Taxes - our upside down world

The subject of taxes can strike a nerve in just about everyone involved in the conversation - even this Libertarian. What are we likely to hear from anyone in the discussion?

Surprisingly, there are about as many folks on one side of the issue as there are on the other. For everyone that wants a lower burden from those government revenue collectors, there are others that believe our government makes good use of our money and should get more from everyone.

Odd, isn't it?

Here's a short list of the reactions you'll get from folks if you bring up the subject:

• too many
• too complex
• too high
• unfair
• unjustified
• never ending
• no new ones
• no rate hikes
• not enough people paying their fair share
• no breaks for the rich
• rebates
• shrinking revenues
• incentives

One thing we can all agree on, the subject is vexing. I look at these government sources of revenue much like I look at government itself, a necessary evil. And, like government, they continue to grow in number, complexity and burden, and their roots take a stronger hold each year.

Thomas Jefferson told us that the natural way of things is for government to grow and liberty to yield. With respect to taxes, it's clear that they continue to grow, with encouragement of those we elect, and the majority that are "governed" must yield - and cough up more and more dough each year to keep the government leviathan growing and in good financial health.

Perhaps being the oddball is a good way to practice tax avoidance simply by being outside the mainstream of the "governed."

I maintain that we're largely upside down with respect to how government obtains its funding. Let's look at the various sources and see if this perspective has any merit at all.

Federal Income Taxes

"The more you make, the more they take, you never seem to get ahead." That's a line from a song by Bread called This isn't what the Governmeant. It's as true today as it was when it was written back in the 1970s.

There are citizens of this country that pay hundreds of thousands, and even millions of dollars in taxes to the U.S. Government. Why? Are these higher income earners such a burden on the federal government that they must be penalized?

Of course not, but they have the ability to pay. You can't assess individuals that have no means to pay, so it's the tried and true policy of "soaking the rich."

The overwhelming majority of federal government revenues are paid by a small minority of citizens and corporations, and these are the very entities and individuals that are most likely to invest, start businesses, create jobs and otherwise fuel the economy. So why are they being penalized?

Because we have it upside down. If anything, we need to reduce the financial burden on these higher income earners and job creators so their wealth can be voluntarily spread around in the form of investments and new enterprises.

Instead, our philosophy is income redistribution. It's unfair, it's regressive as all hell, and it rewards mediocrity instead of achievement.

I believe that we thrive in spite of the government leech that is attached to us.

State Income Taxes

This is largely follow the leader with the feds. I lived in California for 18 years, and an appropriate summary of their system of revenue collection is to point to the feds and exclaim, "What he said!"

When you file a return, you simply enter in what's on your federal return in many cases. The large financial burden on me as an individual was one of the key reasons for me to relocate to Wyoming. When I left California in 1998, I was paying about $660 a month.

As near as I could tell, all that money entitled me to opportunities to pay even more money. What with a population the size of the entire country of Canada and an economy that would make it a powerful nation on its own, it's only sensible to assess income of the inhabitants and corporations, and so they did.

An associate of mine once said that California wants to collect taxes on the money you make by working on your laptop in an aircraft as you fly over California airspace. Despite this aggressive collection effort, the Golden State has quite a tarnished reputation for financial management.

This shows me clearly that feeding the leviathan what it demands isn't helpful at all. It only enables those irresponsible spenders at the capitol to be even more irresponsible.

California has some of the highest income and sales taxes, and it has the largest population with many of the highest income earners in the country, yet it can't come close to balancing a budget. Just another indication that we're upside down in our system of income and spending.

Property Taxes

With assessment of real property, we see the entrance of "envy" taxes. The government assesses you more because you have more. It's a cousin of revenue based on income. It's obvious to the government that you have the ability to pay, so once again we're going to "soak the rich."

This is another example of an upside down policy. If you invest in the community with a large estate, you pay more. If you take a rundown place and fix it up, you pay more. If you make improvements to your property, you pay more. If you maintain your property in good condition, you pay more.

On the flip side, if you have a small, worthless shack on a small piece of land, and you fail to maintain it, your assessment isn't nearly what your neighbor's is, so he'll shoulder the burden for you with respect to schools, roads and other expenses.

It doesn't matter how many kids you have or how much of a burden you are on public services. All that matters is how much wealth you have, because that's the indicator that government uses to determine what you can afford to pay.

Real estate assessments penalize those who invest, improve and maintain their property. It's upside down, just as you might expect.

Personal Property Tax

This is more "envy" taxes on things like automobiles and boats. Newer cars pay hundreds each year to register, regardless of the miles driven on the roads, and older junkers pay very little for registration because they are worthless.

Again, it's a penalty that you pay if you're successful and choose to own a new and expensive car. When I first registered my new car in Wyoming, I explained to the gal at the county clerk's office that I had paid cash for the car - I didn't need to make a car payment. I only wanted to pay for my license plate.

Is a new and expensive car more of a burden on the system of roads than an old cheap hunk of junk? Is it more difficult to create or renew a license plate for a newer and more valuable car? And, do we really need to pay an annual registration fee? Is this annual fee really necessary to enable the car to operate for the coming year?

I didn't think so either. It's all about revenue, and it's just another example of how we're upside down when it comes to our tax policies.

This libertarian minded individual is fed up with taxes that burden the individual and the businesses that are the backbone of our economy. Once people get into government, they focus on taxes as a way of maintaining the position that they're in.

It seems that those we elect just can't reduce the burden of taxes on those that are the lifeblood of this economy. Why is that? As George Carlin asked many years ago, "So where are all the bright people of conscience?"

I think once they get into government and get comfortable, they too get themselves upside down.

Done with Taxes, take me Home