Topic: Taxation
The Myth of High Taxes. It is the avoidance of taxes by corporations and wealthy individuals that should be changed.by Master C
(Liberal)
Friday, September 26, 2008
I'm sure you hear someone say it at least once every day. And, in many places, you hear people say it with as much conviction as the Pledge of Allegiance: "My taxes are too high. They're so high, I can barely get by."
People feel that the government is taking too much money from them in all the various forms of taxation that we face and, in many cases, wasting their money. But, this is a myth as certainly devised by the tax-cutting, right-wing, conservative, snake oil salesmen as is the myth that the Sun rises and sets in the sky every day. We know the Sun doesn't move at all relative to the other planets; the Earth turns on its axis so that the Sun appears on one horizon, seems to move across the sky during the day, then disappears on the other horizon as the Earth continues to spin. Yet, even the meteorologists continue to say that the Sun rises and sets at certain times each day like the Earth is fixed in the sky and the Sun is circling us. This is archaic thinking that misleads an observer from knowing the truth of what is actually happening.
This is the same way that myths about taxation are perpetuated by misidentifying the real causes of financial difficulties by using concepts that are so archaic they should be banished from our jargon now that we can see more accurately who is actually "behind the curtain", making it appear that taxes are the cause of our maladies when it's really PRICES. Just as the Wizard of Oz was a fiction of smoke and special effects, so too is the myth that taxes, not prices, are causing us to identify the wrong culprit in our economic malaise.
When people say that their taxes are too high, what they are indicating is that they're having trouble paying their bills. They conclude that if their taxes were lowered, they would have more money for other things. While this may technically be true, it actually obscures the real cause and effect relationship between what people are receiving for their money and that for which they're paying. If they are given the choice of paying fewer taxes while also receiving fewer social benefits like streets and highways in good condition, sufficient police and fire services, safe water and sewage treatment, adequate schools, courts, hospitals, jails and the like most would not want to see these social benefits also reduced.
But, even at a time when the price of automobiles, gasoline, insurance, Coca Cola, movies, haircuts, cable tv, and college textbooks are rising as fast as a thermometer in the Sun, we don't hear a peep about these prices being too high. Why? Because we know that no one is listening! "Pay up or go without" is the mantra that free-marketers profess. Even when the wastefulness and extravagance of the private firms providing these products is flaunted as shamelessly as a lush and green golf course maintained in the desert. If you can afford it, it will be provided no questions asked, no apologies made.
What is ignored in this discussion, though, is the myth that these businesses are being appropriately taxed for the services they receive and the benefits they provide. Why are so many frivolous, privileged, elitist, self-serving, restricted costs exempt from taxation the cost of corporate jets, lawyers and lawsuits, stock buy-backs, corporate travel, country club memberships, limousine services for executives, healthcare costs, pensions, profit-sharing, and the sometimes ludicrous and alarming costs of advertising? As most economic theories will attest, the less you tax something, the more of it you will usually get. Are these really the kind of expenditures we want to get more of, or would we like to see them decreased?
What should actually happen is for items of this type to become AFTER tax expenses which would mean that stockholders, not taxpayers, would be paying for them. This would make stockholders insist on LOWERING these costs to increase dividends instead of the current way in which corporate executives INCREASE them to reduce their taxable obligations.
It's the avoidance of paying taxes by corporations and wealthy individuals for services that should, very reasonably, be taxed that is at the heart of the taxation delusion. Many wealthy individuals have things provided for them by the corporations or businesses who employ them that are neither taxed nor recognized as income. Country club memberships, corporate credit cards, investment or legal advice, the lease of an expensive automobile or limousine, low or no-interest loans, stock options, deferred compensation accounts, rented homes or other living accommodations, corporate yachts, ski lodges, exclusive tickets to theater performances, the opera, or sporting events, hunting clubs, and even paid assistants as chauffeurs, maids, chefs, nannies, dog and horse groomers, and landscapers which are lavishly provided to executives of many corporations with no tax obligations accruing to either the corporation who writes them off as operating expenses or the individual who is not required to account for them as income. This kind of corporate largesse is more than a gratuity, it is a major part of our taxation deficiency!
