taxes

Taxes

Let me start out from the beginning and say that I’m not against paying taxes.  Paying taxes is one of the means that the citizens can come together to provide things that we need such as: roads, armies, water treatment and distribution systems, schools and a host of other benefits that we take for granted.  It’s the job of the government to collect and distribute the proceeds appropriately.  One of the problems comes with using the word appropriately because what’s appropriate to one may not be appropriate to another.  Other problems exist because of the means of collection.

I can remember my first paycheck.  It was to be a pitiful thing even for it’s time.  I had to work nearly two weeks before I could collect it and I was looking forward to the seventy odd dollars that I had coming.  I only earned a dollar and five cents an hour.  I was floored, flabbergasted when I got it and it was missing a considerable chunk of my hard earned money.  There were all kinds of deductions: federal income tax, state income tax and city income tax.  That’s right even the city got into the picture.  I was incensed; they hadn’t even asked my permission.  Up until then I had been quite a businessman baby sitting, cutting grass and shoveling snow in the winter.  I had a small list of customers who liked my work and my rates.  The problem was that I was spoiled because I didn’t have to share these hard earned dollars with anybody so it was disheartening when I saw how much these crooks took without my permission.  But, true to human nature when there is nothing that can be done about the situation I soon settled into a uneasy coexistence with the government crooks and the yearly cycle of settling accounts with them.

Now that the income tax season is over it’s time to breath a sigh of relief.  Or is it?  In reality there is no relief from taxes.  There are income taxes, property taxes, excise taxes, sales taxes, corporate taxes, ad valorem taxes, capital gains taxes, import and export duties, gas taxes, cigarette taxes, 911 taxes, social security taxes, medicaid taxes, death taxes, inheritance taxes, liquor taxes and a host of fees that we pay so we cam  use our own common  property.   I don’t have a problem with many of these taxes because there are righteous ways for me to avoid having to pay them if I need to.  But, there are some that are grievous and immoral and somehow we free Americans got conned into accepting them. 

To me an appropriate tax is one that doesn’t specifically name me as a tax payer although there is one notable exception to this and I’ll talk about that later.  These are taxes collected at the time of sale.  I can avoid these by simply not buying anything if I can’t afford the tax.  Most of us can afford to pay these taxes because we do it every time we go to the checkout.   I don’t even have a problem with most of the fees that we have to pay to use our own common properties like the state parks and highways that we pay to use through drivers licence fees and other similar taxes.  But, I do have a problem with taxes that specifically name me as a payer like income taxes and property taxes.  They have my name on them and if I don’t or can’t pay them I may stand to lose my property or freedom. 

Let me start with what I consider to be the most immoral and evil tax ever foisted onto the tax paying public: Property taxes that are specifically levied against real estate.  These property taxes are levied to supply revenue for schools.    What’s wrong with it?  Fail to pay it and you’ll find out.  You’ll find yourself without a home or a place to stay whether it’s in a house, grass hut or a tent.  This grievous thing, getting kicked off of your land because you failed to pay a tax, is criminal and evil.  How can we possibly consider this to be a truly free country when we don’t have a right to live on the land we bought until the day we die regardless of our ability to pay a tax?   In truth we no longer own the land, the government does and it merely rents it to us year by year.   If we don’t pay these taxes the government confiscates the land and sells(rents) it at auction on the court house steps to the highest bidder which is usually way below the real value of the land.  I realize that we can’t take the land with us when we die but, that’s not the issue: it’s the right to live on our land until we die that is the issue.  There might not be so many homeless people if not for this grievous tax.  And, of all the taxes, it’s this one that keeps us dependent on the system; it keeps us working and I’ll go over this later.

It’s these types of taxes that hurt the poorest of us the most.  All taxes are a burden to the poor but, a tax that can be used to take away your home or land is the worst.  Everybody has to pay taxes, even the poor.

The next evil tax is an income tax.  On the surface this type of tax may seem fair because it’s graduated according to income.  Here again, this tax is evil for the reason that a name is associated with it.  There are all kind of things that happen when you’re unable to pay your full share: levies, fines, interest, garnishments and possibly imprisonment.  You could possibly avoid paying these taxes if you don’t have an income but, the system is rigged so that you have to have an income.   But, many look at it this way: you earned the money so you have to be disciplined to pay the tax.  This is certainly true but, is it right?  Income taxes don’t take into account the cost due to inflation or hardship.  Take higher gas prices for instance.  Many people haven’t gotten raises in several years because the economy is in trouble and businesses are hard put to stay in business just maintaining what they already pay.  So, when the gas prices go up there is no corresponding reduction in the amount of tax a person has to pay from their remaining wage.  Most poor people who pay income tax do so on their gross income and not an after expense income.  What happens if the roof goes bad on your rented house (remember we all pay rent to the king) and you need to fix it with high priced inflated shingles?  Is there a change in the tax rate to help?  No, that’s your problem.  But, what if you get a windfall in income and you find yourself still in the same position: the money is needed for some good reason like to feed, house and clothe your family.  You may find yourself in trouble because now you have to pay income tax on money that didn’t have withholding taxes taken out of.  Why, you may even find yourself in a higher tax bracket which could create an even greater hardship.  

