Monday, April 10, 2000

Week of 04/10/2000

Taxation Song And Dance
- by David Matthews 2

"There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him." - Robert Heinlein

Just about this time every year there is a little game that is played in America. It’s called the "Taxation Two-step".

Every year just around Tax Day, we have a general discussion about how we pay our taxes. Most Americans really have no idea how much they’re paying in taxes every year until it is time to file our tax report with the Internal Revenue Service.

Now I’m sure some of our international friends would like to know why that is. Why is it that the average taxpaying American has no idea of how much they pay in taxes until the following year?

Well, once upon a time, we KNEW how much we paid our taxes because we would have to figure it all out ourselves. When the federal income tax was first levied, it was up to us to pay it in its entirety. We would fill out the tax form, do the math, and then write out a check to the government for how much we owed them for the previous year. We still do something like that with local property taxes, which is why we are very sensitive over our property values, what the government assesses that value to be and what the millage rates are.

But then around World War II, the politicians had this brainstorm of an idea. They needed some fast cash to fund the war effort. They couldn’t wait until the following year to get the money, so they came up with the idea of having the employers take the tax percentage out of each worker’s paycheck and give it to the government. Employees wouldn’t have to worry about writing out a check to Uncle Sam every year because it would already be paid before they even see the paycheck. Nice idea, right?

Well, one of the side effects of that is that now people do not really know how much money is being taken out to pay Uncle Sam and his fifty spoiled brats. It’s taken out a bit at a time, long before we even see the money ourselves. So the only way we really know how much of our money is given to the government is when we have to report it.

This has also given government officials on all levels the chance to play games with our tax rates. Since taxpayers have no idea how much they owe the government until tax time, they usually never know when the government decides to take a little extra.

Did you know, for instance, that the government taxes you extra for every hour of overtime you put in at work? The excuse from those in government is that they don’t want people to get rich off of overtime. The more overtime you put in, even more taxes get taken out. But you wouldn’t know that unless you did the math yourself.

How about that refund check you got from last year’s taxes. Did you know that in some states you have to report that as extra income and pay taxes on it again? Surprise! You’re getting taxed on the same money twice! And it’s perfectly legal too. After all, the Fifth Amendment protects one from double jeopardy, but not double-taxation.

It’s a given that nobody likes to pay taxes. We look at government and find it to be incredibly inept at what it does. We’re not happy with how it is run, and we certainly aren’t happy with who is running it, no matter who that person or party is. So we feel they aren’t worth our hard-earned money.

However, while we feel that the politicians don’t deserve OUR hard-earned money, someone’s gotta foot the bill for all those government services we want. After all, how else would we pay for the police officers, and the court system, and the firefighters, and the street sweepers? These folks need to be paid for their services. They certainly don’t operate purely out of the goodness of their hearts.

So we believe taxes to be a necessary evil, one that we would avoid any chance we can get. But to pay for those services we do want, we feel other people should foot the bill. Not only that, but some people feel that they are paying a "disproportionate" amount of taxes, and that other people are getting away with not paying "their fair share."

It is that feeling of "unfairness" that gives politicians plenty of ammunition to further con the American people into paying even more taxes.

There are many ways that politicians con the American taxpayers. The first is the very notion that not everyone is paying "their fair share" of taxes.

Let’s get brutally honest here… NOBODY in America pays "their fair share" of taxes! Nobody. If you claim any kind of deduction, no matter if it is for yourself, your spouse, or for your children, you certainly are not paying your "fair share" of taxes. If you write off your home mortgage as a tax exemption, you are not paying your "fair share" of taxes. If you claim you are a full-time student, you certainly are not paying your "fair share" of taxes. Those examples alone show that a majority of Americans do not pay their "fair share" of taxes. It is safe to say, then, at some point in our lives we all will not pay our "fair share" of the tax burden.

