Posted on 04/15/2002 10:03:42 AM PDT by Dick Bachert
Today is April 15th. This is the day your taxes are due for the year 2001. I sat down at the computer yesterday morning and just started hacking out some notes about Tax Day and the present state of affairs in our country. Read on as long as you like.
Most people don¡¦t know how much tax they pay.
Actually, this statement is becoming less and less true as we go along. The one group out there that really does know how much federal income tax they pay is that segment of wage earners who pay nothing. By design, this segment is growing larger and larger every single year. I should revise this statement to read ¡§Most people who actually do pay federal income taxes have no idea how much they pay.¡¨ If you don¡¦t believe it, just try this little test. Approach a friend or co-worker whom you actually believe pays some federal income tax and ask them how much they paid. You will most likely get one of two responses. For the majority of actual taxpayers, those who are receiving refunds, the response will be ¡§I didn¡¦t have to pay anything! I¡¦m getting some back!¡¨ For taxpayers who had to write a check today they will quote the amount of that check as the amount of tax they paid.
This is all by design. Politicians know that if those who actually pay federal income taxes had a keep awareness of just how much they were paying there would be an instantaneous and serious tax revolt. To mask the amount of taxes these wage earners pay the politicians have kept alive the system of withholding those taxes from paychecks. The money is gone before the wage earner even gets a sniff of it. It¡¦s almost as if it was never really there¡¦s in the first place ¡K so, what¡¦s to miss?
In fact, most folks don¡¦t even know how much they earn! Let alone how much tax they pay.
OK .. you¡¦ve asked your co-worker how much tax they had to pay in 2001, and they didn¡¦t know. Now ¡K ask them how much they make! Most will tell you it¡¦s none of your business. Some will respond, though, and their response will begin with the words ¡§I take home ¡K¡K. ¡§
If you wanted to be particularly obnoxious at this point ¡V or if you fancy yourself to be a radio talk show host ¡V you could say ¡§I didn¡¦t ask you how much you took home. I asked you how much you made.¡¨ Then ¡K stand by for the blank stare.
This is how well this system of withholding taxes has worked! The majority of wage earners can¡¦t even tell you what they earned! Just what they ¡§took home.¡¨ It¡¦s as if they viewed their ¡§take home¡¨ pay as their total earnings! No wonder they don¡¦t think they paid any taxes when they get that refund check from the IRS!
I¡¦ll tell you one group that DOES know how much tax they paid. The self-employed! The owners of small businesses ¡V the businesses that employ about 80 percent of the workers in this country ¡K they know. These are the people who have to sit down four times a year and write a check to the IRS for their quarterly tax payments. You ask these people how much they paid and they¡¦ll be able to tell you ¡K to the penny! By the way --- these people are a minority of the taxpayers, but they¡¦re most of the taxes.
Withholding was supposed to be a temporary measure
Up until World War II taxpayers would write one check to the federal government every year. That check would be for the tax they owed on their previous years earnings. There was none of this ¡§I didn¡¦t have to pay anything, I¡¦m getting some back¡¨ nonsense. Everyone knew just what he or she had to pay.
Along comes World War II and the government needs cash to produce ships, airplanes and arms. So .. how do you speed up the cash flow from the income earners to the government? Withholding! You get the employer to take the tax money out of the employee¡¦s pay check before the employee ever sees it.
Withholding was sold to the American wage earners as a purely temporary measure. As soon as the war was over things would return to normal and the wage earners would get their entire checks, just as before the war.
In case you haven¡¦t checked, the war has been over for about 58 years or so, but withholding is still with us. And along with the age of withholding came the age of ¡§take-home pay¡¨ and tax refunds which brought us the ¡§I didn¡¦t have to pay anything, I¡¦m getting some back¡¨ taxpayer.
Woe be unto the employer who tries to finesse the system.
