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Archive of posts tagged taxes
The Taxman Cometh… Again
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The Hits Just Keep On Coming…
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Baby Boomers Pay Too Much in Taxes… (Really, Phil?)
Baby Boomers pay too much in taxes. I really think this is an immoral situation in our culture. We do have to admit that things are considerably different from the period in history when we paid no income tax in this country. But this current situation is ridiculous.
I do think it’s safe to say that things have gotten out of hand as our government reaches into our pockets constantly to take more and more of our financial resources. The government passes go and collects $200 from us way too often.
Is this what the Founding Fathers had in mind? I don’t think they were comedians… this is a serious matter. This country of ours has provided opportunities for hard working Americans to become successful beyond the dreams of our ancestors. As we mature as a nation, we have learned to share the wealth with less fortunate citizens and we have always helped the people of other countries around the world (even the citizens of our enemies).
The United States is the standard bearer around the globe for “helping our fellow man.” Now I wonder if we have gone too far here in our own country. We can never go to far with our own individual resources since our Creator encourages that. But I do think our government taxing policies crossed the line a long time ago.
Is my government collected taxes supposed to pay for abortions? Uhhh, no. Should any of us help pay for a bridge to nowhere? How about illegal immigrants? Have you ever looked at a list of government expenditures? Appalling.
So, how did this get started?
Congress started a federal income tax in 1862 to support the Civil War. The average wage earner paid roughly 3% of income to the government. Soon to follow came a sales tax and excise taxes. The race was on!
We now see in this country that taxes of 50% or more (federal, state, and local) have become common for good income earners as well as the rich. How did we get here?
Misguided support…
One of our earlier presidents was asked about providing aid to a foreign country and he said that was the job of churches and support organizations. In other words, let the citizens freely decide what they wanted to offer for aid of any type. Don’t confiscate money from them through income taxes. It’s an individual choice.
Somewhere along the line our government jumped in with both feet to take over foreign and domestic aid. That decision is becoming a disaster for all of us. Our debt will soon be over $10 trillion in the good old USA. How do we take care of this staggering figure?
There is no question that God has blessed our nation over the years because of our desire to help others. But now we have taken Bible study out of our schools (formerly part of public school curriculum), we have taken the 10 Commandments out of public buildings, and anyone that prays to God is a right wing nut. Nice, huh?
What if God decides to leave us alone to stew in our problems? I have no magic number in mind, but it seems almost criminal that government taxing bodies take more than 25% of the income of any citizen. If we citizens decide to give another 25% to aid our fellow man, our churches, our communities then let us make that choice on who to help.
Do you agree? Let me know.
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It’s Best To Understand How the Whole System Works…
Our Tax System Explained: “Bar Stool Economics”
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (The poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that’s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.” Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free.
But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’ They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
“I only got a dollar out of the $20,”declared the sixth man. He pointed to the tenth man,” but he got $10!” “Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got ten times more than me!” “That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!” “Wait a minute, “yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!
And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
David R. Kamerschen, Ph.D.
Professor of Economics University of Georgia
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