Why We Must Keep Tax Reformation Relevant
By Laura O’Halloran
From Priority to Back Seat
The TEA Party movement began as a groundswell of Americans who were fiscally fed up and “Taxed Enough Already.” In the process of having to accept the proposal of socialized health care and increasing tax burdens through every major department of our growing government, the mission of the movement across the country seems to have become pulled into every direction as more issues have surfaced through the tireless efforts of digging and research by motivated citizens. That is not such a bad thing, as we have been able to make connections and identify resources as to the “why’s” and the “who’s” behind the subjects deserving of our angst.
Along with the good stuff comes the bad. Many have left their local tea party as the dynamics quickly changed with the politicizing and power grabs from those on the inside as well as outside. As members make decisions on where they stand in the grand scheme of American politics, necessary and unnecessary fighting ensues, resulting in the shifting of the very core of the movement. Each one of us brings talent and knowledge to the table to propel our individual groups, and sometimes along with those talents come personal and organizational agendas that have been a mix of interesting experiences to say the least. Nevertheless, we need to get back to our original angst. The same angst that Rick Santelli passionately vented on the floor of the Chicago Board of Trade in early 2009, which has been dubbed as the “shout heard ’round the world,” and instantly sparked the modern day Tea Party movement.
It is time to refocus! I miss the days of tax reformation being a priority of the movement and I’m not just saying that because it happens to still be my agenda. Every issue that we are facing today, still is and always will be, relevant to the subject of our federal tax system. The presidential race of 2012 is still about the fiscal responsibility, limited government, and health of the free market system. All other issues pretty much fall in line with these core values, and they can be addressed effectively through changes easily made to our federal tax code. Yes, I did say “easily.”
If We Continue On This Path…
We should be reminded too, that if our current POTUS somehow finds a way to win re-election, what type of “reformation” we will have crammed down our throats within the next few years. A European Value Added Tax (VAT) system is what we will have in addition to the graduated income tax. VATs are layers of taxes added to the price of a product in the production process – from raw materials to the store shelves. A value added tax system is top heavy, as it allows federal tax burdens on corporations to be raised at any time for any reason without the consumer knowing what is going on -much like the boiling frog analogy. This will not only drive prices of products UP considerably as it naturally be passed on to the consumer, but will also lower the value of our exports among many other side effects we do not want to experience. We already have VATs and are currently paying an average of 22% of embedded federal taxes in what we buy and this system is anything but transparent. VATs also allow the government to manipulate consumer behavior by picking winners and losers in industry. So much for the free market system when government dictates what you can or cannot buy.
As for the graduated income tax – we know that it is the second demand of the Communist Manifesto, after the first demand of abolition of private property. Your wages – the fruits of your labor – ARE your property. This includes wage earners, investors, savers, businesses, etc. We are currently wasting hundreds of billions of dollars a year just to be in compliance with the IRS! According to the Tax Foundation, Americans will pay over $4 Trillion in taxes – nearly 4% more than what we spend on necessities such as food, clothing, and housing!
When we recently found that America is now the home of the highest corporate tax rate for businesses, Senator John Barrasso of Wyoming announced, “America’s business tax rate now tops out at 35 percent. Add state taxes and American job creators face a median rate of 39.2 percent.” This proves that our current system is NOT business friendly. America is supposed to be a leader in the free markets, and how hypocritical it is of us to choke our own small businesses at the same time.
What about the “pay your fair share” rhetoric? Our current tax code is over 72,000 pages. It grew like a weed from the original flat 1% tax levied in the beginning. How did this happen? Half of the lobbyists in Washington are tax lobbyists. They are wheeling and dealing, creating loopholes and exemptions for those nasty one percenters! But can you blame them? If you wanted to stay in business and maximize your position in the market, provide jobs and quality products and services, you would do what you could to game the system as far as the law allows. However, someone needs to pay the bill – and as I described earlier, you will pay the remaining amount within the price of the products in the form of VATs, and the middle class and small businesses get dumped on in the form of several different types of income taxes – personal, capital gains, alternative minimum, gift tax, estate tax, self-employment, corporate, and payroll taxes. Feeling that angst again yet? Here’s more…
Let’s think about the fruits of your labor – your wages, earnings, sweat equity, compensation. According to the 16th Amendment, the government is placed as the middle man between you and what you produce. It decides how much you get to take home to provide for you and your family. Never thought of it that way, huh? Well, I’m not done. As the middle man decides how much you get to keep, you get a chance once a year to ask for the difference from which they took too much of from the beginning. It’s like a game of “hide-n-seek.” You may even need to pay someone to help you ask for it after a long search of credits and deductions, loopholes and freebies – depending on your living situation of course because some people get more breaks than others. Now all the while the government has been keeping your earnings, it has been investing it and earning interest – off of your sweat equity. Will they give you a cut in the return? No way, Jose! So now how do you feel about that “refund?”
So the great 16th Amendment applies to ALL Americans, right? Well, it applies to all individuals and businesses that keep their money within our borders. When the wealthy and larger businesses are making money and sheltering it in other countries in offshore accounts, the IRS cannot touch it. Additionally, remember the “Made In The USA” label? It has been replaced by Peggy – our new customer service representative. Many corporations have outsourced our jobs to foreign countries to beat the IRS at their game. In fact, the IRS has done its job of chasing away $11-$15 Trillion – yes, TRILLION, out of our country! It even matches our national debt.
We must keep tax reformation in the conversation. We need to STAY TEA’D and explore the options we have that are right in front of us and seize the opportunity to eliminate many of these problems that we have forgotten which started our frustrations in the first place. We can refocus our efforts that we have made in the last several years, or, we can keep Peggy happy and employed.
In Part II of my discussion, I will share the options and possibilities that can make America great again, and how it is up to US to make it happen. Stay tuned…and stay thirsty, my friends.