Posted on 11/28/2005 1:46:25 PM PST by Eaglewatcher
On one day every year, more money is spent by Americans than has been spent on the whole Iraq War. This day is not Christmas or Valentine's Day, or any such fun day as that. This day is April 15, the deadline for Income Tax filing. In case you missed it, filing your Federal Income Taxes is not nearly as fun as opening presents on Christmas morning. It's not even close. Not only is it not fun, but Federal Income Taxes are a huge drain on the American economy, to the tune of $500 billion in 2002, according to the Tax Foundation (Boortz 49).
How did this figure come about? An estimated 5.8 billion hours spent by individuals, businesses, and non-profit organizations in compliance with our monstrosity of a tax code cost Americans approximately $194 billion in 2002 (Boortz 43). Established by the 16th Amendment on February 12, 1913, and having gone through approximately 35 years of reform, the current IRS tax code exceeds 54,000 pages and contains some 2.8 million words (Americans for Fair Taxation). Individuals and businesses usually have to hire professionals called CPAs to interpret and correctly file their taxes.
Not only are these explicit costs crippling, but how much worse are the implicit costs, or in other words, the opportunity costs? Think about it this way: those 5.8 billion hours are not being spent producing anything. As Neal Boortz correctly puts it in his new book, The FairTax Book, that figure is equivalent to the lifespan of 8,700 Americans (Boortz 43). That's almost three times as many people as died on September 11, 2001, every year! Boortz goes further with this analogy:
"What kind of workforce would it take to cover those 5.8 billion hours? If you figure a standard workweek - eight hours a day, five days a week, a few weeks every year off for vacation - it adds up to a workforce of more than 2.77 million people. That's more than the auto industry, the computer manufacturing industry, the aircraft manufacturing industry, talk radio, and the steel industry in the United States combined. (43-4)"
The current tax code continues to cost businesses money in this way: businesses are forced to make tax-decisions instead of economic decisions. That means, instead of making corporate decisions based on what is best for the company's profit, the corporations make decisions based on the lowest-cost tax implications. This hurts businesses in two ways: First, businesses lose potential earnings because the IRS tax code would penalize them for certain decisions. Second, as more of an opportunity cost, business executives actually have to spend time and money on figuring out the tax implications of their decisions. So, not only do the decisions they are forced to make hurt them, but they have to take the time to make those decisions. Corporations could be investing money back into their company, thus growing it and providing more jobs, but instead are having to waste time avoiding high taxes. How much money is lost here?
It is probably impossible to calculate the exact value of all of this time wasted by every American who files Federal Income Taxes, but the Tax Foundation has estimated that, opportunity costs added with the $194 billion compliance cost mentioned earlier, equals a total cost for America exceeding $500 billion. But wait, there's more.
What about embedded taxes? Don't think for a minute that businesses manage the whole tax burden by themselves. They pass a lot of the burden on to consumers, by raising the prices of their goods and services. That's right, you as a consumer are paying an average 22 cents out of every dollar to the businesses to cover their tax costs (Boortz 55). Not only do businesses have to pass the cost on to the consumers they serve, but also to their own employees. If businesses didn't lose money to the IRS, they could afford to pay their employees higher salaries and give them more benefits, including health care and vacation time.
An additional problem with the IRS tax structure is that it creates a desire to move companies overseas. Moving manufacturing plants and corporate headquarters to countries like Germany actually saves money for businesses. Places like Germany, although they don't have a great tax code, certainly have a more economically beneficent tax code. But when businesses move overseas, often referred to as outsourcing, America suffers. Jobs that should be given to Americans are instead given to people who live in those other countries. Additionally, because the regulatory costs and the costs of production are lower in those countries, those products, cars for example, become cheaper and more competitive, further reducing the amount of business done with American companies.
These offshore financial centers shelter trillions of dollars from any participation in the American economy. “[T]he 2000 Merrill Lynch & Gemini Consulting study World Wealth Report estimates that one third of he wealth of the world's high-net-worth individuals is held offshore. How much would that be? Try $11 trillion - $11 trillion sucked out of the American economy, all of it immune to the tax obligations you suffer every April 15 (Boortz 97).
Imagine if all of these trillions of dollars were added back to the American economy. On top of that, imagine saving the $500 billion compliance costs every year. These two things would give a huge boost to the American economy. Fortunately, there is a plan to make this happen, a plan sponsored by Georgia Representative John Linder. The plan is called The FairTax, or H.R. 25.
