A Very Taxing Question
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The very taxing question is, why should we, the people, the plebs, the minions even have to pay it?
Let’s start with Britain then. I know this is Mad Mikes AMERICA but I’m English and being so I am, as a result, slightly biased, so we’re starting with British tax. So there.
British taxation began in 1203, which is, sadly, the year 1203 as opposed to 12 minutes past 3 o’clock today. King John imposed a tax on wool. What he had against sheep is lost in the mists of time but then, in 1275, King Edward I introduced a tax on wine shortly before leaving for America to introduce prohibition.
That last bit about prohibition isn’t true by the way. Just so you know.
I know what you’re thinking, “Good grief! Norman’s actually ‘Googled’ to get his facts right!!”. Yes I have. There we go. My reputation for speaking complete gibberish several moments before my brain kicks into gear goes straight down the proverbial pan.
Quite a few other taxes popped up from Elizabethan times onwards but reading about them is just boring so take my word for it eh? One was a ‘window tax’ of all things in 1707 which resulted in a huge rise in profits in the brick industry as people desperately bricked up all their windows to avoid this particular tax. Many people suffocated or developed rickets due to a lack of air and/or sunshine as a result of having no windows at all.
Only some of the above is absolutely true. The brick / rickets thing is an uneducated guess.
Moving onto ‘tax as we know it’ 1798 was the fateful year when William Pitt the Younger decided it would be a wizard wheeze to tax British people to pay for the Napoleonic War effort.
It may well be that people’s patriotism along with the pleasure of beating up the French made this tax bearable. It was temporarily rescinded when Britain thought it had won, reinstated again when we realised the referee had blown early for full time and, after the Battle of Waterloo when we had actually won, rescinded again. However, the seed was planted in politicians minds.
“Hey chaps!” they said to each other, “what a cracking way to pay ourselves lots of money for getting elected, doing very little worthwhile and get huge pensions when we retire!”
Not a lot, well actually nothing, has changed since then.
Now the American taxation system is slightly different. It all kicked off in the 1760’s because America was a British colony and felt a bit pissed off about paying taxes back to good old Blighty. Perhaps understandably I suppose. I believe one such tax was related to whiskey so I’m not surprised their was considerable annoyance. Why should an American give their hard earned to Blighty for swigging a few shots? Quite right too!
Still, as a result of America gaining independence they didn’t have to pay any taxes to dear old Blighty anymore. They just had to pay so many different taxes – along with the obvious taxes such as ‘payroll’ and so forth – that accountants and politicians got even richer than their counterparts in Britain.
Basically, the British and American systems of taxation are identical. Not in their ‘make up’ but in their outcome.
We, the people, get poorer whilst they, the politicians and business leaders get richer.
Democracy eh? A government of the people for the people.
Almost reminds you of communism really. All people are equal but, as George Orwell wrote so accurately, “some people are more equal than others” – sounds a bit like Britain and America and, I guess, pretty much any other democracy.
I lost touch with my best pal from schooldays in our 20’s. My fault entirely. I thumped his brother in law to be at the wedding reception. He was an asshole mind you. In our early 50’s he got in touch via Friends Reunited. “About time we had a beer eh mate?”
It was a glorious reunion. He admitted to now being a multi-millionaire businessman. I admitted to being a union rep protecting the livelihoods of my union members from unscrupulous bosses. He admitted to being in a quite ‘legal’ tax avoidance scheme. I admitted that, being an employee, I had no choice about paying my taxes.
“I always knew you’d be a commie” he said.
Quite.
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A progressive tax is not the issue. Progressive tax merely means that a person making $20,000/year won’t pay, say, 10% of that paltry sum in taxes while a billionaire pays the same 10%. Why? Because what’s left of $20K after taxes is devastatingly difficult to live on.
But a progressive tax does not need to be a difficult tax. Our real problem is that tax code has been manipulated for many purposes…both greedy and altruistic.
Set aside the graft and corruption that enables corporations and the super-wealthy to pay little or no tax. Focus instead on the social engineering efforts that start out well and quickly become corrupted.
Tax breaks to employers as job creators sounds like a great idea, but it seldom works out that way. Tax incentives that urge investment of one type or another can backfire. And manipulation of the housing market has proven to be disastrous.
One clear example. I had a farm in the early 1980’s. Then US taxes provided for two incentives for capital investment. A 10% investment tax credit and the “accelerated cost recovery” (ACRS) for depreciation of capital goods seemed like a good idea at the time. But combined with high marginal tax rates for most farmers (bringing combined Federal and State income taxes near 50% on those last dollars earned) meant that only a fool kept cash. If you earned a dollar and kept it, you’d pay 50 cents in taxes. If you earned a dollar and used it to buy a new piece of farm equipment, you’d keep the 50 cents in cash and use the other 50 cents to buy the tractor. In other words, the tractor was FREE so long as you could pay the loan.
It doesn’t take much imagination to realize that every farmer and other small business leveraged themselves to the hilt and equipped themselves with equipment they didn’t really need. This was a HUGE economic boost for, think about it, the EQUIPMENT MANUFACTURERS and other producers of capital goods.
But, as soon as there was a bump in the road, the farmers and other business operators could not service their debt. They could not pay the loans, and many went bankrupt and lost their farms and businesses. So tax code drove business decisions rather than business needs driving business decisions. Sure, there were mega-tons of new John Deeres out there, but many were parked and idle, because the farm went under and the construction company failed.
But there were winners in this insanity. The early ’80’s proved to be the heyday for mega farms. The old family farms were scooped up for pennies on the dollar by the Cargills and others, and American food production was transformed (for the worse) forever.
So using the tax code for social engineering opens a Pandora’s Box of unintended (or, perhaps, diabolically intended) disastrous consequences for many.
A simple, progressive tax, with NO DEDUCTIONS for anything, would make sense, and I’d strongly support it. The sooner we get away from the ass-backwards efforts to “help” through tax breaks, the quicker we can turn to a system of social supports that are based on their merits and social conviction. Tax breaks do little or nothing for the poor, and they starve the government budgets by relieving the wealthy of their responsibility to support the nation that makes their wealth possible based on moronic concepts like “Trickle Down” theory.
I strongly believe that taxes are necessary for a civilized society. But taxes were never a reasonable tool for social engineering. Social engineering should come from proactive programs with specific goals and defined budgets. Using taxes to shape society is like pushing a rope. It makes no sense at all.
You’ve got my vote old bean. Still, you could never be a politician…..you’ve far too much common sense 😉
That’s why for years I have been a proponent of a flat tax. Everyone pays the same percentage of their income. No deductions, exemptions, or “shelters”.
http://slrman.wordpress.com/2010/08/04/90/
I’m a big supporter of a flat tax James.
Jim’s point below puts the mockers on that. It would mean the poorly paid pay the same percentage as the well paid….or at least that what it sounds like?
I am of the opinion that taxes are the payments required for living in a civilized society. It needs to be more than fair that those of us who have more money should be paying more in taxes.
That would seem fair, but it isn’t like that which seriously pisses me off 🙂
Precisely the point and the problem Jess. That’s the fair way so it isn’t THE way it’s done.
…you forgot to mention the relationship to death.
Only fun when a ‘tax man’ dies 😉