The only way the tax system would ever be "fair" would be if everyone was paying an equal percentage of taxes. A straight flat tax. No exceptions. No exemptions. No deductions. It wouldn’t matter if you made $1000 a year, $10,000 a year, or $1,000,000 a year, you would still have to pay the same percentage of taxes. The more you make, the more you would still have to pay in taxes. You can get no fairer than that.

So unless you’re willing to abandon this punitive tax system and push for a pure flat tax, you have absolutely NO grounds whatsoever to talk about "tax fairness."

Of course, not too many people in government really want that kind of tax system. A flat tax system would mean less money for them to play around with. It would also eliminate a lot of incentives politicians use for special interest groups. How can small town America bring in businesses if they can’t offer them huge tax breaks?

That brings us to the next way our elected officials and their wannabes try to con the American public, with so-called "tax relief" games.

The game works like this: the people complain about taxes. The politicians shed their crocodile tears and promise to offer the public "tax relief." The "relief" won’t come from a tax cut, though. Instead, they’ll offer up a glorified IOU that they claim will be just as good as a tax cut. As a matter of fact, they often go so far as to call it a "tax cut" - even though it is nothing of the sort. You will still have to pay the same amount of taxes as you have been, but now when you file your tax report with the IRS, you can then claim this "tax credit" to be deducted off how much you were supposed to pay last year. Slick, huh? Your "relief" would not take effect for a whole year. A whole year for the government to play with your money, collecting the interest off of it, instead of giving it to you like they are supposed to. Worse yet, not everyone would be eligible for this "tax relief." Single adults, for instance, who don’t have children usually are not eligible for any such "tax relief", and thus have to shoulder most of the tax burden. For people who complain about those who do not pay "their fair share", what they offer is neither "relief" nor fair in any sense.

Then there is "tax-reform roulette" - the political version of the Three Card Monty. In this game, so-called "tax-reform" politicians offer up not one or two, but a whole bevy of tax reform bills for the general legislature to vote on. No doubt any of these bills probably would be a welcome relief for the public; and if decided upon alone, it would be political suicide for any politician to vote against them. But decided upon all together, in a marathon "tax-reform" spree, it is a sure bet that NONE of the bills would ever be passed. Each politician would support one or two of the bills, then vote against all the others, making sure that no bill gets a majority vote. That way, every politician can then go back to their constituents and tell them that they "tried" to do something about the tax system.

While we’re at it, don’t forget the other tax game that politicians love to play, the "taxation name game." Our highest elected con man, President Bill Clinton, loves to play this game because he gets to hide his socialistic drivel by bastardizing the English language. In this game, tax money is not "spent", but rather it is "invested." Clinton, for instance, would claim that the American public doesn’t need a tax cut, because, supposedly, he feels that the people would just spend that money, while he would "invest" it in programs he feels are in the public good. By playing the taxation name game, he can insult the American people while at the same time pretending to care about them.

And Clinton is not the only one who plays the taxation name game. This is an election year, after all. How many of our representatives and senators will be crowding the airwaves with talk about all of the federal funds they have "invested" in their state? All the while, they condemn the "investments" of their political associates as being "wasteful spending." Political pork by any other name is still spent just as quickly. Even the 2000 Census talks about those federal funds being "properly invested" if everyone turns in their forms, as if somehow the whole purpose of the census was to figure out how to spend tax money and not fulfilling a constitutional requirement.

Each of these con games have one purpose, of course: to keep the tax system as complicated and as convoluted as possible. To keep the tax preparers, tax accountants, and tax auditors employed. To keep the tax software on the shelves and in the computers where they belong. In short, those in government keep us confused and keep on deceiving us to maintain the status quo.

If we want real tax reform, then, we must be willing to see through the deceptions our elected officials give us. To see through the slick words of our so-called "reformers" and challenge them to actually deliver that which they promise, or to remove them when they fail to deliver. We must be willing to accept the fact that the only "fair" tax system is where everyone pays the same tax percentage, and that to accept our own exemptions is to allow other people to do the same.

The best way to stop a con man is to not act like an easy mark. The best way to stop a political con man is to stop playing the gullible fool.

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