Capital gains taxes.  What happens if you work hard and improve the value of your property or your property merely looks as if it’s more valuable due to inflation?  Nothing as far as the capital gains tax is concerned; not until you decide to sell it for any reason.  The politicians love to play with this tax.  The rates constantly change from one administration to the next.  Sometimes the tax rate is reduced substantially but, it never does go away.  If you liquidate your property you have one year to reinvest it into real estate or you have to pay the tax on the increase in inflated value.  But, what if you have to pay a debt and can’t reinvest and you find yourself without enough money to pay the tax?  What happens then?  I don’t know but, I’m sure it’s not pleasant.  Here again this is a tax associated with your name because you own the real estate( but not really, you’re only a renter).

I could go on and write about other personal taxes but, I think you get the picture about them but, there is one other grievous evil tax I want to write about: corporate taxes. 

Why are these evil?  Simply because corporations don’t pay them.  Why not?  A little bit of education in business is needed here.   This is very simple and I believe that you will understand this.  In some respects a business is no different than a common person.  The common person cannot spend more money than they have for very long or they will go bankrupt and corporations are no different in that respect.  Here’s where the difference between individuals and corporations are concerned: when a corporation is charged a tax they have to pass that cost onto the consumer by building that cost into the price of their goods or services and it’s the consumer who pays for those goods and services and as the end consumer I have nowhere to pass the cost of my taxes on to.  The bad thing about this is that there is no way to know how much of the cost of providing those goods and services are actually corporate taxes.  And by the way, the matching social security tax that corporations pass onto the consumer is about six point three percent of their employees gross wages and that has to be passed on or the corporation will eventually become bankrupt and go out of business.  But, here’s where the politicians get the last laugh: not only do we pay sales tax on those goods and services but we also pay sales tax on the built in corporate taxes.  Isn’t this a hoot: a tax on a tax?  The higher the corporate tax the higher the sales tax.  It’s for the reason that we don’t know how much we’re being indirectly taxed that makes it evil.  We can cry for higher corporate taxes but, in the end we’re just crying for ourselves to be taxed more and I know that all of us want to give more of our hard earned money to the politicians so that they can vote themselves a wage increase whenever they feel like it.  

Now I want to return to the subject of property taxes.   Someone once told me that certain taxes were created not for government revenue specifically but, to keep the people working.  In my opinion it is this tax that could accomplish this the best.  Everybody that lives pays this tax even those who are considered renters because they rent from a private landlord.  The private landlord is in business and has to pass those property taxes on to the renter in the form of rent or they stand to lose their property if they can’t pay them.  Those taxes cannot be directly paid by giving the tax collector free rent, a chicken, a tree or a tomato so those things have to be turned into currency so that it can be given to the tax collector.  The thing is that once you do that you now have an income that you have to pay even more taxes on.   You cannot routinely sell things unless you go into business and ninety five percent of us won’t go into business for ourselves.  The cost of doing business is staggering.  Businesses have to have employees even if you’re the only employee.  You need a place to do business from and usually some kind of equipment to buy and maintain.  Then there’s all of that bureaucratic red tape that takes one business day out of five to keep which includes paying all of those taxes for the consumers.  It’s hard enough to take care of your personal problems without adding business problems to the list so most of us opt to remain employees who are really the bulk of the people who buy goods and services in which all of these hidden taxes are built into.  In my opinion there is a fear that if this one tax, the property tax, was done away with that our bustling economy would revert to subsistence farming.   Without property taxes the burden of keeping the people working would fall to the income tax next.  The problem would be in defining what an income is.  Is the food you grow and eat actually income?  It would have to become that so that they could force you to pay your taxes in tomatoes or convert it to currency so that you could pay your taxes.   So, we are all inextricably linked into the system thanks to the property tax.  There is no way to get out of paying this tax and no way to exist outside of the system.  

What’s the solution?  There may not be one short of revolution.   And most people are two ignorant about these things to even care.  Their focus is on surviving in the system as it is and they don’t have time to look for or the education to know that there might be a better way.  So most people probably wouldn’t support a political revolution let alone a military revolution and I don’t advocate a violent revolution. 

