Showing posts with label tax breaks. Show all posts
Showing posts with label tax breaks. Show all posts

Thursday, September 20, 2012

For Richer, For Poorer - Tax Equality?

Here are a few hypotheticals for you.

  1. You're rich. It's tax time, and you can reduce your tax bill by simply following the opportunities written into the tax code. You don't have to break the law, just follow it.
  2. You're middle class. It's tax time, and you can reduce your tax bill by simply following the opportunities written into the tax code. You don't have to break the law, just follow it.
  3. You're barely getting by, living week to week, getting by on a minimum wage salary, subsidized housing and food stamps. It's tax time, and by just filling out the tax form properly you need not pay any taxes whatsoever.
What do you do? Is there any difference in your actions if you are rich, middle class, or in abject poverty?

Does being poor give you a righteous entitlement to take advantage of the law and thus pay no taxes?
What about being rich, or middle class?

Here are two more.

  1. You own or run a multi-national corporation. It's tax time, and you can reduce your corporate tax bill by simply following the opportunities written into the tax code. You don't have to break the law, just follow it.
  2. You own a small business. Your business barely survives year to year. It's tax time, and you can reduce your small business tax bill by simply following the opportunities written into the tax code. You don't have to break the law, just follow it.
Is there a difference? Should there be?

In order to function, any government, like any household, like any business, needs income. That's why we have a tax system. Over the years ours has become labyrinthine, full of deductions, loopholes, escape mechanisms. About 71% of all taxes in the United States are paid by 10% of the population. Nearly half of the workforce pays no tax at all.
After all, you can reduce your tax bill by simply following the opportunities written into the tax code. You don't have to break the law, just follow it.

So whose to blame for this situation? We are.

Both political parties have had opportunities, periods when they controlled both houses of congress and the presidency, even a super-majority. And yet, here we stand. We can blame "special interests," but the truth is we have had the power all along and have not acted. Everyone believes their Senator, their Representative, their President, is the one that will act in our best interest.

And guess what? They have.

Alexis de Tocqueville noted,
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. "
Every time we vote to extend tax breaks to businesses, that is what we are doing. But also, every time we extend the welfare net we are doing the same.

What do you think?