Since the advent of tax withholding some employers have tried various payroll gimmicks to make sure that their employees knew just how much they were making and how much was being taken out of their taxes. One such gimmick was to issue the entire paycheck to the employee in cash. The employee would them be required to pay back to the employer the amount of tax due the federal government, as well as the Social Security taxes. Inevitably, when the feds find about what these employers are trying to do they put a quick end to it.
Bottom line ¡V politicians know that continued taxpayer ignorance is essential to their continued vote buying schemes.
Our founding fathers specifically avoided an income tax.
Alexander Hamilton is largely credited with framing those portions of our Constitution that deal with taxes and federal revenue raising. Hamilton was definitely not friendly to the idea of an income tax, preferring consumption taxes instead. Read the following quotation from Hamilton:
"It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. If duties are too high, they lessen the consumption; the collection is eluded; and the product to the Treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens of this class, and is itself a natural limitation of the power of imposing them."
You see the difference between income and consumption taxes here, don¡¦t you? Under an income tax the only way a citizen can voluntarily reduce his tax load is to stop producing and adding to his own wealth. Politicians know that most people are unlikely to take this step. Under a consumption tax you can reduce your tax load, and register your feelings that taxes are too high, by simply reducing or changing your consumption habits. You can do this without halting or slowing your production of wealth. Income taxes take almost all of the power away from the taxpayer and vest it in the politicians. Your only weapon is to stop earning income.
We did just find without an income tax for most of our first 150 years
That¡¦s about how long it took Hamilton¡¦s ideas to be replaced with the ideas and philosophy of Karl Marx on tax matters.
Karl Marx? Did I say Karl Marx? Wait a minute, didn¡¦t he write The Communist Manifesto with Frederick Engels? Yup, that Marx. He and Engles wrote this guiding document for communism in 1847.
You can read The Communist Manifesto online. It¡¦s long, but buried right there in the middle you will find ten things that need to be accomplished in an industrialized country to bring on a communist form of government. Number 2 was ¡§A heavy progressive or graduated income tax.¡¨ Nobody can argue that this isn¡¦t exactly what we have now. Any income tax that puts one-third of the burden on the top one percent of income tax earners and 96 percent of the burden on the top 50 percent fits every definition of heavily progressive.
It took no time at all for this idea to catch on in the US. The first income tax was levied in 1862 to help finance the Civil War. A few years after the war ended the tax was removed and the federal government went back to a consumption based tax system. In 1895 The Supreme Court ruled an income tax to be unconstitutional. This little constitutional problem was solved with a the 16th Amendment ratified in 1913. Enter the era of Marx and Engles' income tax.
By the way, before we leave The Communist Manifesto behind, you should know that Number 3 on the list by Marx and Engles was ¡§Abolition of all rights of inheritance.¡¨ Please not how hard leftist Democrats fight against the elimination of the death tax.
Oh .. and you should also pay attention to Number 12. Here you find ¡§Free education for all children in public schools.¡¨ You do know why this was an essential step for the formation of a communist state, don¡¦t you? These aren¡¦t ¡§public¡¨ schools. They¡¦re government schools. More accurately, they¡¦re government indoctrination centers. The little children needed to be indoctrinated into the miracle of communism.
I¡¦ll bet five bucks to a donut that today in government schools across the nation teachers are praising our income tax system as a marvelous means to redistribute income from those who earn it (from each according to their ability) to those who are hungry and homeless (to each according to their needs.)
And just how did we manage without an income tax for most of those 150 years?
Simple. This was a time when our government was generally operating within its constitutional mandate.
Now just what constitutional mandate would that be? The one contained in the 10th Amendment to the Constitution --- it reads The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. If you want to know just what specific powers were delegated to the federal government, look at Section 8 of the Constitution. Click here if you haven¡¦t read it in a while.
Remember what Hamilton said. A consumption tax is a limitation on the government¡¦s ability to grow. Once the consumption tax, which was essentially voluntary, was gone ¡K once it was replaced with an involuntary income tax ¡K the brakes were off. Today we have a federal government that grows with the passage of every single year ¡K a government that consumes almost 25 percent of all goods and services produced in the United States.
