Taxes Made Simple, Part II—I’m a Little Depressive over the Regressive

photo: Alexandria Sage

The email rocked me a bit. I thought it surely embellished. Its column format drew my eyes. Oh good. A quick read. Turns out, it was a  loooong column. But the hook set and its simple title captured with clarity.

“None of the These Taxes Existed 100 Years Ago”

That was a bold statement. It can’t be true. Or could it? I’ve accepted these regressive taxes as part and parcel of life, telling myself well, there’s nothing you can do about it so just shut-up and pay up. How many times have I laughed at that quote—“Two things in life are certain—death and taxes.”?

Suddenly a new thought surfaced—This seems excessive.
But had I ever questioned before? 

To be fair the list deserved some fact checking.  I checked several sources and, with exception of an outdated few, they are all unmistakably true. I read through some comments on Snopes and couldn’t believe one person excused them away and called them “fees”. Fees, taxes, tax credits (yes, we pay for those, too)—call them what may but they are money out of my paycheck above and beyond what I already pay. The list also included the line, “I think we left British Rule to avoid so many taxes.”

Boston Tea Party.

Boston Tea Party: Wikipedia

I’m willing to pay my taxes and agree a few are necessary. But the term “fair share” is a bit out of hand when I look at this list of “regressive” taxes that all of us pay. Several caught my eye … IRS Interest Charges (tax on top of tax), IRS Penalties (tax on top of tax), Luxury Tax (what is that???).

And have you heard the latest? The United Nations wants to impose global taxes on citizens of developed countries to give to Third World countries to “end poverty.”
Yes, do an internet search. Somehow this one’s not getting the attention it deserves. {See related articles} We Americans know how our own “War on Poverty” worked. And now we might be liable to pay leaders of Third World nations who’ve demonstrated their own deficient use of their own resources? As Thomas Jefferson said, “Commerce with all nations, alliance with none, should be our motto.”

English: A Portrait of Thomas Jefferson as Sec...

Thomas Jefferson

How did this happen? I think another Jefferson quote says it well. If once the people become inattentive to the public affairs, you and I, and Congress and Assemblies, Judges and Governors, shall all become wolves. It seems to be the law of our general nature, in spite of individual exceptions.”

Are we still inattentive?

I believe these regressive taxes are nothing more than Jefferson’s wolves’ in sheep’s clothing. In fact, I think the regressive tax needs a new name.
How about the “repressive” tax?

coins

Here’s the list. Try not to get too depressive.
{Yes, I know that’s not a real word. Too much Dr. Seuss!}

Peace,
Alexandria

The List:
Not one of these taxes existed 100 years ago…
And our nation was the most prosperous in the world.
We had absolutely no national debt.
We had the largest middle class in the world.

What happened?

Building Permit Tax
CDL License Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Federal Income Tax (Fed)
Federal Unemployment Tax (FU TA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges (tax on top of tax)
IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Tax
Marriage License Tax
Medicare Tax
Property Tax
Real Estate Tax
Service charge Taxes
Social Security Tax
Road Usage Tax (Truckers)
Sales Taxes
Recreational Vehicle Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Tax
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Non-recurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Tax
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax

Related articles:

Continuing along the same thread of Something New and Different by the Daily Post, the Tax articles a bit different than my usual inspirational fare:
http://dailypost.wordpress.com/2012/10/08/weekly-writing-challenge-and-now-for-something-completely-different/

Photos courtesy of Zemanta and Alexandria Sage

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Taxes Made Simple | Part I, from the Guest Author

taxesTaxes. It’s the topic of the day. As the United States nears Election Day it’s the hottest topic on the table. I don’t pretend to be an economic expert but I do own a business, meaning I employ people {families}—meaning I pay business taxes. So I do know a few things. Experience has taught me a lot and I’d like to share some simple principles about a topic that is discussed, explained, over-explained, not explained, but mostly … not understood.

There are two basic types of taxes.
The first is equally given to both rich and poor—these are called regressive taxes. Examples are sales tax, taxes on cell phones, gasoline, etc. The other type of tax is a progressive tax and these taxes affect the wealthy more than the less affluent. Income taxes in America are progressive. Thus, the income tax rates increase as one’s income increases.

A favorite way to raise tax dollars is to tax business instead of people. It allows us to feel like we are taking money away from the rich people who own the business instead of the working class.
Unfortunately, this is merely an illusion. When taxes are raised on any business, the cost is added to the goods or services created by the company. This means if the company creates something used by all people {families}, then all pay the tax equally. If we are honest, we quickly realize that business tax is a regressive tax.

Business taxes have another negative impact.
If businesses have to raise their prices on goods due to higher business taxes, another country with a lower business tax can easily compete and make the same product for lower cost.

Tax Preparation

Higher priced products made in America compared to the same product made in the foreign country with the lower business tax means our products can no longer compete in the international market place.

