A Taxing Problem

We hear a great deal about taxes:  Are they fair?  Rich people don’t pay enough. The middle class pays too much.  What about those who don’t pay anything?  This raises some questions for me:

* What is fair and who determines what’s fair?

* Should the wealthy pay a greater share?

* Are successful people really evil?

* Is our tax system efficient?

Fairness

Fair is a relative term.  Each of us judges fairness from the view of our own circumstances or self-interest.  If I stack old tires in my yard regardless of what the neighbors think, is that fair?  If I choose to illegally “jump the line” of immigration to get ahead of those going through the legal citizenship process, is that fair?  There are good laws to guide these types of behavior, but frankly common sense guides most people’s beliefs about fairness.

Who determines what is fair in America?  When government decides what is fair, do you think the politicians’ self-interest is involved?  By allowing government to determine what is fair, one person or group will be “favored” over another; the government picks the winners and losers.

We saw a politician who thought it was fair to sell a U.S. Senatorial seat to the highest bidder.  Former Illinois governor Rod Blagojevich is now in prison because that was NOT fair.

Let’s look at our current tax code. According to Heritage Foundation’s 2011 Budget Chart Book, “The top 1 percent of income earners paid 38 percent of all federal income taxes in 2008, while the bottom 50 percent paid only 3 percent. Forty-nine percent of U.S. households paid no federal income tax at all.”[1]  Does that seem fair to you?

If the goal were all Americans being “equally” taxed, then a flat tax would seem to make everything fair. There is actually no single, perfect or best way to tax. The point is our politicians find many fatally flawed ways to tax, and the tactics promoted by Democrats and Progressives are certain tickets to economic suicide.

Taxation of the Rich

Who are the rich, and who determines the line between rich and non-rich?  Is that the President’s call?

Why demonize the efforts of those who successfully create their own wealth and then spend their money in our economy? This is class warfare and our President, though he did not start it, is certainly escalating it.

American economic freedom is about people having an equal chance to succeed or fail without government choosing winners or bailing out losers.  That is freedom; it is intuitive and fair. Regardless of the tax code our country follows, starting a debate without terms like “rich” and “poor”, and without demonizing success is where we have to focus if we are to move toward economic freedom.

Are Successful People Evil?

It is unbelievable that we have a President who labels the wealthy as “evil,” saying they don’t care and don’t pay their fair share. To be sure, there are evil people both wealthy and not, but the viewpoint from the Oval office that successful people are evil – that they have ”enough” and their greed keeps them from giving away a greater portion in taxes – is just plain wrong.

I would offer that our federal government not having a budget for over 1,000 days and spending over $1.5 trillion per year beyond our means is the real problem.

Many great innovations and companies that produced jobs and shaped society have come from the wealthy. Steve Jobs, Bill Gates and Michael Dell are examples of hard-working, tax-paying people. They did not depend on government to make them wealthy or productive, and their foundations have given billions of dollars to helping others without the government telling them to do so.

Taxation Inefficiency

In USA Today, January 23, 2012, the president of the National Taxpayers Union, a non-profit, non-partisan group that works for limited government, wrote an article in the editorial section titled Opposing view: Americans aren’t undertaxed.

I found the statistics he used from the National Taxpayer Union’s Taxing Trend report amazing.  “Americans spend 7.64 billion hours complying with the tax code; the value of that time alone exceeds $227 billion.”[2]

UNBELIEVABLE!

If you convert the 7.64 billion hours into jobs, the math is simple.  Using 50 weeks of work at 40 hours per week would mean 3.82 million fulltime workers filling out forms for a year.[3]

Is the current taxation system a problem? Yes. The proposed budget for running the IRS in 2012 is $13.3 billion[4] for about 100,000 employees.  Now for a real shock: as of 2010 there are over 70,000 pages in the U.S. tax code compared to 400 pages in 1913.[5]

By comparison, the Lord gave Moses only 10 commandments.

Stop Washington’s Overspending

Who benefits from a bloated, loophole-ridden and complex tax system?  Follow the money and then follow the votes.

The President keeps telling “non-taxpayers” and “non-rich” that the rich people and big business are the problem.  He portrays himself as defender of the little guy; protector of the 50% who do not currently pay taxes.

We must look past Obama’s portrayal of good guys and bad guys, and focus on the real problem – our bloated and growing government in Washington. This President never ran a business, never had to “make payroll” for his employees, and apparently has no intention of balancing a budget or shrinking the size of Washington spending.

If we do not take the “checkbook” out of the President’s and politicians’ hands, our country’s taxing problem will be the least of our problems.