You haven¡¦t earned a penny for yourself in 2002 yet.*
As you are preparing your tax return to drop off at the post office, you should remember that you have not yet stopped working for the federal government in 2002. This year tax freedom day, Tax freedom day is the day that you have earned enough money in 2002 to pay your federal and state income tax burden. For all Americans the average is April 27th. In Alaska, a state with low state taxes, Tax Freedom Day arrived on April 8th. We find the highest state taxes in Connecticut, where Tax Freedom Day arrives on May 14th. For my friends in Georgia, the day is April 24th
On the average you work 80 days to pay the cost of the Imperial Federal Government, and another 37 days to pay the cost of state and local governments. This number does not include the taxes that are paid by businesses and corporations and are hidden in the cost of every single item you buy and service you use. This tax is computed to be around 20 percent of the cost of these goods and services.
Maybe you would like to download and print the entire report from The Tax Foundation entitled ¡§America Celebrates Tax Freedom Day.¡¨ Click on this link:
http://www.taxfoundation.org/taxfreedomday.html
*If you happen to be in the lower 40 percent of income earners in the U.S. Democrats have essentially absolved you of all responsibility for the payment of federal income taxes. Remember to show your appreciation on Election Day.
Remember ¡K all taxes are collected at the point of a gun
When considering the operation of government and the antics of politicians, don¡¦t ever forget that government has one unique asset that you do not.
Government can use deadly force to accomplish its goals. You cannot.
If you want to buy something, and it doesn¡¦t fit in your budget, you will have to either borrow the funds or do something to earn some extra money. If the politicians to buy something (votes, for instance) they have the power to seize the money from you, with our without your consent.
Do you think this ¡§point of a gun¡¨ thing is a little strong? Yeah ¡K its strong alright, but its also accurate. If you chose not to pay your taxes the government will levy on your property. The next step will be for the government to come seize your property in order to sell it. If you chose to protect your property, to prevent its seizure by government, the guns come out. It¡¦s just that simple.
The different ways to acquire wealth
You can get out there and earn it. If you do you are very likely to vote Republican or Libertarian.
If you are government you don¡¦t earn wealth. You seize it.
If you are a Democratic voter you wait for the government to take that wealth it has seized from the person who earned it, and transfer it to you.
Bottom line ¡K Achievers know that income is earned. Non-achieving leftists think that income is distributed.
Soon a minority of wage earners will pay all of the federal income taxes.
What is the most certain way, short of using guns, to seize and maintain political power? Easy. You take money from people who¡¦s votes you do not need and give that money to the people who¡¦s votes you do need. To rephrase ¡K you take money from those who are unlikely to vote for you, and give that money to those who are likely to vote for you. Big government leftists (Democrats) have been working this game for decades --- and they are nearing complete success. The latest figures we have are for 1999, but those figures tell the tale. In 1999:
„h The top 1% of income earners earned 19% of the total income, but paid over 36% of the total income taxes.
„h The top 5% of income earners earned 34.0% of the income and paid 55.5% of the taxes.
„h The top 10% earned 44.9% of the income, paid 66.5% of the income taxes.
„h The top 25% earned 66.5%. Paid 83.5%.
„h Top 50%? Earned 86.3%, paid 96.0%
„h And the bottom 50% ¡K where you¡¦ll find a preponderance of Democratic voters
¡K they earned 13.3% of the income and paid only 4% of the income taxes.
The shift increases with every year. Every time the IRS releases a new set of tax statistics you see that more and more of the burden for the payment of federal income tax is lifted from the majority of wage earners and shifted to the minority of wage earners who make the big bucks. It doesn¡¦t take a rocket surgeon to know where this is taking us --- it¡¦s taking us to a tax tyranny supported by the votes of non-taxpayers. Now ¡K for those of you who don¡¦t believe a thing I say (and that¡¦s a healthy attitude, believe me) here¡¦s a link so you can study these numbers for yourself.
http://www.taxfoundation.org/prtopincometable.html
Taxes are complicated.