And here the dominoes begin to tumble. This decreases the number of American products sold abroad. A decrease in American products means a decreased amount of American workers {American families} needed to make the product. A decrease in the number of American workers needed ultimately decreases the number of jobs to make those products within the United States.
And I don’t need to explain what unemployment is.

With this unemployment there is ultimately decreased tax revenue that could be generated here in the United States. The increased revenue could not just return us to a robust economy but could fund our government and all of its programs.

Another unfortunate by-product of high business taxes is that it encourages companies to report profits abroad. In addition, our high corporate tax rate compared to the rest of the world encourages companies to move their corporate headquarters abroad. This again decreases income reported in the United States that could be taxed. Plus, having a headquarters located overseas decreases employment within the United States. Keep in mind the headquarters employs workers {families} from their location.

General Mills/Headquarters #1

I realize that it’s nice to feel like you are “sticking it to the rich guy” who owns a company {families}. Unfortunately these taxes have the exact opposite result.

If you ask me, this is an attack on free-market principles that will lose. And who stands to lose the most? For starters, try the middle-class. Without a strong middle-class we cannot sustain jobs to provide for our families. What will this do to lower-income working families? What happens to the opportunities for our children? Without the revenue for the government what happens to the poor, the elderly, and the handicapped?

So again, who is the real loser?

Elderly Timorese in Suai Loro

How about our entire future?

Thoughtfully,
Steve

“My reading of history convinces me that most bad government results from too much government.” ~ Thomas Jefferson

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All photos courtesy Zemanta

A Tale of Agony {Or Whatever Happened to Winning?}


I’m not sure when it happened, but some time during the last thirty years our culture forgot how to celebrate success. We forgot how to be proud of achievement and became more concerned about the feelings of the loser than the accomplishment of the victor. It’s happened in almost all areas of life, but is most easily noted on the athletic field, in the classroom, and now has crept into the business and financial world.

I first noted the change on the athletic field when my kids were small, participating in league sports. When I was a kid, there were winners and losers. Trophies were awarded to the champion and perhaps the runner-up. But for my kids, everyone took home a trophy or a medal. Even the kids that came in last got to take home a medal. Somewhere we lost “the thrill of victory and the agony of defeat.” Instead we became a culture that celebrates the “thrill of participation.”

I learned a lot in athletics but a key lesson was this—I learned more from losing than winning. But even beyond, the most important lesson I learned was that I didn’t like losing! This extreme dislike made me work harder to improve, perfect, and finally accomplish.

From that spawned another lesson—I liked success. The entire crux of the matter found its summation in the most crucial lesson of all—between the reward for success and the negative feelings of failure, it didn’t take me long to realize the extra effort was worth it. Failure spurred me into high gear. No one can achieve perfection but failure drove me to deeply look at how to do things different. In this quagmire of self-examination, success begins. If the self-examination of failure is removed, accomplishment declines.

The classroom is another place I noticed this. Academically, we started celebrating mediocrity. The best example of this is the change of the bumper stickers given out to kids in school. First, we had the bumper stickers that said “My Child is an Honor Roll Student at Fiddle Faddle Middle School” but this obviously offended the non-Honor Roll student so soon the signs changed to “My Child showed Good Character at Fiddle Faddle Middle School.” I’m not knocking integrity but anyone can show good character with very little effort.

Kids that work hard today get passed over, snubbed, even dismissed because we have to lift up those that “showed up.” This is ultimately discouraging for those trying to achieve. Why do we not celebrate their success and achievement anymore?  Extra effort that leads to success was the foundation for the greatness of American achievement, but is a time-tested truth for any society that aspires to greatness. We did not succeed by celebrating mediocrity in any arena.

(Please note—I believe celebrating the Honor Roll Student is correct, but the parents should teach humility by placing the bumper sticker on the refrigerator and not on the car. That way the child has their success celebrated and is also taught the importance of caring about other’s feelings.)

Now, about the financially successful, most have worked extremely hard. They worked harder in school than most, some continued their education, and they work more hours than those who don’t succeed. Certainly we can point to other reasons for their success but largely, we make excuses for it. “They are smarter, they had more opportunities, they had a good home life.”  The real truth is we don’t like to admit someone else worked harder that we did.

But perhaps this honesty can cause us to return to the principle of hard work, learn the lessons of failure, empower our abilities, and celebrate the success of others. Let’s not settle for mediocrity. Let’s relish success and achievement. Every time I meet one of the successful I look at them with the joy of knowing with some hard work I have the same opportunity.

So where did we screw up? I think we simply forgot how to celebrate the success of others and the important lesson failure teaches. It is truly okay to have winners and losers. We are not all created equal and have different talents. But there is no denying we are each called to use our talents to the best of our ability. And this usually comes with a healthy combination of desire for success and fear of failure.

Thoughtfully,
Steve

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