This is not to say that these privileges should be disallowed, it is merely to say that they should be taxed. If the corporations want to provide them to executives, then make them an AFTER tax expense, don't allow them to be treated as BEFORE tax expenses. On the other hand, if they are for individual services, they should be accounted for as individual income. In this way, stockholders will monitor and approve executive compensation more closely, or individuals will not receive these perks without claiming them as income.
Let's at least be FAIR about who pays taxes, and recognize that PRICES are really the culprit in dwindling household budgets.
Did you like this article? If you did, Thumb It! 1 thumb so far
The views expressed in this
article are those of Master C only and do not represent
the views of Nolan Chart, LLC or its affiliates. Master C is
solely responsible for the contents of this article and is not an
employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.
Corporations do not pay taxes, people do. Where does the money come from to pay taxes in the first place? From people who buy the goods or services.
You are really a proponent of double taxation.
Instead, eliminate all corporate taxes. That would eliminate most of the accounting issues we have today. It would repatriate income from companies around the world. It would then force us as individuals to address the true cost of taxation and running this country, because now it is personal.
The truth about taxes is that no one knows how much tax they really pay. No one.
Posted By: Walt Thiessen
Date: 2008-09-26 10:50:08
There are a number of misconceptions in your article.
I'm not right-wing. I'm libertarian. As the Nolan Chart graphic shows, I'm neither left nor right. Yet, I favor cutting taxes. In fact, I favor eliminating the income tax entirely. Does that make me a conservative, a right-winger? No. Call me a right-winger too many times, and I may take a swipe at your nose. In fact, I dispute the claim that typical conservatives (with a few exceptions) favor free market economics. Most of them talk like they favor it, but when they get elected to office we find out really quickly that they were blowing smoke.
When I say the income tax should be eliminated, I'm not just saying I'm having trouble making ends meet (true). I'm saying that I earned that money, and that it doesn't belong to the government.
If you think that there have been no peeps about prices being too high, then you haven't been reading many of the articles on this website. For instance, I wrote an article last March entitled, "Gold, Federal Reserve Notes, and Prices of Common Items" in which I didn't just complain about prices, I actually showed why it's happening. Other columnists on this site have also talked about this issue.
The idea that taxes are ever fair is just plain dishonest. Taxes are always unfair. There has never been a tax ever devised that was universally recognized as fair. Whomever feels they are getting shafted by a tax the most always think the tax is unfair. The myth that progressive taxation is more fair than other forms is just that, a myth, and it's a myth for this very same reason.
I'm always amused by liberal approaches to taxation, because they're so inconsistent. They want a progressive income tax, but they wouldn't dare turn social security or medicare into a progressive tax. Liberal politicians are quite content, year after year, sticking with a flat tax on these unsustainable "programs," and they'll fight you tooth and nail if you suggest otherwise. Yet, there's no doubt that these taxes harm the poor the most. I don't favor keeping them at all, but I do have to laugh at the silliness of the liberal position on this.
Aiming at the wealthy with an eye toward taxation merely because they are wealthy is just plain envy and resentment over wealth. I certainly despise those wealthy people who collect their wealth via fraudulent activities (I've even written about them), but that doesn't mean I want to increase taxes on those who haven't ripped others off in order to make their fortune.
The most disconnected part of your argument, though, appears to be based in ignorance. Correct me if I'm wrong, but it appears you really have no idea why prices go up. Instead, you just sort of accept it as a given. If you only knew! It's the Federal Reserve System that's causing this problem. I suggest you investigate that issue further. You'll find dozens of articles on the subject, including many published on this website within the past few months because of the financial crises we're going through.
Walt and EJ I agree I would just like to add a few points onto the many and well written ones you two have already pointed out.
Master C. Your point about prices being too high vs. taxes being to high is good point. However, while you rallied against pretax company perks and advocating them as post tax expenses would only serve to increase the cost of the product or service the company provides thus increasing cost to the consumer. Like EJ stated Corporations don't pay taxes consumers do.
Further, you stated "...If they are given the choice of paying fewer taxes while also receiving fewer social benefits like streets and highways in good condition, sufficient police and fire services,safe water and sewage treatment, adequate schools, courts, hospitals, jails and the like...." Many of the service you mention should not be in the hands of the government in the first place. The government has time and again proofed how inept it is at providing quality services. Why is it that many impoverished Mexican schools provide a better education then many of the well funded American schools. I have grown up hearing schools need more money and schools being given more money. Yet the schools do not perform any better. Much of the money is wasted in government administrative costs.