Our political system can easily support a request for a change if enough of us got up and spoke out against these evils.  All we have to do is vote those out who won’t change and keep voting people in until we do get the change we need.  But, what about this need to keep people working?  I’m sure that there would be a certain number of people who would find a life of subsistence farming preferable to being in the system but, most of us like our modern conveniences and wouldn’t trade that for anything in the world so we’ll stay in the system even if the taxes were collected by other more equitable means such as sales taxes.  

The reason that nothing will change short of a revolution is that there is a vested interest in keeping things the way they are.  Probably, most people don’t have a problem with the system and our politicians know how to navigate the system to their advantage the way it is.   Our politicians are afraid to discontinue all of these separate and somewhat hidden taxes because it would force them to be honest about what rate they tax us at.  We are one of the highest taxed people on the planet.  I have heard that some estimates say that as much as sixty percent of our income is taken in taxes.  That’s ok if we can survive off of the remaining forty percent but, at our politicians should at least be honest about it.  What would happen if you went to the checkout and had to pay a sixty percent sales tax?  Would the system collapse as people quit buying things or would the people demand a real accounting from their politicians?  

Sale tax revenues fluctuate to much with the economy and I think that is the reason politicians don’t find sales taxes as desirable as other taxes.  When’s the last time the government came to you and gave you a break on your property tax when you lost your job or had to take a pay cut?  It’s fixed by the value of your land and not to temporary dips in the economy; even if that economic dip lasts for ten years.  You certainly couldn’t expect those poor underpaid politicians and government employees, which includes teachers,  to take a pay cut could you?   After all, cycles of boom and bust seem to be a part of nature so why shouldn’t the wages of our politicians cycle with the cycle.  Give them a tiny fraction of a percent based on how well the economy functions as a base for their wage.  What kind of solutions or nightmares would our politicians create if their income kept pace with tax revenues?  Heavens forbid that they might actually come up with a real fix to these unacceptable taxes and then actually fix the economy the right way.  

But, actually, our politicians shouldn’t have a hand in controlling a free economy anyway.  Yes, worker safety should always be important and probably has to be watched over by our laws but, things like wage and price guarantees have no place in a free economy.   Wages and work conditions are as good or bad as the workers allow them to be.  Nobody can force a free man to work for a subsistence wage.  There are plenty of stories where workers banded together before there were labor unions to strike for better wages and working conditions and got what they wanted.  How does this tie in with taxes?  It doesn’t directly but, it has a bearing on tax revenues when politicians try to manipulate a free economy and fail because they don’t understand human nature or business.  Life wants to thrive and expand and will do so if left alone. 

Yes, things can get out of hand and usually do but stifling business only curtails innovation which leads to stagnation and death.  Our business are a witness to this and we the people see it.  Our businesses are fleeing to places that don’t have these artificial restraints.  Remember 9/11?  Remember all of the patriotism and the little American flags people flew?  How many of those flags were made in the good ole USA?  I couldn’t find any.  When’s the last time you looked at the label of the product you bought to see where it was made?  It’s getting harder to find products made in the USA by real US manufacturers.  People can’t afford real US products that are completely made in the US so they settle for things made in China even things grown in China.  

Those businesses that are forced, yes forced, out of the country give other countries an edge over us.  Our economic wealth, vitality and innovation is bleeding away with every company that relocates from our shores.  Our factories close down permanently and workers are forced to find scarce jobs.  KIA, a Korean auto maker, opened a plant in Georgia and there were forty or fifty thousand job applicants for less than a thousand positions.   Foreign corporations that invest here help but they aren’t the main driving force in our economy.  All of this trouble is a consequence of government medaling where they shouldn’t.  Our politicians think that the American taxpayer is a bottomless well and they’ve found countless ingenious ways of getting into our pockets. 

Here’s another side effect of heavy taxation: lowered birth rates.   How?   People can’t afford large families which leads them to abortion in the form of IUD’s, birth control pills and surgical and chemical abortions.  Then there is the lowered birth rate due to voluntary sterilization.  What a gun couldn’t do to curb population growth heavy taxation accomplished.  The birth rates of many Westernized countries have dropped below the level needed to maintain their populations and countries like Germany and France are facing a crisis because of it.  Even the United States is on the brink of negative native population growth.  The population gap is being filled by immigrants who are changing the ethnic make up of these nations.  Christian countries are becoming Islamic countries and the Muslims aren’t even having to fire any shots to bring this about.   As the native population grows old and fades away the people realize that they need new people to pay the taxes to keep their governments paying them to sit around and do nothing. 

More on this latter.

Katrael