We will be going through a random hodgepodge of different taxation stories that arose in the past few weeks, all of which prove that: 1) we pay way too much in taxes for the lousy quality and quantity of government services we get in return, 2) the political class and the government they operate wastes so much money and taxpayer wealth on inefficient, criminally infested, and unneeded programs, and 3) we have probably already passed over from heavy taxation into pure oppression.
1) Let’s start this random walk through the taxation jungle with an article that appeared in the Independent Journal Review, 9 Facts About Taxes That Will Have You Looking Into Getting Stranded on a Desert Island, facts that are likely to make you either crazy or enraged:
#1: There are more than 72,000 pages in the federal tax code. That’s more than 146 times the size the tax code was in 1939 and about 26,000 pages longer than it was just 14 years go in 2000.
#2: It will take the average American worker 111 days to earn enough to pay their taxes. That day, which lands on April 21 for many but varies by state, is called Tax Freedom Day. Tax freedom day in 2014 is five days longer than in 2013, indicating our tax oppression is getting worse, not better.
#3: Over 300,000 federal employees and retirees were found delinquent on their taxes. A report published by Senator Tom Coburn, found that these Federal employee tax dodgers owe the Federal government $3.5 billion in back taxes. Coburn’s report also found that the number of Federal employees not paying their fair share of income taxes was increasing over time as was the amount of their unpaid Federal income taxes.
#4: Federal taxes push 7 million childless Americans into or further into poverty. The Center For Budget and Policy Priorities, using U.S. Census data, found that Federal taxation pushes 1.2 million childless Americans under the poverty line and 5.8 million childless Americans further under the poverty line.
#5: In less than 20 years, the Social Security program will likely be insolvent. In reality, the Social Security program is already insolvent, paying out more than it takes in from a cash perspective. This point talks about the accounting trick of the Social Security Trust fund, a trust fund that is really a giant Ponzi scheme.
The real crime here is that the Social Security Administration loses over $100 billion a year to waste, inefficiency, and criminal activities. That is why it is running out of money, the political class cannot run an effective and efficient program for retirement despite collecting trillions and trillions of tax dollars over the years.
#6: Payroll taxes are out of control. Payroll taxes are growing very, very quickly as a percentage of total taxation as the baby boomers age and retire, driving up Medicare and Social Security taxes. This trend is unlikely to naturally slow since the growth in baby boomer retirement is growing faster every day while the political class gets slower and less creative in problem solving every day.
#7: Most Americans’ taxes went up this year. This is due to the fiscal cliff deal raising payroll taxes, as well as Obama Care’s 3.8 percent net investment income tax and 0.9 percent Additional Medicare Tax. In a quirk of the voluminous tax code, the lowest earners and the highest earners in America this year will both see the greatest increase in their effective tax rate and the greatest decrease, on a percentage basis, in their net income after taxes. This is despite the fact that the highest earners in the top quintile of American workers pays more than 16 times the effective income tax rate of the lowest quintile earners.
#8: You probably pay more in Medicare and Social Security taxes than in income taxes. People can talk about having a “safety net,” but there’s a flipside to that: a lot of money lost to the government could be used by people hoping to start businesses or save for college – lost opportunities.
#9: The majority of Americans feel that they pay too much in taxes. A long term tracking poll from Gallup finds that the majority of Americans think they pay too much in taxes. Could that possibly be because they do not get any quality services back in return for such high and oppressive tax rates? Why is that not reflected in our elected officials' actions and budgeting?
The Independent Journal Review article summed these findings nicely: While taxes are vital for a government to function, the government has an inherent duty to spend tax dollars in a responsible way, as well as a duty to reflect the will of its citizens when spending those dollars. Our Federal government is fulfilling neither of those responsibilities.
And neither are our Federal politicians.
2) While we may feel we pay too much in taxes, a recent Washington Examiner article pointed out that our politicians can still find ways to waste the billions of dollars we send to them every year, especially how there are so many stupid and wasteful tax deductions that the vast majority of Americans cannot take advantage of.
