Saturday, May 03, 2008

The Reality of Taxation

Americans have historically been fearful and suspicious of paying taxes. This comes as no surprise to any of you, I am aware. From the American Revolution through today, speaking out against high taxes is a sure-fire applause line and thus no candidate for office would be caught dead advocating for its increase.

Rather than lamenting the fears, ignorance, and prejudices of those who are hellbent against anything the least bit suggestive of an increased tax burden, let's try to look past rhetoric for a moment.

It is a traditional Democratic talking point to invoke populism and tax burden, particularly populism's sounding cry: the rich must be forced to bear and shoulder more of the burden.

While it is true that the economic policies of George W. Bush have benefited the haves at the expense of the have nots, what is often forgotten is the reality of taxation.

  1. If the richest 1% of all Americans paid the majority of their income in taxation, it would not even make a drop in the bucket regarding our deficit. What would result instead would be a wholesale transfer of funds to other countries, off-shore accounts, and a multitude of wealthy tax-evaders who would use dubiously ethical (but still nonetheless legal means) [loopholes] to avoid paying into the system.

So raising taxes on the wealthy is not much of a solution. They won't pay their fair share no matter what strategies are proposed and implemented.

  1. The middle class pay the greatest share of taxes. Thus, is it surprising that so many people vote with their pocketbook? Political allegiance, devotion to candidate, and passion aside, most people who aren't political junkies and amateur policy wonks vote based on the simple premise: What will YOU do to help me out?

The other, cynical side of this premise is---Who will screw me over the least?

Raising taxes is no panacea. Smarter government is the solution.

I do believe government has a moral duty to assist and regulate businesses and individuals, but what I object to strongly is throwing money at a problem or increasing red tape and needless complications.

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By this point, Democratic voters have had ample time to make up their minds between either Obama or Clinton. The next fight will be for the votes of independents, who need to be convinced why voting Democratic in November would be to their benefit. The all-important swing votes that will decide this election may find McCain an attractive alternative to either candidate.

So whomever secures the Democratic nomination better make a compelling case to independent voters or we will have another four years of GOP control of the executive branch.

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