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I Say Let The Tax Man Cometh

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As the old saying goes, "in the world nothing can be said to be certain except death and taxes."

While that statement is absurd in the fact that we all know it leaves out too many other certainties in life, it is nonetheless true. And a clever point made by Ben Franklin, one of our Founding Fathers, in regard to taxes that I believe many people just don't understand.

Taxes are charges or levies placed upon citizens of this country in support of the government. In modern times, these payments extracted by the respective legislative body — be it local, state, or federal — come in monetary form. They are mandatory allotments set by the respective governing authority in order to pay for a variety of necessary functions and services such as war expenditures, maintaing law and order, aiding welfare or unemployment, or helping with public works.

The government imposes these taxes on the products we purchase, on the land we own, and even on the income we earn. And while nobody gets excited or is happy to see the government take a portion of anything we personally have earned, it is one we not only have to pay — but one we should pay.

All across our country there are people screaming to abolish taxes and for the government to basically get out of their affairs. Many of these protestors have banded together and have joined organized events called Tea Parties.

While it is inherent human nature to rise up and defend what is ours — in this case our money — it is important to remember that the funds in our bank accounts are only there because of the free economic system that our government established. It is also the services and programs it runs that protect and safeguard that capital for us.

All over the television, Internet, and radio at these so-called Tea Parties, I hear and see generic, ridiculous statements like "No Big Government," "Hands Off My Piggy Bank Uncle Sam," and the worst one, and unfortunately a common one,"Just Say No To Taxes!"

If the statements weren't made with such acrimony and the signs not waved around with such angered intensity, they'd actually be comical. In all honesty, many are actually protesting the fact that Obama is in the White House, not taxes at all, because none of these same folks were complaining when Bush was in office and passing his own version of a stimulus bailout package.

There are people who are peacefully protesting a potential rise in the current federal tax rate by publicly displaying their opposition to more federal spending. Yet, it is baffling to see the number of folks at these demonstrations who scream and yell for the government to completely go away.

Just say no to taxes? It sure sounds great on the surface, but do the folks holding these signs really comprehend what they are asking for? Unless they have a comprehensive plan to overhaul the American system with another revenue source, my guess is no.

I know we live in the land of the free, but if we "the people" are not going to pay any taxes, we will soon be living in the land of the free rein. That means we will all be free to do whatever we want, including rob, cheat, steal, and murder our way to a "better" life. Basically, return to our caveman days or a post-apocalyptic scenario like the one in the movie The Postman. (And trust me, that was a bad movie and it would be even a worst scenario!)

To put it in more realistic, basic terms, without taxes who will fix the roads we drive on everyday? Who will deliver clean drinkable water to our houses, provide affordable education for our children, or even pay for our soldiers to protect this country we all love so much?

It is understandable to want to keep taxes down as much as possible and protect what we've earned. After all, we all personally worked for that money and it seems to get harder and harder to stay ahead of our mounting monthly expenses.

Instead of screaming, however, simple and generic comments that we believe are clever, but in reality make no sense in the economical free market our Founding Fathers created, wouldn't it be better to stand up and fight for where that tax money goes?

In all this shouting and anger over taxes, I don't hear or see anybody actually demanding a break down of where their taxes go. No where do I see folks complaining about specific governmental programs or functions that our "donations" go to fund (aside from the aforementioned general animosity toward more bail-out money).

Poverty, peace keeping, environmental protection, law and order, welfare, deficit, transportation, space exploration – these are factors we all love and care about. Thus, let's make sure the money we fairly and rightfully owe go to the best use possible, instead of just complaining about owing anything in the first place.

About BizarroGuy

  • http://www.republicofdave.com Dave Nalle

    It’s remarkable that when you are so uninformed you would have the temerity to write an article like this.

    First off, the US has not historically been taxed at anything like the level of taxation we have today. While there have been periods when income tax rates were higher, those high rates were limited only to the highest income groups and came at times when state taxes were minuscule so that the overall tax burden was much lower. Today we face a total tax burden for every citizen as high as any country in the world and next year our taxes will be higher than every country including Japan. To have such a high tax rate with a government which uses that money so inefficiently and wastefully is certainly reason to protest.

    Second, your supposition that the government somehow created the economy is ridiculous. Although Obama seems bent on making most jobs government jobs, the truth is that the economy does far better without a great deal of government interference and (worst of all) government management, and it preexisted our current government and will outlast it if Obama doesn’t manage to totally destroy all commerce in this country.

