Tuesday, January 22, 2008

“We Want Another Reagan Conservative! What? No We Don’t." A Treatment on Taxes and Other Money Stuff.

Ignore political and conservative biases for a minute, we are gonna try to work this out using simple logic. The Facts as I see them are these.

The United States is neck deep in national debt. None of our thinking citizens wants this.

Many conservatives favor stuff called supply side economics, or Reaganomics, or basically tax cuts for the rich to make more money.

The gap between rich and poor widens.

Celebrity worship and greed fueled a now bursting housing bubble.

Government spends too much money, much of which is wasted.

I’d like to say first of all that I am not one of those dorky single guys that live at home with their mom. I live 2200 miles from my mom. I don’t sleep between Star Wars sheets, I don’t own a video game younger than ten years old. I have two associates degrees and a job. My wife has two bachelors degrees and a job. While I work only part time, my wife and I are paid adequately for the specialties we both have. I’m not trying to brag here. I am just trying to say that I understand fully what it takes to make a life. I am not some moron whose mouth runneth over and has no idea what they are talking about.

On the other hand, guys who come up with supply side economics are guys who have degrees in Political Science. That’s right, not economics, not math, they are fully equipped to be politicians. A few definitions should follow. Supply side economics is essentially the belief that if you make incentive to produce products by lowering taxes on the producers, you will get enhanced economy as a result. It is really saying “we’ll let you keep more of your money, so you should invest it so you can make even more money which we’ll then take our share of.” The past two double term republican presidencies have been big into this, also recessions. The basic problem is this: If you give someone more money, chances are, they’ll just want more money. More money is usually gotten by laying off people, paying people less, and moving production over seas, and likely a combination of all three. If all the money moves overseas, then we don’t get any of it.

We poor people (read “middle class”) don’t understand this. Why? Because it doesn’t make any sense. If you want more money, you take more taxes. The reason why the conservatives tell us that it is working is they cut taxes in one area, then look at all revenues to see the result. Sure, the US is taking in more money than ever before, but it is not coming from the area where they cut taxes, which as you might imagine is bringing in less money. It makes sense. It’s like saying “I’ll plant less corn in the garden this year” and then taking the gross weight of the production of the whole garden and then saying “Wow, look at all the new corn we have by planting less.” You aren’t making more corn. You are making less. The difference is, you can distinguish corn from peas, dollars all look the same. So when a politician tells you there are more dollars, you automatically think, “Well, I don’t understand it, but it seems to be working!” Additionally, it doesn’t matter that we are taking in more money than ever, we are also more in debt than ever, go figure.

I have a friend in our church small group who always brings up the “punishing productivity” argument whenever we have this discussion. He says that keeping taxes high on the rich punishes them for working hard and making more money. Since we are making sense today, I’ll admit, that does make a little sense, but only a little. However, every dollar has two sides. If you lower taxes on the ones who can afford it, you punish those who cannot. What it says is “Oh, you have money, here, have some more,” and “You over there don’t have much, give me some of it.” Do you see the problem? You may be rewarding productivity, but you are punishing misfortune. Most physically hardworking families whose jobs are strenuous but not well paying are not there because they don’t work hard. They are not being supported by welfare, they are not popping out kids left and right so they can get tax rebates and welfare checks. The whole “working hard” paradigm is completely meaningless. Working hard does not equal more money. The hardest work I’ve ever done paid well less than $10 an hour, and the easiest work I’ve ever done pays more than that. What’s the difference? Education, skill, perseverance, paying dues, work ethic, opportunity, and actually enjoying the work I’m doing. I would also like to say from a spiritual perspective that giving tithe, offerings, and works of service to God makes a ton of difference as well because he is the one who makes that whole list up there possible. See the book of Malachi.

This Supply Side Economics, or Reaganomics, or Trickle Down Economics stuff is just bogus. I don’t remember who it was that said this, but it is not the rich who are owed because of their success, it is them who owe us who made them successful. You can’t get rich by yourself but you need underlings, people whose work you profit from. No one person can have the skill or more importantly time to be every employee of a multi-million dollar company. There is almost always someone profiting from someone else, and the some ones who make more money should have to pay taxes at no less a percentage rate than the person from whom they are profiting.

It is not like buying toilet paper bulk, so you actually pay less per roll. In fact it is the reverse. Let’s just assume a 10% tax because it is easy to calculate, in reality it is much higher. A person making $20,000 is not very able to pay $2,000 in taxes, while a person making $2,000,000 is very easily able to pay $200,000. In the same way, a person is more able to pay $10,000 if they make $100,000 that if they make less. It is very simple. In fact, if a person making $2,000,000 can live like a person making $100,000, which anyone can, then they can afford to pay far more. Of course, I am not suggesting that we force people who make a lot of money to live as if they don’t, but I AM suggesting that they do it themselves.

The big overriding problem above all this is the problem of people with money, oh, I mean people with our money. If the government wants to cut taxes, please do, but you must also cut spending. I don’t have any credit cards, so I really can’t spend more than I have without immediate consequences. So we live what most of us would call “within our means.” Why can’t our government do the same? All of the presidential candidates right now are proposing new spending when we already are having a deficit every year. And all the republicans are proposing tax cuts. What nonsense! All of it is nonsense!

The solution.

As far as taxation goes, I can see no better option than the Fair Tax. The more you can afford to buy, the more you can afford to pay, and there are no arbitrary percentage rates for anyone. If you buy a $20,000 car, $4,600 of that is taxes, if you want to buy a $100,000 car, $23,000 is taxes. So simple. Please, buy a $10,000,000 house, we need the $2.3 million in tax revenues. It works everywhere. If all you can afford is a $2 box of macaroni, then all the tax you’d pay is $.46, but if you want a $40 steak meal, then you pay $9.20. It is just like giving a tip, only slightly more than we would often give, but hey, it’s taxes! I know it is hard to really work out the math, but, you must stop to calculate that the value of money will be different. If you were to make $40,000 a year, right now, that is something like $28,000 after taxes. With the Fair Tax, if you were to make $40,000 a year, you would be making $40,000 a year. Wow, that was easy, and there wasn’t any stress in April.

Tax this!


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