Tax reform?
It seems every GOP presidential candidate now has a tax reform plan. Guess who it favors? Their reforms are all various schemes for shell games designed to redistribute wealth from the middle class to the wealthy, of course. No one wants to tax the poor because even the GOP knows you can’t squeeze blood from a stone (of course, they still won’t raise the minimum wage either). But at least the GOP is up front about enriching the elites and robbing the middle class. The Dems just might be worse because they blather double-speak about helping the middle class out but are beholding to the rich and their special interest groups and lobbyists. Only Bernie Sanders has eschewed the largesse of the rich elites. I wonder how long he’ll last.
Wealth redistribution via taxes is insidious. First, there’s the infamous payroll tax. If you’re receiving wages from a company or the government, you’re taxed. But many members of the rich elites pay less tax than you do because of loopholes and other ways accessible to them because they are NOT on a payroll. Even a poor fast food worker receives a paycheck that has state and local and often city taxes deducted. S/he might get it all back at the end of the year, but meanwhile s/he’s giving a zero-interest loan to the U.S. government. And none of this discussion considers percentages. They’re completely skewed to favor those payroll workers making lots of money, like in high tech. And don’t forget FICA. There’s a cutoff for that. Eliminate it, and Social Security and Medicare would never have any problems keeping up with retirees!
Although I disagree with the percentages, payroll taxes are somewhat progressive. The worst taxes are regressive: sales tax and property tax are the worst culprits. An elderly person in this country who paid off her/his mortgage years ago can still lose her/his house because property taxes are levied on the “market value” of the property. This is an unfair and ineffectual way to finance city services like schools, police and fire departments, and other infrastructure. Beyond licenses and fees for construction and capital improvements, there should be no property taxes. There should be a city-wide progressive income tax, a tax on what you earn or own based on progressive percentages. Living in a McMansion means you make more and own more, so you should pay more. Your poor retiree neighbor down the street, who lives in a small house (maybe you bought two of those lots to make your McMansion?), should pay her percentage according to her means. Or, do you want her to have to move to the boonies to survive? That would get rid of the old doddering fool, right?
Some states opt for a hefty sales taxes and little or no property taxes. That’s a ridiculous policy. That’s replacing one regressive tax with another. There are many things any person must buy that shouldn’t be taxed at all (some states, in all fairness, make that allowance, for things like food and clothing). I’m all for sin taxes (sure, tax the hell out of liquor, tobacco, and recreational marijuana), but all other consumptive taxes should either be zero or reduced simply to licenses and fees. For example, when you buy a car in NJ, there are licenses and fees involved, but why should Governor Christie collect sales tax on something essential for life in NJ like a car. That should include gas for the car too.
Politicians with their evil double-speak are trying to disguise sales tax increases by explicitly calling it a “consumption tax.” The name I suppose emphasizes the argument that those who consume more should pay more. Sounds good, right? No, it’s a scam. Here’s an example of what happens: not long ago, the state of New York repealed a consumption tax AKA luxury tax on the purchase of fancy yachts. Even if I had the money, I wouldn’t buy a yacht because I don’t want to be associated with the people who own them—they’re generally sociopathic narcissists who buy expensive houses, cars, and boats to enlarge their penises. Don’t like that strong language? OK, let’s just call them status symbols for the rich and wannabe famous. The NY yacht discussion, of course, was an anti-progressive move engineered by a Democratic legislature and governor in order to pander to their rich sponsors, just more evidence that Dems favor the rich and stick it to the middle class too. This type of shenanigans goes on everywhere, in red or blue states—those who coddle the rich are color blind.
Back to the tax codes. The middle class is the perfect target for politicians, be they Republicans or Democrats, because most members of that struggling segment of society are on payrolls. It’s easy to pass laws about withholding from our payroll checks. It’s not easy to tax the rich because (1) they finance the politicians’ campaigns and (2) the rich can hire people who are experts at finding the loopholes, often specifically designed with the rich in mind, and evading taxes in questionable, immoral, but often legal ways (the legal system often encourages immorality in this country). The aphorism “it takes money to make money” should be edited to “if you have a good accountant, you’ll have more money to make money.” Our political system is now controlled by those who think in this manner.
The federal and state government codes are so complicated and changeable that even an expert can’t keep up with them. Simplification is needed. Some would propose a flat tax. While that’s simplifying to the extreme, it actually is far from being progressive. Take a nice round number like 15%. Taking 15% out of some workers’ pay could imply homelessness or even malnutrition and starvation. Warren Buffet would hardly notice it, though. The only way I see to make a tax code fair is to eliminate all the loopholes for everyone and make paying taxes equal pain for everyone. That implies a heavier percentage for those making more money. It also implies eliminating all caps, including those on FICA.
What about corporate taxes? Pfizer just bought Allergan and will move their HQ to Ireland where the taxes are lower. How is that fair, even to their competitors? Pfizer should still pay heavy corporate taxes just for the privilege of operating in America. Every company should, whether HQ’d offshore or not. That’s a loophole should be eliminated. Maybe they should even pay a higher rate. Along that same line, companies that move overseas to enjoy a cheaper labor pool should possibly pay a higher rate too. Pfizer’s argument that money saved on taxes can be invested in R&D for new drugs is just a big con. The U.S. government should not operate a charity for corporate America.
Pfizer and other corporate miscreants belonging to that nefarious group called Big Pharma should never receive any kind of tax break. Most of the time they should be penalized with fines and suffer price controls. These are the same corporations who leverage off research in universities and the NIH (guess who pays for that!) and then saddle the middle class with drug costs higher than any other industrialized nation in the world. One of the reasons we spend more per capita on healthcare than other countries is that companies like Pfizer and the healthcare insurance companies overcharge consumers for drugs and services. It’s out of control—heavy taxes on these immoral players in our healthcare system are justified. We certainly shouldn’t let them play on our playing field if they scarper to places like Ireland just to avoid taxes. I’d make sure their taxes were punitive in that case.
Fairness is the key word here. The present tax code isn’t only unwieldy, it’s unfair to many persons and corporations alike. It also favors too many corporations and rich individuals alike. While these latter corporations and wealthy Americans have their lobbyists to push for a beneficial tax code and congressional sycophants eager and willing to listen to them and do their bidding, they aren’t doing their fair share in financing federal, state, and local government. That must change, by legal battles in the courts if necessary, and the sooner the better. Where’s the ACLU when you need them?
And so it goes….