    Third, you’re wrong about the Tea Parties in a number of ways. They were, in fact, protesting Bush over many of the same issues. The first Tea Party was in 2007, three years before Obama took office. They are not just protesting over taxes. As much or more of the focus of the protests is on the increasing degradation of our constitutionally protected civil rights by government. A

    Finally, you should take some time to read the novel that The Postman was based on, since the basic message of self-reliance and individual responsibility in the book does not come through well in the movie. The author, David Brin, is a notorious liberal, but even he understands that in a post-apocalyptic scenario it is possible for individuals to restore civilization and provide needed services when government has failed.

    Most of the things which you claim that only government can do, can be done by the private sector and done better, or if done by government can be done most effectively on the state and local level where citizens have more of a voice in how government runs. The giant power-grab by the federal government which you seem happy to cheerlead for is reducing our rights, taking away jobs and driving us all into poverty.

    Dave

  • http://joannehuspek.wordpress.com Joanne Huspek

    I have no problem with PAYING taxes. What I have a problem with is the corruption and greed in our government, the pay-offs and frivolous spending, the fat cat politicians who are less about public service and more about padding their wallets. I wouldn’t pay $100 for a hammer, so why should the government? I don’t have a fluffy retirement looming in my future, so why should we have to pay for private planes and limos, Wagyu beef dinners and 100K worth of flowers for the House of Representatives? And I’m not just talking national, it has to start locally. I see almost every week a new revelation about how almost bankrupt Detroit Public Schools paid a million dollars for artwork and 2.5 for some sort of health class that never occurred.

    Times are tough and they’re not getting any easier. It’s time for government to buckle down and bite the bullet like the rest of us slobs on Main Street.

  • Jordan Richardson

    Today we face a total tax burden for every citizen as high as any country in the world and next year our taxes will be higher than every country including Japan.

    That’s a pretty vague statement, Dave, and you know it.

    First, what do you mean by “total tax burden?” Do you mean individual tax rate or something else?

    There are countless countries with much higher individual tax rates than the United States and they’ll stay that way for far longer than a year. They include Austria, Barbados, Belgium, Croatia, Denmark, Ireland, Netherlands, Norway, United Kingdom, etc.

    Of course, that’s just based on a quick glance at individual tax rates comparisons by country. I’ve used the minimum/maximum tax rates by comparison, too, comparing the highest marginal tax rates per individual with the highest marginal tax rates per individual in the U.S. I used statistics from Wikipedia’s table on “tax rates around the world,” too, so it’s bound to have some errors. Still, that’s the price you pay for trying to refute vague claims on a complex issue such as taxation. Saying “god, we’re taxed as much as _____” takes some doing.

    By the way, one fact that is clear is that the United States boasts one of the lower corporate tax rates in the developed world.

    And with so many Americans getting tax cuts over the next while, I struggle to see how Dave thinks taxes are going to go up.

    But he knows a lot more about this matter than I do, so I’m hoping he can provide some clarity.

  • Glenn Contrarian

    Bizarro –

    Very, very good article. And of course you got immediate responses from those who complain about how incredibly high the taxes are, yet they never, ever stop to wonder why it is that ALL first-world industrialized countries (with the exceptions of the oil-rich Middle East) pay high taxes…while those who pay very low taxes (again, outside the oil-rich MIddle East) are ALL third-world countries.

    This doesn’t mean that high taxes automatically result in a prosperous country. It DOES mean that a non-oil-rich country cannot become a first-world modern industrialized nation without a significant tax burden on the people.

    In other words, high taxes are the price of admission for living in a first-world industrialized democracy.

    But you know what? The conservatives’ complaints about taxes are simply a meme. That’s not what they’re really mad about. What they ARE mad about is that they’re not the ones in power. Their complaints about taxes are simply a means to an end.

  • http://www.republicofdave.com Dave Nalle

    First, what do you mean by “total tax burden?” Do you mean individual tax rate or something else?

    The total amount of an individual’s earnings which go to the government when all is said and done.

    There are countless countries with much higher individual tax rates than the United States and they’ll stay that way for far longer than a year. They include Austria, Barbados, Belgium, Croatia, Denmark, Ireland, Netherlands, Norway, United Kingdom, etc.

    You’re not including state, local and property and sales taxes in that. When you factor them in then the US is currently about tied with France and lower only than Japan. After Obama increases rates and various fees we will pass Japan.

    The other countries you mention all have a single, central taxing authority while in the US we pay taxes to dozens of entities one way or another every year.

    By the way, one fact that is clear is that the United States boasts one of the lower corporate tax rates in the developed world.

    Also not true. You should look at the actual numbers. European countries have been lowering corporate taxes and we now have one of the highest rates in the developed world.

