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Thursday, August 12, 2010

AH-HA on Taxes- A Beginning

Since I am absolutely pumped about running for office, and having done my fair disclosure-ing for the time being (oh, I will apprehend more sins to disclose as soon as it is cool enough to swing and cogitate on the porch without broiling any brain cells, can’t spare even one), I thought I would let float some of the planks in my platform. I guess politicians still have platforms with planks but am not sure as few of those boys and girls actually answer a question directly, or at least when I am watching, they do not.

Let me wrestle, today, with taxes. Neither of our two political parties is to be believed about any issue domestic or foreign, but when it comes to the topic of taxes, all you need to know is that whichever bunch can make political hay to stay wedged in office by moaning and lying and obfuscating about taxes will do just that. I am going on record right now as being of the mind that we have to pay taxes, period. I have yet to find a way to have anything without paying for it, except for the free tomatoes I got today from my friend George, expert tomato grower. I also believe that any reasonable person who will separate herself from the moraine of politico-speak will agree that taxes are necessary. The real problem with the topic is that none of us really knows if we are spending too much on taxes or not enough. To enlighten us what we really need is an honest, careful analysis of just how much actual taxes people and corporations pay and if the amounts and rates are fair and necessary. Let’s take folks like you and me, I will call us just-folks because the figures on income earned to qualify as middle-classed is all over the yard. Just-folks can pretty much tell from our tax-returns what our code-rate is and how much we pay for taxes, but I am guessing we do not know our actual-tax-rate. Consider the following two special interest deductions that many millions get every year: many of us get a deduction that we take for granted and that’s the deduction we get for the interest paid on our mortgages. About 70 million of us get this special interest deduction that costs the treasury billions in revenues every year. And it is a tax benefit that all do not enjoy and that makes it special. In the same vein, take kids: kids are expensive to society, expensive to govern, expensive to educate, expensive to maintain. So how come the more kids you deliver the more money you get to take off your tax bill? A couple who decides that no kid or one kid is environmentally and economically responsible is penalized by paying more taxes than the couple who has a dozen rug rats. In 2004 (with all the technology in this country that’s the most current I can be), there were about 82 million mothers in this country and most mothers had 2 children; so, 164 million deductions walking around at how many thousands of dollars each? I do not know what the total loss in revenue is for this special interest group; I do know there’re a bunch of zeros in the figure. But if you enjoy either or both of these basic deductions and did not take your tax paid and divide it by your income, you do not know your actual-tax-rate. Politicians do not want you to know what your actual-tax-rate is because it is easier to scare the hell out of you or make you mad by citing the code rates which for most are higher. Sometime, I am going to make a list of all the little deductions folks get in addition to the home-owner deductible and the kid-deductible, and I am betting I will be amazed at all the minutia in the tax code that adds up to billions of lost revenue every year. My points are that when you set up your budget, if stuff costs more than your income, you don’t give yourself deductions and that if you do not know your actual-tax-rate, you are not informed and are easy prey for some windbag of a politician to frighten or anger.

Next, permit me jump right onto the politics of corporate taxation: there is a group of politicians who are constantly screaming that we need to lower taxes on corporations so that they will hire more people, make more money to invest in Merica, and put more people to work, and well you know the theory about how corporate profits trickle-down to benefit you. Plus, politicians are forever yapping about corporations moving over-seas because the tax rates here are way too high. Oh you know, Ireland’ tax rate on corporations is 7 percent and here it is 35 percent. I ask about both theories: how does you spell h-o-r-e-s-h-i-t? First, no politician can point to any place in this country where profits are trickling. Profits are going to investments in developing countries and to the PACs of politicians. Furthermore, your politician is not telling you that the real reason corporations move is that they pay multi-mega-way less in wages and benefits there than they pay here. Remember how NAFTA was supposed to elevate wages and standards of living in Mexico? The Problem is that we do not know actual corporate tax rates, but we ought to. That’s the only way to begin to make sense in an argument about corporate taxes. Certainly you know that corporate deductions and subsidies are so damned numerous it would set a polychepalic’s heads to spinning just trying to tabulate them. But we ought to know what every corporation’s actual-tax-rate is the same way you know your batting average over at the slow-pitch-league because both are or should be easy to get. I am willing to bet my fresh-off-the-press-hundred-dollar- bill to your stale, cop-worn donut that in many cases the actual-tax-rate comes way below the tax-code-rate. So, as a nation, let’s quit talking about tax-code-rates and start talking about actual-tax-rates. Only when we know corporate America’s real tax rates can we begin to understand what needs to be fixed in that tax department.

Before I leave you, I do think a great idea would be a gigantic bonfire for all the tax codes; burn every tax code. That would work for me, but it won’t get me elected because every single line of deductibility in the voluminous tax code has a separate constituency that does not want to give it up. They will vote to cut your deduction but fight like a hell-bound Presbyterian not to give up theirs. Consequently, all incumbent politicians, at every level, will double-lie about the labyrinthine tax codes in double direct proportion to the number of constituents who will vote for them if the codes stay in place. Politicians do not want to address the silliness and sloppiness of the tax codes because the deductibles and subsidies are the tools that get them re-elected.

I do not want to close with your thinking I am advocating more taxes; I am not. I just want you to know that I believe taxes are necessary. Your tax dollars should be spent frugally and fairly. People who get paid with tax dollars should do a hard day’s work and be accountable for the job that they do. Stuff we buy should be necessary, not bought for the benefit of some special interest group who dumped a squllion dollars into some campaign fund. I know that’s naive to think the process of taxation could be simplified, but hell, it might be naive and great, at once. Next time, out of the cesspool of tax codes and regulations, I will pump some examples of tax exemptions and subsidies that many, individuals and corporations, enjoy. That ought to perk you right on up.

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