"Some people think the Federal Reserve Banks are US government institutions. They are not... they are private credit monopolies which prey upon the people of the US for the benefit of themselves and their foreign and domestic swindlers, and rich and predatory money lenders. The sack of the United States by the Fed is the greatest crime in history. Every effort has been made by the Fed to conceal its powers, but the truth is the Fed has usurped the government. It controls everything here and it controls all our foreign relations. It makes and breaks governments at will." ~ Louis McFadden
Progressive taxation is one of the favored tools of the left. Promoting class warfare, the left constantly rails against giving tax cuts to the rich. Yet the wealthy already pay an unfair, disproportionate share.
I am getting screwed. I'm nowhere within reach of what I consider wealthy, yet my government treats me like I am. My definition of wealthy is not having to worry about going to work tomorrow. I worry. I am a self-employed consultant. If I don't bill, I worry about what will happen to my bank account. I worry whether I'll have to get a job working for The Man again.
Am I wealthy? I live in a modestly-priced house with an unfinished basement. I still make payments on one of two mid-priced junky Fords. I am married with three children. We do well, but we don't live extravagant lives. We try to take a nice family trip every two years, but it doesn't always happen. We manage to eat up everything but a few hundred dollars a month. Calling me wealthy is an insulting joke.
I'm not rich. Yet I lose a considerably higher percentage of my income to progressive taxation than someone who makes an adequate $40,000 per year (say, a teacher). Plus, the government takes an additional seven-and-a-half percent from me because I'm self-employed. Most people are blissfully unaware that the government thieves half of their 15.3% Social Security/Medicare burden from their employer. Those of us with enough initiative to start our own businesses are personally penalized with this tax. The U.S. government penalizes us even more when we decide to start hiring employees.
Worse, deductions (such as the child care deduction) that many people take for granted decrease or completely disappear once you earn above a certain amount. Not only is my marginal tax rate a higher percentage, my effective tax rate rises as I lose these deductions.
Let me be clear about what's going on here. I pay a higher tax rate than most Americans. I work more than the average American since I am self-employed. (I'll give you a hint: I contract for 40+ hours a week, I manage my business for another 8 hours per week, and I write technical books and articles for another 20-30 hours per week.) Being self-employed, I take more risks than the average American. My reward for this effort is to pay an inequitably higher percentage in taxes. To take the cynical, angry white male view of things, my government is stealing a higher percentage of money from me because I have busted my ass to achieve more.
The higher percentage reduces my additional achievement. The socialists want to reduce it even further. JOhn KErry (the capitalization is deliberate) wants to take an even higher percentage from the achievements of the 'rich.' The ultimate goal, true socialism, would reduce any additional achievement so that we all would earn the same reward. For my hard work, I would earn as much as a lazy person doing the least possible to survive. At that point, what's my motivation to bust my ass?
Fortunately, I have the means to try decreasing my tax burden. I buy a copy of the software program TaxCut or TurboTax each year ($30) and run it on my computer ($1,500). I spend tens of hours each year trying to make sure I've deducted every possible amount. In years where I encounter a particularly nasty tax scenario, I call on a tax accountant and watch my money bleed by the hour ($100/hour). The money and time I spend is usually worth it, but I find something inherently wrong with a tax code that compels me to spend so much to protect myself.
As an example of a nasty tax scenario, I got screwed on the gotcha known as the Alternative Minimum Tax (AMT). This is another ugly little surprise that few people know about. In my situation, it was related to ISO stock options. I made a calculated decision in the dot-com boom era at precisely the wrong time. For my error in judgment, my gamble, I ended up having to pay $15,000 tax on stock options that were never worth anything and never would be. Less fortunate individuals ended up with tax burdens in the hundreds of thousands of dollars.
The goal of the AMT is to prevent 'the rich' from hiding their money in places that people of lesser means wouldn't be able to access. Unfortunately, the government keeps forgetting that I'm not rich. I had to take out a loan to pay my taxes. My tax accountant showed me how I can get some, but not all, of that money back over many years. But I will have lost thousands of dollars because the government pulled an ace from their sleeve. That's what I get for gambling with Uncle Sam.
You might be thinking that I'm resentful of those teachers and other underpaid people who lose a much smaller portion of their income to taxation. Oddly, they are more resentful of me than I am of them. Liberals such as JOhn KErry (I'll call him JOKE from now on for brevity's sake) heavily promote the divisive idea that the rich only got that way by stepping on the poor.
JOKE and others have taught people of lesser means to hate me because of my supposed wealth. The jealous wring their hands with glee at the prospect of me earning less money. It's not even because they think they're getting more. There aren't many people so stupid as to think that they get more when the government steals more. No, it's because they've been brainwashed to hate me, and they want to see me fail. But I don't hate them. In fact, I would love to see them all succeed; it benefits everyone.
We're all in this boat together. People in lower income brackets get screwed by the government in their own special way.
First, the tax code is oppressive. It is a forcible theft of money. It is extremely complex. Those of lesser means that don't understand the tax code (I sure don't), may not be able afford a computer or a tax program, let alone an accountant, to help them out. Even if they can afford to pay for help, they may not know that they really should, or may decide that something else is more important. In lieu of these aids, they imperil themselves to the government. One honest mistake and they could have a gun to their head. The tax code is a threat.
Second, the tax code is a tool of social engineering. I don't expect people to resent me for making more money. But I do expect people to resent the government for giving me tax breaks that may not apply to them. I live in a home and pay a mortgage. I can deduct the mortgage, while apartment dwellers cannot deduct their rent. Is that fair? Absolutely not.
Your government designed disparities between who can deduct and who cannot in order to alter how you live. The government thinks that owning a house is good. They think that investing money in certain ways is good but in other ways is not. If you're not making much money, you may not have a lot of options. You're stuck with whatever penalties the US government has decided to impose on your lifestyle.
Only the power hungry and the self righteous believe that the federal government has any business running your life. This is why the left likes the tax code the way it is. Modern liberals don't believe you are smart enough to run your own life. JOKE and others love the power of the tax code as much as they like the way it feeds their government greed.
I have different problems with the Republicans. They may be worse, as they pay lip service to smaller government and lower taxes, but spend your money as profligately as the left. At least the Democrats tell you that they want to screw you. Also, the Republicans do themselves no favors by promoting 'tax cuts,' to which the Democrats simply add the phrase 'for the rich.' Instead, the Republicans should be pushing spending cuts instead of tax cuts.
Neither the left nor right seems to be concerned that we have an obscene amount of debt. Our government grows in size, power, control, and greed each and every minute. Our money is backed by nothing but the promises of central bankers. Someday those promises will be as empty as those from the politicians.
To paraphrase Mark Twain, everyone complains about taxation but no one does anything about it. Unfortunately, significant changes to income tax collection will not take place without another tea party or similar rebellion. Tax accountants, lawyers, tax software manufacturers, downtown pricey lunch spots, home builders, and IRS employees themselves depend upon the tax code for their survival. And congressmen don't get re-elected if they don't secure more money for their state, which means increasing the debt.
Thomas Jefferson wrote in the Declaration of Independence that governments derive their 'just powers from the consent of the governed.' Supposedly, we give consent through our representatives, our elected officials. I'm not seeing it. Instead, I see a system that the powerful have corrupted to the point where it no longer has the checks and balances we once designed into it. 'But when a long train of abuses and usurpations, . . . it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security,' wrote Jefferson . Perhaps it is time.