Saturday, April 23, 2011

Income Tax Day

Income taxes were due in the U.S. on Monday. Few are happy about paying those taxes, and as unfair as they are as to who pays and how much, I can understand why. Mark Twain once said that, "The only difference between a taxman and a taxidermist is that the taxidermist leaves the skin." Twain makes a good point because in the United States income tax levies are one of the most unfair of all government programs. But the income tax is the single greatest source of revenue for the government, so it's not going to end in any lifetime. It could be called the biggest and most egregious entitlement of all because once it was levied it was destined to never be taken away.


Why is it so unfair? It's because less than half of Americans pay any income tax. They carry the burden for the others who do pay because they are labled as too "poor" to pay anything for the services they receive from government. It is of course a great big lie that they can not pay. Truth is, not so many decades ago, the rate of taxpayers to non taxpayers was 90% to 10%, not 50% to 50 %.

I don't think the smaller pool of taxpayers now is because of poverty. Some families with incomes of more than $70,000 a year are labeled as too poor to pay one cent of taxes. Rather, the shrinking pool of taxpayers and the ever larger responsibility of those who pay, to pay more, is because politicians love to get reelected to office. Lowering the threshold at which a person is required to pay the income tax makes those excused loyal to the politicians who provide the avenue for them to not pay.


That's why we hear the "tax the rich" cries so much. Yet more than 50% of all U.S. income taxes are paid by the top 10% of earners in America. It should expose the lie that the wealthy are not taxed enough and make the country face the real reality that too few people who are not wealthy are paying nothing. But it does not. There are so many deductions, exemptions and exclusions, provided by for politicians want to have us vote for them, that what we have wound up with today is one half of Americans paying for their government services they use.....and paying for the other freeloading one half's too.


Here are the reasons I think the American Federal income tax is undemocratic and should be abolished and replaced with a flat rate that is equal for every person in America.


1) It's too complex for any but the most clever accountants to understand. Filing taxes is like casting a fishing line in the ocean. You hope you are casting properly and fishing in the right area, but there is no way for you to know. Those who fish the right area (those who have great tax accountants) do well, while the rest pay an unfair amount. Taxes should be simple enough for even the least educated to understand.


2) The more productive a person is economically the more taxes he or she pays. Punishing those who create wealth should be the last objective of an income tax. Yet we reward the unproductive by excusing them from taxes (the most poor actually not only don't pay any tax, but receive a huge earned credit income check as a reward for not paying). Everyone should pay the same percent of taxes on his or her income.


3) It is unfair. The larger your family, the lower your income taxes. You are rewarded for having babies you cant afford to have. No wonder the poorest people here have far more children than those who are wealthier. For an example from this year's income tax payment rate take the case of a single man with no children who makes $60,000 and uses the standard income tax deduction. He'll owe $9,243 in federal income taxes. Compare that to a man with a wife and four small children earning $60,000. He will pay no federal income taxes. NOTHING! Uh...go forth and multiply to avoid paying taxes.


4) Finally, tax deductions and credits are offered for things that are deemed "good," for society. including charitable contributions or the costs of owning a home. But is it really the place of our government to try to encourage or discourage certain behaviors with monetary incentives and penalties? Of course not. Most of those deductions and credits are targeted at voters who will support the politicians who give them. That is their real purpose, to manipulate voters


It's nice to whine a little after writing those big income tax checks the other day. Maybe they will give me a whining deduction on next year's taxes.

No comments:

Post a Comment