Bibliography Boortz, Neal & John Linder. The FairTax Book. New York: HarperCollins Publishers, 2005.
McConnell, Campbell R. & Stanley L. Brue. Economics: Principles, Problems, and Policies. 16th ed. McGraw-Hill/Irwin, 2005. Online. Americans for Fair Taxation. . Online. Tax Foundation. .
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Chris Liakos is a Political Science major in the University of Georgia. He serves as President of the Georgia Perimeter College Political Science Club in Lawrenceville. After campaiging for the GOP in the Fall of 2004, Chris started a chapter of Students for Saving Social Security at his local campus.
Of the ten planks, they have been most successful with the 2nd. At one time the top rate of the income tax was an incredible 91%. JFK convinced Congress to lower it to a mere 70%. It took the great Ronald Reagan to lower it to 28%. It is ironic now that our greatest enemy, Russia, now has a flat income tax of 13%, which is lower than the LOWEST income tax rate in the US.
"We will never again be a FREE people so long as we have an income tax and an IRS!"
I actually got that fom a link here on FR. It was an article from some publication. I had saved it until I carelessly forgot to save existing settings when upgrading my operating system and I losts all my bookmarks, desktop items, etc.
I live in Dallas and I remember there were rumors that Perot had it in for G.H.W. Bush over some mysterious failure by Bush to rescue some MIAs in Vietnam or some such foolishness and as a result was determined to defeat him. That didn't make sense to me and as it turned out it was a red herring to divert attention fom the real reason, money.
Before the first Gulf War Perot wrote a lengthy article in the Dallas Morning News arguing against the invasion. He basically said give Saddam Kuwait and everything will be fine. It was basically a hit piece on Bush.
He and his son bought a lot of farm land in Tarrant and Denton counties and then built a large airport for cargo planes, Alliance Airport, with mostly government money. When the City of Ft. Worth, who had jurisdiction and had put up some of the money, had the timerity to want to manage the airport, the Perots went to work behind the scenes and stopped that. Perot runs it.
Perot, Jr. bought the Dallas Mavericks and shortly afterward they abandoned a perfectly good and relatively new arena and had the City of Dallas build them a bigger new one.
It seems to be all about money and primarily someone elses.
Google Ross Perot, Clinton, Healthcare and lots of things come up.
Thanks for the info!
I wasn't aware of that -- thanks for the info!
From what I understand, that's a very deceptive picture of the Russian tax system. Russia may have a low flat income tax rate, but their payroll taxes for the government-run pension and health care systems is so high that many employers still go to great lengths to avoid "paying" their employees (offering cars and free apartments in lieu of salary, for example).
I don't think anyone would be singing the praises of the U.S. system if we imposed a flat income tax rate of 5% and raised the FICA and Medicare tax rates to 30% and 15%, respectively.
Great post!
The Rockefeller/Roosevelt/Morgan cabal set Americans up when it/they pushed for the creation of the Interstate Commerce Comission and the soon after double whammy of the Federal Reserve along with the Fed'l taxing authority under the 16th Amendment. The very crux of the empowerment, and of the enrichment, of the political and social elites so well illustrated in the very recent book "Do as I say - not as I do" which reveals such hypocrites like Striesand and her $22,000/year water bill (for her huge lawns), or the tax evading Kennedy Trusts, or the fact that Kerry paid a mere 12% on millions of income; and which all of whom are huge critics of repealing the death tax and raising taxes.
TR, who succeeded Rockefeller's hand-picked predecessor McKinley, played to the gallery vis his attack of the Std Oil monopoly, while behind the scenes he demanded increased campaign contributions from Std Oil!
In 1907 Judge Landis fined Std oil $29 million. Two weeks later began the great panic of 1907, and in 1911 the SCOTUS ordered Std Oil's dissolution.
In retaliation to the welfare and "liberal crowd", Wall Street, and the Fedl Govt's campaign against Std Oil, Rockefeller saw the power of "philanthropies" in their effectiveness in destroying him. As he had done in building Std Oil, he saw the benefit in compromising with his enemies and joining forces with them, all the while engineering to master and destroy them.
They were cheaply bought off, and he took them over lock, stock and barrel, beginning with taking in hand the social service and "uplift" organizations, which he eventually organized through the New York Tuberculosis & Health Assoc., under Harry L. Hopkins, into a nationwide Social Service Trust. Such control not only muzzled his santimonious critics, but covered all his activities with the cloak of respectibility and thus allowed the tapping of the gullible charitable to the tune of $4 Bil/year, a penny of which was NEVER spent on a TB patient.
