Taxing America — Killing the Sacred Cow


This year’s presidential campaign has had the candidates, and their respective party, sparring over taxes.  The thing is, each side is being disingenuous in dealing with the public.  Each side knows that the majority of Americans have no idea of how our tax system works.  They count on that so they can pressure Americans into thinking that their particular brand of taxing, or not taxing as you will, is absolutely the correct way to do business.

There is a New Hampshire PAC this year that is running an attack ad against a woman who is running for office.  They detail how she, when she held office, was responsible for raises taxes, fees, on New Hampshire’s citizens.  I am certain she did what they said she did but this group would like the public to believe that she was horribly wrong in doing so.  New Hampshire prides itself in having no personal income tax.  But New Hampshire, like all the other 49 states, needs a revenue stream to fund governmental activities that its citizens demand of it.

In this year’s presidential race, the Democrats are trying to make hay out of raising the tax rate on the wealthiest Americans.  Republican Ryan has countered that such a tax increase will fund America for about a day.  That is probably close to the truth but is it the point?  Obama asked why is it fair that Romney’s 14% overall tax burden just as fair as his secretary’s 20% percent tax rate, and that is the point, fairness.

As much as I like the idea a fairness, an idea, by the way, formulated by Ronald Reagan, it cannot be a prime motivation for any tax increase, or tax decrease for that matter.  Romney has claimed he will reduce taxes on middle-income America by 20%.  The question that has to be asked of that is, at what price?  That is, if you decrease you revenue, which a 20% decrease is obviously doing, what are you going to eliminate to fund it?  Romney is strangely quiet on that point.  The Democrats would be better served by promoting a complete tax code overhaul, rather than offering a single fix.  The tax code is so complex, so difficult, that probably few, if any, members of Congress can claim much of any expertise in it.  To wit, there are high-priced attorney’s whose only function is to be expert in the tax code.  No politician, regardless of how committed, can give such time to the tax code.

Government, at all levels, needs a source of revenue.  It cannot operate in such an absence.  There are two ways, and two ways only, to get such revenue, taxes and fees.  All Americans must understand that as a basic principle of government.  Republicans are fond of offering up the idea of running the government like a business.  But that in an impossibility.  But if the must, they need at least describe such a business as being a “not for profit” business which in essence is the only kind of business model any government is allowed to employ.  Those sort of businesses require benefactors, contributors, and maybe even gate receipts to survive.

In a recent debate between Sen. Scott Brown (R-MA) and his challenger, Elizabeth Warren, the controversy over subsides being allow oil corporations was brought up by Warren, who, of course, wants them eliminated pointing out the hundreds of billions in profits the oil companies make.  In response, Brown pointed out, also correctly, that the loss of the subsidy would be passed on to the American public.  What neither of the chose to address is what that increase at the gas pumps would look like.  Why?  They do not know.  For a short while, to be sure, there would be a public outrage but that would die down quickly enough and another industry would be showing the public the actual cost of a gallon of gas, not the subsidised price.  Americans would be forced, God forbid, to recognize the real cost of motoring.

Neither party, Democrat nor Republican, has had the courage to tell Americans that government is an expensive thing.  They seem incapable to telling Americans that if they want to continue the level of governmental services they receive now, then they are going to have to pay for them.  That means there is no chance for a tax reduction but more likely, at least for a short while, a tax increase for everyone.

The only reasonable way to control taxes is to control expenditures.  Americans need to look long and hard at each and every government service out there.  They have to decide which to cut back on, which to eliminate.  They need to become more knowledgeable about how the government goes about its daily business, contracts, government employees, the relative necessity of the service provided.  It Americans truly want to get the cost of government under control, there can be no sacred cows.

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