Taxes

I wanted to write a post on something that affects all of us. Taxes. Yeah, I said it, taxes. Before you act bored or bothered, give me a minute. Sometimes I think about how there are certain inequalities in America and what is done to fix these problems. And in some of these cases, appropriate funding is the underlying issue. And in many cases, the main funding vehicle is taxes. I also think about all of the tax loopholes and how it appears that the wealthy have at their disposal, professionals for hire that only help them escape their taxes. And I also continually think about how America can help its citizens become prosperous and in turn allow its people to have the freedom to give more and contribute more both in time and money. Money isn't and shouldn't be the end goal in life. But to say that money isn't important is living in a denial that could be quite harmful in this day and age (financially, personally, maybe even spiritually). So what else is there to say? Well, I've got more... Now let me also say that my beliefs are based on experience and what I've observed over time. It doesn't mean that I'm some big tax guru or that I've ever been employed by the IRS (I haven't). But I also believe that it is my right and in my ability to say what I think is right or believe. And, if at the very least, someone else out there begins to ask questions and search for their own answers, I think something worthy has been accomplished, so here we go.

I think part of the issue of taxes should be what does a citizen or resident owe the society in which the person lives. In other words, what is my cost to be a member here? Does that cost vary on whether I earn more money? Does the cost change if I'm a good person and contribute my time to worthy causes? Is my cost more if I'm a jerk or a felon? Honestly, I think the basic cost should be the same for everyone. I don't someone should be punished and forced to pay more simply because they have toiled when others haven't and as a result, have become financially successful. I also don't think the poor should pay a greater percentage of their income because they couldn't afford to hire the best accountant or attorney to help them ease their tax burden. And I don't think trying to reward good people or punish bad people would work since that is such a subjective issue. So in a roundabout way, I think flat taxes are a good thing. In other words, everyone pays the same percentage of their income to their state and federal government. Think about the fairness of it. The rich guy can't sneak through some loophole and only pay 5% of his income while someone living hand to mouth is figuring out how to live after the government takes its cut. Everyone pays a fixed percentage. No questions asked and the tax forms get really simple. Think about it. Every April is all of a sudden much less stressful. And think of all of the government beuacracy that would be eliminated? Somehow I think the savings would be enormous.

So what about the taxes on investments? I think they should go away. That's right, what you make selling your stocks or real estate should be yours. And why not? The government is already taking a percentage off the top of your total income anyway with the flat tax. Why should there be any other tax on what you rightfully make when you've already paid your tax? Think of all the people that would suddenly become more industrious or begin to study real estate investments, stocks or personal finance. With Americans saving less than 0%, the government should be thrilled at this. The government wouldn't be on the hook for Social Security or have to bother itself as much with what people will do when they retire. If the government gives back huge sums of money (which it would effectively do if capital gains taxes were repealed), all of a sudden Social Security can go away and there wouldn't be the same issue if senior citizens are selling their homes for possibly hundreds of thousands if not a million more than what they originally paid for their home or property. All of a sudden there is some serious incentive to get on the ball and become an owner of property, land, stocks, companies, investments, etc. People of all backgrounds have incentive to get back in the capitalist game. It opens the gates for all people to compete in the free market system. Essentially it brings us back to the roots of what America originally was in the beginning.

Again I think I should say something about the fairness issue. Everyone is paying the same percentage of their total income into the system. There would be no loopholes. And if there was to be a loophole, it would only be allowed if the issue went to a vote by the people. And to make matters more simple, only one loophole or issue could be presented to the people at one time. That is, there would be no pork barrel issues bundled into the proposition. Again, I think this may be the most democratic taxing strategy available. No loopholes, you pay what you owe, and you're free to make some serious profit if you've got the inclination or determination to do so.

And last but not least, the only other issue of taxation that I can think of is the estate tax. I do think (besides the flat tax) that the estate tax should remain. I don't believe that America was meant to be an aristocracy with rich ruling families. But if you take a look around, it does appear that this is in fact happening. How many Senators and representatives are currently serving whose father was a prominent figure in business or politics? It seems that there are quite a few. With an estate tax, wealth redistribution would occur on some level. How much the tax should be could be decided or altered at a later date. But, wealth should not passed down from one generation to the next unimpeded. That in itself could threaten the free society in which we live. An estate would remain as some form of protection against an elitest society.

So there you have it, my thoughts on taxes. Hopefully you'll begin to question the randomness and ineffectiveness of the current system. If so, maybe positive change could someday become real.