The Rockefeller "philathropies" were conceived solely for the dual purpose of removing the curse from the Rockefeller name while enabling the Rockefeller/Std Oil interests to carry on without interference from a hostile public or the Govt. Tons of money was spent influencing media, the Universities and Govt. And these were the guys responsible for mucking up the Middle East over oil.
Bear in mind that between the CW and the turn of the century America and her consumers prospered with ever falling prices in commodities such as oil, steel and in telephone and freight rates; small competititors where cramping the profits the Std Oils, the AT&T's and US Steel's. Hence the ICC, to rescue their profits, by fixing rates at the consumer's expense. (Remember what fixing oil prices in the 70's did for us)
These were the powers that talked America into WWI, which scholars say without which devastation, the rise of Hitler and WWII would never have happened.
Just as much as greedy politicians buying votes with OPM for "the common good", their industrialist enablers were the prime movers in the creation of the 20th Century Welfare/Warfare State we yet suffer mightily under, and it's unfathomable opportunity costs to the wealth of generations of Americans, still ongoing in a Govt that intervenes in markets & costs way too much.
The Commerce, Gen'l Welfare & Equal protection clauses were re-interperated by judicial fiat to further enable an unlimited Govt for and by the corporate, social (media/academe) and Govt elites.
For almost a century now our great public "educators" have indoctrinated generations into believing that Laissez-Faire capitalism was the main source of America's greatest problems, when in fact it was over-reaching Govt in every respect.
A great read that should cause even leftists to reconsider the above cancer of anti-capitalism is well told by Ray Childs in his intellectually honest essay "Big Business and the Rise of American Statism", which I heartily commend to all: http://praxeology.net/RC-BRS.htm
Thanks for the post.
I recall reading just about the same that you did about Perot's positioning to run a good portion of HillaryCare. The info came out when a government report became available that showed the five or so districts into which the country would be divided for administration of health benefits. Perot's company was to get two of the five as I recall. Something pretty close to that.
I pointed that out--the forced loan at 0%.
They got this one in years ago.
If the Poison Queen B*tch runs in 2008, she's going to have to draft a "conservative" catspaw like Perot to split the Right's vote. I'll make the prediction now.
We should actually explore this on FR, because we might be able to shoot that balloon down before it ever gets off the ground.
Actually, they've been most successful with the FIRST, THEN the second.
Your post gives the evidence - most people don't even realize how they've been had by the government.
I have seen a lot of posts here already that make me think the moles are working to split us. I think much of the Bush bashing from pretend hard right wingers is phoney. They are trying to create a rift among the base. You even see suggestions to form a new party or join the Constitution party ala Buchanan. Wonder what was in it for Pat to cause him to hook up with an avowed Communist? Soros money?
We will have to disagree on that one.
"1. Abolition of property in land and application of all rents of land to public purposes."
I will maintain that not many Americans REALLY own their land these days - they just think they do. Try not paying your taxes for a couple of years and see how long you hold onto "your" land. Of course, the land "owner" gets to insure "his" land (to keep the lawyers from scooping up his equity), and he has to maintain "his" property (blight ordinances, etc.), and if he wants to improve "his" land, he's got to go to the REAL owners and 'umbly beg permission, and pay for the permission, AND he gets to pay more rent property tax after getting grudging permission for improvements from the real owners.
And since we now recognize "property taxes" for what they REALLY are - rents, we ask the question - what are these rents for? Why, "public purposes", of course.
So, the first plank of the Commie Manifesto has been implemented with a vengeance - so successfully that most people haven't even got a clue that it's in place, and don't kick about it like they do with the second plank:
"2. A heavy progressive or graduated income tax."
Which is indeed in place, but sticks like a burr under the skin of many.
Recent Supreme Court decision re: The Takings Clause certainly didn't expand FReedom, did it?
I'm looking for an article I read several years ago that rather thoroughly demonstrated that the Manifesto is about 70% implemented in the US.
Will post it when I find it.
This is great information! Has it been posted? It should be. If you don't want to let me know and I will be glad to.
I'm glad Blood of Tyrants made me think about it some more, because I realized that there might be a way to tell how far along the path your individual state may be. Several years ago, my state passed a law giving you two years to pay up, or they grabbed "your" land and sold it. They were having problems with "land owners" acting like it was actually their land, and going many years into arrears.
Can't have that, dontchaknow. ;-)
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