Will Rogers said that when Congress makes a law, it’s a joke. And when it makes a joke, it’s a law. These days, when the president makes a budget it’s a joke. Because Congress won’t even read it. I don’t blame Congress. For a simple reason — the economy struggles big time. Yet the […]
Will Rogers said that when Congress makes a law, it’s a joke. And when it makes a joke, it’s a law. These days, when the president makes a budget it’s a joke. Because Congress won’t even read it.
I don’t blame Congress. For a simple reason — the economy struggles big time. Yet the latest budget calls for 10 major tax increases. Have big tax increases ever juiced up an economy? Nope.
There is a larger joke. And it is a cruel one. It is our tax system itself. It abuses you. Belittles you. Insults you. Moons you. Scorns you.
It has a million provisions. That is abuse number one. But the complications bring on more abuses.
For instance, vested interests buy tax breaks. We all know this. They funnel money to politicians. In return, politicians add tax breaks — for those entrenched interests. Surprise, surprise. Or they eliminate provisions that the interests don’t want. All, in return for the money. Nobody in these deals is looking out for you.
Meanwhile, politicians use the tax code to punish enemies. Lately it is “the rich” who have earned their lashes.
Here is a good example of this: President Obama got Congress to raise the tax on capital gains. That is, on profits folks make when they sell assets. His new budget plan asks Congress to raise the capital-gain taxes further.
Now, the whole world knows what happens when you raise taxes on capital gains. You get less revenue from the taxes. Why? Because people cut back on their buying and selling. An interviewer once asked the president a simple question. The tax increase would bring in less money, so… why do you favor it? Obama replied that it would only “be fair.”
So the president does not want to use that tax for revenue. He wants to use it to punish the rich. Or, to be seen doing so. That is a typical abuse of the tax code.
Meanwhile, politicians constantly try to use the tax code to re-shape society. They help these guys, they thwart those guys. They promote this interest, and damage that one. They slip in this provision, and remove that proviso.
Our tax system should not allow such garbage.
We know politicians have lately used the IRS to hurt conservative groups. We know pols order up audits of their enemies. We know they leak tax returns to smear candidates. We know big businesses buy provisions in the tax code. They help themselves and harm small businesses that compete with them. Abuses, one and all.
The worst abuse is of you. Good chance you have to pay somebody to do your tax returns. If you phone the IRS for help, you might get it. You might not. The people on the phone at the IRS are wrong half the time. I suspect they are distracted. Trying to figure out their own returns.
If you run a business, you pay thousands to have your tax returns prepared. If you do your own taxes, you may spend more hours than it takes to paint your living room. This is outrageous.
We are supposed to be an advanced country — with smart people. When it comes to tax systems, we are cretins. Many countries have simple systems. Their people need no consultants. They pay no tax-preparers. They spend nothing on fancy plans to lower death taxes.
In those countries, you earn this much, you pay that much. Done. Their taxpayers think we are nuts. And we are. Our system is a dog’s breakfast of complications. You earn this much. You deduct this, not that. You get a credit here, not there. You depreciate this. You add a surcharge here. You pay extra here, because you are above this threshold. You can deduct this, but not that.
These complexities are abusive of you. They are tools for those who would abuse you more.
The fairest move for the most people would be to replace our monstrous tax system. Replace it with a simple one that everybody could understand. This would shrink the IRS. That would be really fair. No joke.
From Tom...as in Morgan.
Tom Morgan writes about political, financial, and other subjects from his home near Oneonta, in addition to his radio shows and TV show. Contact him at tomasinmorgan@yahoo.com