Tax Me!

It's becoming clear to me that there are reasons, good reasons, why we have massive deficits being run up by the Federal Government.  Quite frankly, over time, it has been trying to become the candy shop for just about every demographic... and we, as a nation, have been noticing and changing our behavior.

Is it reasonable to think that you can call for drastic budget cuts and NOT run into interests that have been relying on government help/largess/handouts/bailouts?

Programs (and people) that have the ability to fund themselves have been lulled into accepting government dough for so long that their own budgets are built from the bottom up on HOW MUCH the government is going to give them.  They count on it. And when it looks like it won't materialize some year - they squawk, loudly.

Politicians are human and want to be the nice guys who come with baskets of money, making people happy.  They do not want to be the guys to say, "Sorry, the cupboard is bare."  Then they would become the Bad Guy, and legions of people would yell for them to cut someone else's funds, because, by golly, what WE do is too important to touch!

The local paper frequently carries hot-tempered letters to the editor that deride politicians who just-don't-get the benefits of some program that is being considered for cutbacks.  "Johnny will never learn to read if you take dollars out of this program, and kids are the future, right?"

I confess to having a leaning in that direction myself, when I read what space programs NASA would have to abandon or never launch to meet its projected cuts.  Mea culpa.

So what is the answer?  Let's take this question aside from the usual political process of "kicking the can down the road" (think: Social Security).

The answer, according to people of a certain mindset, is to shake down the rich.  "Tax cuts for the rich!" was one of the most toxic phrases tossed around Washington during the Bush administration.  The people who averred we should tax them more ignore (at least) two important points.

Forbes says the world has 1210 billionaires.  The world, not America. They have a total net worth, collectively, of about $4.5 trillion.  Here's a sobering exercise: go visit http://www.usdebtclock.org/ and watch for a few seconds.  If you emptied their vaults, confiscated their yachts, and took even the last fine Havana cigar from every one of these rich people, you haven't come halfway to paying down the existing Federal debt. We're going to post more than $1 trillion of red ink just this year!

So the first point is: the "rich" don't have enough money to fix the problem.

I would bet that the vast majority of "boomers" (of which I am one) were taught by their parents to stand on their own two feet, to make their own decisions, to accept responsibility for themselves. We learned to want never to appear "needy" - requiring someone's charity just to make ends meet.

The government has been busy undermining that.

For Tax Year 2009, reported in April, 2010, 47% of American earners paid no Federal income tax... or actually received a tax "rebate" (rebate? for taxes not paid?).  According to consulting firm Deloitte Tax, a family of four with two kids under age 17 owed no Fed tax for incomes up to $50,000.  The center cut of the middle class - that is, the middle 20% of households - had incomes ranging from $35,400 to $52,100. This illustrates that even very solidly middle-class earners had no Fed tax liability.

I'm not forgetting payroll taxes for Social Security and MediCare. I'm just talking Federal Income Tax here.  Now, how and why did we reach this point, where nearly half of US households do not contribute to the general pot that funds much of our government? Our legislators are responsible.  They have cut taxes to curry favor, AND they have handed out money for causes they consider "worthy" to curry more favor or to salve their charitable  inclinations.  And everyone who has benefited from this largess has gotten used to it.

I'm under no illusions. The country cannot afford to provide benefits that are not paid for by revenues. (That's why Congress annually raids the Social Security Trust Fund and replaces real money with IOUs. A metaphor I heard recently makes the import of this action clear: If I owe you $10 and you ask for payment, do you care whether I reach in my left or right pocket? What if I label my left pocket "Social Security" and my right pocket "General Revenues"?  No, you just want your $10.  If all I have is $6, I've gotta get a loan somewhere for the rest, because the IOUs from my right pocket that were "paid" to my left pocket can't be used to pay you.  And that's exactly what the country is doing.)

Point Two is that the combination of tax reduction and benefit increase which has resulted in our colossal debt has rendered many of us otherwise patriotic and responsible citizens dependent on the government continuing business as usual.

I realize that after doing taxes this year, we're part of the problem. As a household with two retired people and one college student, by totting up one pension, one Social Security benefit, various dividends and bond interest, occasional work as a Census employee and a commercial audiobook narrator, and capital gains on 401K funds cashed in to provide living funds, we barely creep into the center cut.  And our tax liability this year? Zero.

So the TechSmiths get all the advantages of the Federal government, including defense and highways and... you name it... and they aren't paying for a bit of it. Since our earned income is very low, we've paid next to nothing for Social Security this year... but we're receiving a benefit. (I know that we paid into the fund all those years we worked.)

I'm saying that although our income is not especially opulent, we have money to meet our obligations, fund charities as we wish, and could afford (with good management) to pay taxes. I know that because the government deducted $3,500 from our various income sources and we made-do without it. Then we filed our taxes and got it all back.  Woohoo! Party!

But should I exult in a nice refund? I expected to be taxed and I wasn't.  I feel I should have been taxed: my family consumes services and they have to be paid for.  Why shouldn't I pay?  But I'm like you - just one citizen. If I let the government keep the $3,500 it won't hold back a tenth of a second on the Debt Clock. It's only if all the people like me, in their millions, each pay the $3,500 that we can arrest the Debt Clock (for a little while, at least.)

So, TAX ME!!  I deserve it!