The tax code contains tens of thousands of pages of rules, law and regulations that no person is capable of understanding. If you call the IRS for help in filling out your tax return more often than not you will get a wrong answer. This wrong answer can end up costing you big bucks. Remember --- you are responsible for wrong answers. The IRS is not.
When your grandparents filled out their income tax returns they had two pages of directions to go by. When you fill yours out you have 122 pages of instructions to follow. Filling out a tax return is now so complicated that most people have to hire someone to do it. You might as well consider the money that you pay to your tax preparer as just more income taxes.
Now ... just what is the reason that taxes are so complicated? It's because politicians use the tax code to hand out favors to people they like, to punish people they don't like, and to maneuver people who vote for them into lower tax brackets while maneuvering people who won't vote for them into higher tax brackets. In addition, politicians also use the tax code to encourage behavior they deem to be good and to discourage behavior they deem to be bad. Nice system huh?
Feel better now?
Remember ¡K You¡¦ve all heard, I¡¦m sure, that you get more of the behavior you reward, and less of the behavior you punish. So, why punish achievement and reward failure? Because those who desire big government fear achievement and embrace failure NOW ¡K GO OUT THERE AND GET THAT ENVELOPE IN THE MAIL TO THE IRS!
And whatever you do ¡K forget all about this day when Election Day rolls around in November.
I copied and pasted this directly from Neal's site and he is apparently using some variant of HTML popular on his home planet but not used here on earth. Just don't have time to go back and clean it out. Gotta get that ^%##@% check into the mail, ya know.
Despite that, it IS readable.
The latest figures we have are for 1999, but those figures tell the tale.
Only the tale that politicians want us to buy into:
Walter Williams, World Net Daily, 10-25-2000
According to the most recent U.S. Treasury Department figures, ... the top 50 percent ($36,000 and over) paid 96 percent of income taxes. Guess what the bottom 50 percent of income earners paid?
If you're among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore's silly "risky scheme" talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
Unfortunately the Individual Income Tax return(1040) that captures everyone's attention each April, is merely the accounting sheet the government cons individuals, held at ransom, into filling out. It puts blinders on the eyes of the voter, and totally distorts their perceptions as to the real impact of taxation in their lives.
The reality is every man woman and child in the nation, pay federal taxes through the nose.
DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation
The full impact of the federal tax system(taxes in gross wage/salaries & other compensation + business income/payroll taxes) added onto the base price(without taxes) of retail consumption goods and services is 36% for federal taxes alone. Why? Because all wages and the taxes on them are paid for out of sales receipts to business,(i.e. consumption expenditure).
Federal tax revenues collected as % of current family expenditure = fed/(1-state-fed-savings) =
23.5/(1-.235-0.102-0.012) = 36.09%
If we add in the cost of federal tax compliance, planning, litigation & enforcement, the percentage that truely represents the burden on the family due to the Federal income/payroll tax system, product prices are increased by more than 55% over taxfree prices.
Where Have All the Dollars Gone?
How the government robs Peter to pay him back.
By economist James L. Payne, Reason Magazine February '94When the overhead costs are added together, (24 percent compliance costs, 33 percent disincentive costs, and 8 percent other costs), they total 65 percent of tax revenue.
Current total Federal tax revenues are about $1900billion, more than $1,000 billion additional dollars are added on onto consumption prices due to the business costs of complying with the federal income/payroll tax laws.
The percent total current federal burden (taxes + compliance costs) of consumption dollars = 36*(1900+1000)/1900 = 54.95% economic burden added on to base retail(i.e. taxfree) prices.
Too bad that citizens don't get a receipt detailing those "hidden sales taxes" buried in their consumption purchases. If they ever did, some of those 70% of the public clamoring for more from government, thinking someone else foots the bill, might be tempted to change their mind.
Looks like that 70% of the public buys the politician's shell game totally.
SAY IT AIN'T SO!
The horror! THE HORROR!!!
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