense.

If President Obama's reelection means anything at all, it is that a majority of Americans decided we are all in this together and we are still interested in building a real community. Government need not be a beast to starve, but a means to build and maintain the institutions, services and facilities that we all can share. Schools, transit, energy, water, waste management, parks, and security are most cost-effective when they are public rather than private goods. An under-taxed citizenry must choose among essential services that should all be public. While private schools, private jets, private electric generators and private gated estates can allow the rich to create an alternative universe to the one the rest of us live in, that is not the America I grew up in and it is not the America I want to leave to my children.