Do you feel you are over-taxed? Pay your fair share? Think you pay enough but others more well-off need to pay more? Our system of taxation is without question the most insidious creation our government has ever conjured up. It is outright theft of private property which translates to stealing your liberty. Private property is a pillar of liberty. Without the ability to keep the fruits of your labors, you are not living in a free country. That’s right, America is not a free country. Not to the extent that we envision it. We may have more freedoms than other countries around the globe, but we gave up our liberty when the income tax was imposed.
Maybe you say I’m being overly dramatic. You can still go where you want, work where you want, buy what you want. These things are mostly true, albeit with more and more exceptions. For example, try to buy a 3.5 gallon toilet. The government has dictated that you will buy a 1.6 gallon low-flow toilet, like it or not. Those types of freedoms are merely being eroded away slowly. The income tax was an abrupt loss of liberty in an instant. The government is now entitled to a portion of your wealth simply because. They are then free to redistribute it how they see fit.
Most Americans hold the view that taxes are a necessary evil. They don’t mind a certain level of taxation as a trade-off for living in a civilized society. We need infrastructure such as good roads and bridges and the like. No fair-minded person disputes this. These things don’t magically appear and maintain themselves. The problem we have is determining what is fair for each person to pay. One would think that the fairest method would be applying the same tax for each individual. After all, you are only one person. You take up roughly the same amount of space on the planet as the next guy. You consume essentially the same amount of earth’s resources as well. Why not have an equal tax? Don’t we spend a lot of time passing laws and creating regulations to ensure each individual is treated equally? Fairness. No discrimination. It’s everywhere. Except in the tax laws.
If each American were taxed the exact same amount once they reach working age, would that be fair? Not in the eyes of your government. Thus we have the progressive income tax. The more you make, the more you pay. In fiscal year 2010, the federal government took in about $1.06 trillion in personal income taxes. There were approximately 150 million individual returns filed last year. About 205 million of the total U.S. population of 310 million are of working age. So, only about two-thirds of the population is of working age and of those, less than 75% filed an income tax return. The Tax Foundation reports that only 63% of Americans actually pay an income tax at all. Bottom line? Everybody that can work doesn’t and everybody that does work doesn’t pay an income tax.
The first thing most detractors of the 47% that pay no income tax usually point out is that these people do pay payroll taxes, sales taxes, property taxes, etc.. Taxes such as sales tax and property taxes don’t count because they are user fees and you are not obligated to buy the qualifying item. The payroll tax is something all wage earners do pay. It is, in fact, another version of a heinous tax. You have to pay your 6.2% withheld from your check. However, your employer also pays the same amount on your behalf. So, maybe the employer writes the check, but don’t you think they are able to pay you less in wages since they must account for this expense as well? It’s a hidden tax many don’t account for. Of course, if you’re self-employed you must pay the whole 12.4% yourself. The government took in $940 billion more in payroll taxes last year.
The corporate income tax is also a hidden tax. Hidden because you pay it and perhaps don’t realize it. It’s a well-known fact that corporations don’t pay income taxes. Any taxes assessed on them are simply passed on to you the consumer through higher prices. The federal government took in $222 billion last year in corporate taxes. Some have called for the suspension or elimination of this tax. This would equate to a tax cut for you. The corporation merely serves as the tax collector much as your employer does with your payroll tax. They are a middleman that just sees the tax pass through their accounting department. Oh, you also pay for their costs to collect and track these taxes in the same manner, through higher prices.
We have a system of taxation that is uneven, full of loopholes, credits, hidden taxes and other anomalies that only serve to ensure that some people make out and some get screwed. If you have the means to afford tax attorneys and accountants, you can drastically lower your tax burden. You can also benefit from it if your income is low enough. There are a whole litany of programs such as the earned income credit that push the progressive tax burden even higher up the scale. Those on the lower end say so what. Let the rich people pay, they can afford it. This becomes an ethical issue. What is it that allows anyone to think it’s acceptable that somebody else should have pay their tax burden? Personally, I don’t think Bill Gates owes me a penny, I don’t care how many billions he’s worth. I think most people would see things the same if there were a personal attachment to the tax system. If both you and the party you were being subsidized by were aware of each other, most people would think differently. As it is, the system is nameless and faceless. You just get a check from the government. Certainly lessens the guilt factor this way.
The logic behind all of this is no secret. Creating government dependency translates to votes for the party that provides it. The web of power brokers at the top keep getting richer regardless of the party in power or the state of the economy. They need the funneling of taxpayer dollars through the system to accomplish it. As per usual, the system was created under the guise of a crisis. The 16th Amendment that gave Congress the power to tax and created the income tax was passed in response to the cost of war. Is it coincidence that it was ratified in 1913, the same year that the Federal Reserve was created? Probably, but it is very ironic that the two events that have done more to steal our wealth and liberty happened together.
The tax issue is front and center due to the Bush tax cuts expiring at the end of the year. There are hard statistics behind the logic that higher tax rates result in lower tax collections. It’s a predictable human response. Confiscate more of my wealth through taxation and I spend less, I invest less, I try to save more and the result is the opposite of what was intended. The Democrats in power know this. Politics may force them to back down from their stance of allowing all of the tax cuts to expire. The GOP won’t have the House yet when they expire, so that doesn’t factor in. Even if they cave and keep them intact for all brackets, they won’t do it permanently. This won’t instill the confidence needed by investors and businesses to hire more employees if they aren’t sure that we won’t be right back here in a year or two.
All of the issues we are facing as a country are coming down to one solution. We the people are going to have to be more involved, more vigilant and to force the issue. We have already seen that despite the GOP landslide in the mid-terms, Obama still isn’t listening. Congress is now going into gridlock for two years. The presidential election campaign for 2012 is essentially already underway. Both parties will only be making moves to improve their positioning for 2012. In other words, its politics as usual and we the people get left out of the equation. We are demanding action to solve our problems and our representatives are simply trying to retain power. They don’t mesh well.
If you’re looking for solutions from either party, you will be sorely disappointed. Neither one has the cojones to do the heavy lifting required to actually solve our problems. Their self-preservation instinct kicks in when presented with nothing but unpopular choices. The fact is that we the people will have to bear the burden of the solution. It will be tremendously painful for a great many Americans. It won’t happen quickly. Honestly, would you take the job if you knew you would be reviled and scorned? You’ll have to reduce benefits. You’ll have to eliminate programs entirely. Entitlements that Americans have come to depend on everyday. You’ll have to anchor down the economy for years to reduce the debt. And most of all, you’ll have to sell it to the American people that it’s the only way. And all the while, your political opponents will be eating you for lunch pointing out how heartless you are. The job doesn’t pay that well.
We need a revolution. Peaceable, if possible. Only that level of drastic action will result in repealing Amendments and eliminating the Federal Reserve. Our politicians need to see that there is no alternative. That is what will remove the re-election concerns. They must see no other way, no choices to make. The ballot box and party flip-flopping won’t ever rise to that level. Much like a casino has the odds built-in to be in their favor, so do the laws of the land favor those in power. We simply fight amongst ourselves to decide who gets the honor of screwing us over next. That kind of power won’t be given up, it must be taken away.