    And with so many Americans getting tax cuts over the next while, I struggle to see how Dave thinks taxes are going to go up.

    There are no tax cuts. It’s a myth. All that’s been done is change the tax structure so that your taxes are paid on bases other than just the gross marginal rate. It’s an illusion. And meanwhile new taxes are coming in energy and health care which will crush the average consumer.

    Dave

  • http://handyfilm.blogspot.com handyguy

    Dave, there were both one-time and permanent tax cuts and tax breaks for businesses, including small businesses, in the stimulus bill, the health bill and a couple of jobs bills over the last 15 months. The individual and business tax cuts/breaks in the stimulus bill alone totaled $300 billion over two years.

    Do you always have to present everything in such a one-sided manner? Of course you’re not going to agree with the policies of liberal Democrats, but when they do cut taxes you refuse to acknowledge it because it messes up your neat, utterly simplistic little propaganda storyline.

    The government will continue to use tax policy to incentivize certain behavior by individuals and businesses. But it does that by lowering taxes as well as raising them.It’s propaganda to insist that that exclusively means tax increases for everybody, all the time. Even the most progressive Dem knows that is politically suicidal.

    Have you decided to completely exit the arena of fair, factual discussion of anything? It’s all advocacy, all the time now?

  • http://handyfilm.blogspot.com handyguy

    Here’s a partial list of some of the larger tax breaks for individuals and businesses from the stimulus [ARRA] bill alone.

    A tax credit for first-time homebuyers increases from $7500 to $8000, and will not have to be repaid
    $6.6 billion

    Businesses will be able to more quickly deduct the cost of investments in plant and equipment from their taxable income
    $5 billion

    30% cap on tax credit for energy efficiency purchases by homeowners, up to $1500 per residence
    $2 billion

    Tax credit for plug-in electric vehicle conversion
    $2 billion

    Taxpayers earning less than $125,000 can deduct sales and excise taxes paid on new cars
    $1.7 billion

    Companies will be allowed to defer taxes for five years on several transactions aimed at restructuring balance sheets, and repay the taxes over the following five years
    $1.6 billion

    Facilities making advanced energy property may be able to claim a new 30% investment tax credit
    $1.6 billion

    Businesses will be allowed to recover alternative minimum tax and research and development credits faster
    $805 million

    Unprofitable small businesses with annual receipts of less than $15 million can recoup taxes paid in the past five years, up from two
    $947 million

    Small businesses will be able to exclude 75% of the gain from the sale of some stock held more than five years
    $829 million

    Removal of cap on tax credits for purchase of small wind systems
    $604 million

  • Glenn Contrarian

    Dave –

    European countries have been lowering corporate taxes and we now have one of the highest rates in the developed world.

    Yes, we have one of the highest corporate tax rates in the world, but what you’re choosing to forget is that AFTER tax breaks and deductions are taken out, we’ve got the second LOWEST corporate tax in the industrialized world.

    That’s why Exxon-Mobil and GE (and the majority of all other American corporations) didn’t pay any American taxes AT ALL last year…but they did to other countries. Did you really think we weren’t paying attention, that we’d take your word as the be-all and end-all?

    No. “By their works shall ye know them.” I see your rhetoric…and your rhetoric doesn’t match up with the FACTS.

    We’re not stupid, Dave. Don’t pretend we are by posting throwaway memes that are so easily disprovable.

  • John Wilson

    Business tax cuts don’t produce jobs. We live in a consumer society, not a producer economy. The pace and direction of our economy are set by consumers, not producers. This has been true for many years. The way to stimulate our economy is to enrich consumers.

    Modern businesses are run with short inventories and facile capital investment: machinery is readily leased on a demand basis so long term amortization is not an issue for most producers. The steady increase of sub-contractor proficiency alleviates most end-product producers of most of their longterm capital investment.

    If you were a producer and got a windfall, say a tax benefit, would you open new plants and hire people in this economy? Not likely. You’d maybe bank the money or pursue a Merger or Acquisition, each of which reduces employment.

    To stimulate our consumer economy you need to direct monies at consumers, and the most efficient stimulus consumers are the lowest paid people because they retain very little discretionary money.

  • http://handyfilm.blogspot.com handyguy

    Pres. Obama has offered to discuss lowering corporate tax rates if he can also get rid of the numerous and massive loopholes that make the effective tax rate much lower. The GOP wouldn’t bite.

