At this time each year, our mediafolk rediscover (for a few days) Federal taxes, maybe because, given their salaries, they pay noticeable amounts of income taxes; those are the taxes that usually draw media attention. But they are not the major Federal tax revenue and have in fact, been providing a shrinking take for years. Around half of American taxpayers don’t pay income tax at all. (But income taxes do seem to receive the most public attention anyway.)
You may know that our Founders outlawed income taxes in their Constitution. (We call it ‘their’ because ours now seems so different.) The Founders’ ban held until 1913, when our elected representatives served our needs with the 16th (or ‘Stick it to us’) Amendment to our Constitution. So as not to frighten the citizens about the new amendment, the tax did not top some 3% at first. But as so many things political, it has been one of those “slippery slope” situations. But its secondary now.
The major tax take now is social taxes: Social Security, Medicare, etc. Regardless of what they may tell you, the enormous cash grab these represent (taken from you before you ever see them via withholding) is not enough to fund those related payments. So in the end, taxpayers pay both the tax deficit and the added borrowing costs, i.e. interest.
The average taxpayer today owes around $154,000 as his/her/it’s share of the National Debt and that does not include interest. We thought that you would like to know …
There are some curious aspects of our Federal taxation. (Of state taxes too, but the Feds are enough for now; we would like to keep our dinner where it belongs.) One large item is the truly enormous amounts of Federal money handed over to the states to dragoon them into doing the Federal bidding. Washington has truly bought the states (that did not resist all that hard) and now owns them. Mostly. Obamacare is the largest recent example; states that agreed to expand Medicaid per the ‘Affordable Care Act’ (pause for hollow laughter) receive substantial Federal largesse. If they don’t expand Medicaid, they get stiffed. This is all basic corruption; ethical tax principles make it clear that the Feds should not collect more taxes than their own programs require; collecting taxes in order to bribe others is unethical. Ask any tax expert, so long as he/she/it is not a politician. It’s also inefficient, since such programs cost for the extra money handling and losses.
Republican Senator Ted Cruz is pretty funny; he’s running around Washington demanding abolition of the IRS. We’d like that too but -along with the Senator – we realize that implementation would consist of a workman coming around to the Internal Revenue Service offices, painting out that name, and painting in whatever new name the government’s tax collectors would use. The feds need the dough, right?
What is really needed is to repeal that 16th Amendment but anyone saying that would be presenting the greatest laugh line since “The snake made me do it.” Tempting, though …
The most baffling tax legerdemain these days comes equally from Dems and the GOP. The Dems say they want to solve our budget deficit with more taxes collected. That’s honest. What’s their ‘big lie’ is, they claim they will collect all of it from “the rich.” If they grabbed the entire income of those ‘rich,’ it wouldn’t cover their spending. So you suddenly discover (too late) that you were rich, until the new tax came.
The Republicans say they want to reduce taxes and from time to time, have done that. Briefly, because they haven’t reduced spending to match the lower tax collections. So they win an election or two until the deficit becomes so threatening that they are forced to let the Dems raise taxes again to bail them out. That’s quite a dance!
Perhaps some of these realities may come to mind next time you hear one of those media talking heads mention taxes, as is likely this time of year. A little light humor, right? We hope it anesthetizes as the government takes its piece of you.
It might help to realize that the Obamacare suckers who have signed up and received government subsidies to help pay for their coverage (at our expense) are now receiving forms W 2 for those amounts. Yup, it’s income and may even be taxable!