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The Real Problem with the Tax System
by Andy Obermann
21 April 2004

No matter what tax system we have, it will take a little more than a new name to remedy the situation in Washington.


With the dreaded April 15 tax deadline having come and gone, I thought it would be interesting to have a little discussion about the topic while it’s fresh in your mind—or as the empty feeling in your pocket is just beginning to fade.

In the past week or so, several timely people have made mention to their strife and exorbitant tax rates.  They’ve informed me on programs such as the Flat Tax, the Fair Tax Program and the National Sales Tax System, all designed to alleviate problems associated with our current graduated income system.  The key problem that many seem to be missing is the fact that no matter what tax system we have, it will take a little more than a new name to remedy the situation in Washington.

Let’s look at some stats.  Currently, a family of four (husband and wife + two kids) making $100,000 a year in a major metropolitan area, living in the suburbs, are considered wealthy.  This family is going to pay nearly 30% of their income off the top to the Feds.  And, like magic, we’re down to $70,000 net income.  Then the state gets their cut.  Let’s say this family is living in Kansas City, MO—knock off another $6,000 for state taxes and between 5-7% for local ($6,000)—and you end up with about $58,000 net income. With a mortgage, car payments, everyday bills, and two kids to raise, it hardly seems like enough. 

Many people will claim that this is cause to lower tax rates and renew the whole system.  I too agree that something must be done.  Realistically, however, Americans need to renew their thinking on what should be done.

In the 1950s, government operated on a budget less than $80 billion.  Today the budget deficit is nearly six times that amount.  The deficit!  Granted, America has undergone some major changes from then to now, but come on!  Population increases must be accounted for, but, I ask, were the needs of Americans only 50 years ago any less than those of today?  The reality is that they weren’t.  The difference is they were more self-reliant.

Prior to 1960, there was no Social Security.  There were no Food Stamps, no Departments of Education, Health, Energy, Housing and Urban Development, or Transportation, let alone the hundreds of government funded agencies set up to promote our “best interest”—as if we can’t figure it out for ourselves.  And the departments that did exist back in the ‘50s have been built-up and exploited to the point of collapse.  This is not what the Founding Fathers envisioned—they knew that these avenues were better controlled by private industry, but we missed the point.

Today, we can hardly imagine a country without these facets.  Are we better off because of them?  Maybe, maybe not, but they have undoubtedly led to the creation of a huge bureaucracy—a practical government monopoly on nearly every major industry.

To maintain a monopoly, one has to feed it.  Monopolies are fed with money; government gets its money by imposing taxes and extracting them from you with the threat of force and penalty.  In robbing your economic liberty, the system just keeps rolling along, from the “Great Society” to the “War on Poverty.”

And, don’t get me wrong here; Republicans are just as bad as Democrats in this situation.  The only difference is Republicans will take a little less of your money; Democrats will take a little more.  Democrats will institute social control via “national interest” projects and create massive deficits; Republicans (of late) will build even larger deficits with their apparent lack of fiscal responsibility.  It’s a major Catch-22—the better of two evils, if there ever has been.

So, what’s the answer?  Well, it really is quite simple.  Complaints about the tax code and reforms, thereof, do us no good unless we recognize the underlying causes of its failure.  If we, as Americans, have a true fundamental problem with paying so much in taxes, we must begin by phasing out our dependence on the federal government as the solution to all our woes, and look at it as what it is—a source of them.  We have to cut the federal government down in size to regain our personal economic liberty.

Will it hurt?  Yes.  Radical changes like this will be felt nation-wide and will take time to make, but in order to revert to the government that the Founding Fathers had envisioned for us, we must to act to curtail this socialization of our government.  If we fail, the ramifications on our economic liberty will be overwhelming.

Andy Obermann is majoring in History and Secondary Education at Missouri Valley College
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