You can be sure that some lobbyist somewhere paid off some politicians to make sure these narrowly focused tax breaks got into the tax code, not because they were good for the economy or many citizens, but because they were good for a politician’s career:
1. Pet moving. If you get a new job, you cannot not only deduct your regular moving expenses but you can also deduct your pet moving expenses. Specifically, if you don’t want to take your pet with you as you drive across the country, you can deduct the cost of shipping them to your new home. Really, how many people does this effect and what is even worth the administrative time to write this idiotic deduction into the tax code?
3. Guard dogs and service animals. If you use a guard dog (or cat, or ferret or whatever) to protect your property, you can deduct expenses related to its care. Who knew that Fido could be such a vital part of your tax planning?
4. Clarinet lessons. You can not make this stuff up.You can deduct the cost of a clarinet purchase and resultant clarinet lesson costs from your taxes.
Why? Orthodontists lobbied the government for the deduction because playing the clarinet helps with the overbite. Obviously, the drum, trumpet, and other instrument lobbyists are not earning their money like the clarinet lobbyists are.
5. Whale, whale, whale, what have we here? If you happen to be a indigenous Alaskan with a whaling boat, you can deduct up to $10,000 for ship repairs, equipment and other whaling expenses.
As with the non-clarinet instrument lobbyists, the cod fishermen in the Northeast and the grouper fishermen in the southeast must also be extremely disappointed with their fishing lobbyists since they were not able to get the same favored tax treatment that Alaskan fishermen get.
6. Legal defenses. Shouldn’t being a criminal exempt you from using your criminal defense lawyer as a tax deduction? Just saying, paying for your crime should not be in the form of the American taxpayer paying for your legal defense.
7. Wigs. The cost of wigs can be deducted if they are purchased “upon the advice of a physician for the mental health of a patient who has lost all of his or her hair from disease,” according to the IRS.
8. B-I-N-G-Oh heck yeah! In some parts of the country, e.g. Long Island, bingo is extremely popular and as such, you can deduct your bingo losses just like any other gambling. Besides bingo, should we really be having the American taxpayer paying the expenses of someone’s hobby or addiction, depending on how one defines gambling?
This is what your Federal tax filing helped to subsidize and pay for last year.
3) Finally for today, consider some analysis that was done by the group, Americans For Tax Reform:
Since taking office in 2009, President Barack Obama has formally proposed a total of 442 tax increases, according to an Americans for Tax Reform analysis of Obama administration budgets for fiscal years 2010 through 2015. The 442 total proposed tax increases does not include the 20 tax increases Obama signed into law as part of Obama Care.
The number of proposed tax increases per year is as follows:
-79 tax increases for FY 2010
-52 tax increases for FY 2011
-47 tax increases for FY 2012
-34 tax increases for FY 2013
-137 tax increases for FY 2014
-93 tax increases for FY 2015
Two observations here:
- These tax increases, proposed and actual, comes from a President who campaigned on the promise that no American earning over $250,000 would pay a penny more in Federal taxes during his regime’s time in office. I maintain it is impossible to propose and/or pass more than 400 new taxes and not seriously and negatively affect the take home pay for those Americans earning under $250,000. It cannot be done, and as we showed above, it has not been done, especially with the lower quintile of American workers who are paying taxes at a higher rate and a higher total dollar amount. Thus, another Obama promise seriously broken or seriously deceptive.
- Notice that in typical political fashion, the lowest number of taxes was during a major election year where the Obama administration proposed or passed “only” 34 new taxes. Once the election was over, that rate went up four fold. More cowardice and deceptions.
That will do it for today in our tax round up. Today we found out that this administration is tax crazy, taxes are going up for every kind of American in every income tax bracket, the political class has wasted away trillions of dollars of Medicare and Social Security taxes over the years, endangering the financial solvency of both programs, hundreds of thousands of Federal employees are Federal tax evaders, there are way too many stupid deductions in a way too large and too complex tax code and your dog should be part of your tax planning.
Political class tax insanity at its worst. More gruesome details tomorrow of high taxes, low government service, and wasteful spending.
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