  • http://handyfilm.blogspot.com handyguy

    Another factoid:

    Currently, just 12 cents out of every federal dollar comes from corporate tax revenue, while “corporate income tax as a share of gross domestic product has fallen from 6% in 1951 to about 2%” in 2008. According to data compiled by the Organisation for Economic Co-operation and Development (OECD), the U.S. raises less in corporate tax revenue as a percentage of GDP than many industrialized nations, including Canada, Japan, Australia, and the United Kingdom.

  • Glenn Contrarian

    …and after the previous buttload of facts about America’s taxes, the answer of the conservatives and Tea Party crowd is…

    …silence…

    Why? Because it’s far more palatable (and requires less courage) than admitting that they were wrong.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    “The way to stimulate our economy is to enrich consumers.”

    That may be so; but it doesn’t say much for our economy anymore if consumption is our only ticket.

    And how do you propose to enrich the consumers, John, with productivity gone?

    Looks like a vicious circle – thanks to the American brand of capitalism.

  • http://www.republicofdave.com Dave Nalle

    Ok, Handy, you list the minuscule and largely illusory tax cuts and I’ll list the tax increases in the health care bill. Then you’re welcome to do the math.

    Individual Mandate Excise Tax
    Anyone not buying “qualifying” health insurance must pay an income surtax equal to the higher of the following:

    Single: $495/0.5% of AGI
    Couple: $990/0.5% of AGI
    Family: $1485/0.5% of AGI

    Then after a year the AGI percentage goes up to a full 1% and after 3 years it goes up to a full 2%.

    Employer Mandate Tax
    If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $750 for all full-time employees. Applies to all employers with 50 or more employees. CBO estimates total revenue of $39 billion from this mandate between 2010 and 2019

    Excise Tax on Comprehensive Health Insurance Plans
    This is the penalty on “Cadillac Plans) with premiums as low as $8500 per year, taxing them at an additional 40%

    Medicare Payroll Tax
    Increases tax from 1.45% to 2.35%. and from 2.9% for the self-employed to 3.9% for the self-employed.

    Health Savings Accounts
    Tax rate on withdrawals from HSAs goes from 10% to 20%. No new deposits in HSAs allowed.

    Flexible Spending Accounts
    These tax exempt accounts used to pay for education and treatment for special needs kids will be capped at $2500 (almost useless)

    Medical Device Manufacturers Tax
    Raises $2 billion a year from additional taxes on select medical devices.

    Tanning Tax
    10% tax on indoor tanning salons. Frighteningly expected to raise almost $3 billion a year.

    Blue Cross/Blue Shield Tax
    Many BC/BS users would lose a current tax exemption.

    Charitable HospitalsTax on Innovator Drug Companies
    A special tax on companies selling new drugs at premium prices, bringing in $2.3 billion per year, which will of course add even more to the price of those drugs.

    Tax on Health Insurers
    $10 billion yearly in new taxes on health insurance premiums collected by private insurers, targeting most profitable companies.

    There are some other associated costs and minor tax increases. There’s also the ridiculous fill out a 1099 for everything rule which will have enormous administrative costs for every business.

    As I read it, these taxes add up to enormously more than your cuts. But hell, it’s all just sunshine and roses in Obamaland.

  • Cannonshop

    I can count four of those that are going to hit IAM affiliated workers directly- Boeing Traditional is a Blue Cross/Blue Shield plan, HSA’s were offered as alternatives in the last two contracts we negotiated/voted for, the ‘Cadillac Plan’ tax definitely applies to all Union-represented Boeing Employees…okay, that’s just three, the others are ‘indirect’ costs.

    Wait…there’s the Health Insurers tax, which hits the OTHER alternative plan offered under the IAM negotiated contract…

    and taht’s not even looking at what it’s going to do to the Salaried/Management side of the house.

    This is going to make the NEXT contract negotiation…’fun’? There’s going to be layoffs, I predict, and a lot fewer call-backs, and they’ll probably outsource more, since they can out-source offshore and there’s even MORE reason to do so with this.

  • http://handyfilm.blogspot.com handyguy

    Dave’s list and mine make the same point: the government has used, is using, and will use tax policy — both increases and decreases — to incentivize behavior. Both conservative and liberal administrations have been doing this for decades.

    The difference is I think this is a valuable tool and I don’t see many of the items on Dave’s list as objectionable.

    And the items on my list, along with other smaller ones in the ARRA bill, add up to $300 billion. I’m not sure what makes them illusory, exactly. That’s just a word you like to throw around.

    Also, we should all watch carefully for the post-election recommendations of the bipartisan presidential commission on deficit reduction. I don’t think the recommendations or the White House’s follow-up will fit neatly into anyone’s ideological boxes. We may see real policy instead of gamesmanship.