It is not more taxes or move government the American people need. Americans need to accept more responsibility for their lives, their security and even their education.
Restore America with higher taxes? How can I express my incredulity with punctuation? Lots of ??? and !!! I don't know but if you don't like rising prices then look no further than the Federal Reserve.
Are you paying too much? I know that Master Communist here would like to know because he actually wants your to pay about 75% of your income in taxes or maybe even give it all and work for food.
Social Security Taxes + Income Taxes + sales taxes + use taxes + gas taxes + property taxes + medicare taxes + license fees + regulatory fees + parking and speeding tickets. It can all add up to more than 50% Do we get 50% back in services from the GOVERNMENT?
Posted By: patrick henry
Date: 2008-09-26 20:36:22
Walt, EJ Censored and trd, awesome guys, how LIBERTARIAN of you guys to educate your fellow citizens no matter how fascist they are.
With all due respect, economic theory can be a little difficult to swallow at times, yet if you sip slowly you will eventually see the bottom of the glass. That being said, I appreciate you taking the time to right out your opinions, however, I think you will find the going here a little less rough if first you educate yourself to economic and social theory. I am willing to bet that after time it will get more heated if you dont. Please read some of Walts other writings on the Federal Reserve system, I think you will find it well researches, written and easily understandable.
" A people that wish to be ignorant and free, want what never was and never will be"- James Madison
I am grateful that "Master C" is merely spewing his communist propoganda here in an obscure forum, rather than running for office under these outdated, tried-and-failed Soviet-style philosphies. The welfare state that would result from his ideas would bring the United States of America to its knees just like they did in the Soviet Union. Or is that his intent? Perhaps...
As I stated in response to another of the communist propoganda pieces spewed forth by "Master C":
This article reads like an op-ed piece from a Soviet "newspaper". Big Government and its subsequent byproduct - Big Taxation - are what the founding fathers fought against to institute the freedoms enjoyed here in the United States of America. More taxes are NEVER the solution. The infrastructure is sound, needing repairs. We could have a more settled Middle East if we had showed some real and correctly aimed muscle back on September 12th, 2001. America's politicians are a major source of the problem.
The Marxism/Obamism he advocates will bring the world to its knees and needs to be avoided above all.
Here's what we need to help bring America back to the forefront on a global basis:
- We need to be better stewards of what we have, not squeeze more blood out of the working people in this country. The Socialism/Cummunism that "Master C" advocates has failed so many, many times in the past in many other countries. The taxes our government currently collects would go a lot further if the government didn't throw money away. A little efficiancy would go a long way. The less the politicians and lobbyists steal and skim, the more for the needed social programs and infrastructure.
- We need to eliminate re-elections - one term and you're done - back to provate life. Get rid of the do-nothing career reps and senators, replacing them with those chosen by lottery who have no agenda and are not owned by anyone or any group. There are over 300 milion of us, plenty of people to serve in office over the course of time.
- We need to provide our country with the oil that's been placed right under our feet, while at the same time giving incentives to industry to develop workable and manufacturable alternative energies.
- We need to build an extremely strong interstate water transport system to alleviate the effects of flooding and drought, and to make sure there's plenty of usable water for everyone. Scale back most of the Iraq costs and divert the funds to this project, the USA will flourish.
- We need to stop the insane finger pointing in Washington and get to work building for the future - not arguing just to keep on mopping up the messes of the past.
Unfortunately there isn't a decent person in the runing for being appointed President of the USA this time around.
I think most of you, sticking to your Libertarian group think, are missing master c's point. By allowing these "luxuries" as deductions we are "rewarding" these activities and of course paying for them. If the code is changed to not reward luxuries for the rich, then taxes for the general population can go down. Simple math. Then we not only get a simpler tax system we get a lower tax. Also, if you really believe in competition in the market, then prices will not be raised because of this change, companies will be made more competitive. The Libertarian ideal should also include freeing the mind from worn out, repetitive thoughts!
Want to comment on this
article? Leave your comment here. Your email address is
required to track your comment. However, we will neither
publish your email address nor distribute it to other
organizations or persons. The only reason we might use
it would be if we needed to contact you regarding your
comment. All comments are subject to our
terms of use policy.
