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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