According to some, Bush seems to want to make investment income tax free and place the burden of funding the government entirely on labor. Regardless the accuracy of the intent or expected outcomes of Bush's tax reform plans, this issue nicely raises the question of who should fund the government (and the services the government provides)? Shouldn't everyone contribute?
In California, some businesses pay only $800 annual income tax. WHISKY TANGO FOXTROT!! If corporations are considered to be individuals under the law with regard to free speech or whatever, they ought to be considered individuals within the tax code as well. (Don't ask what happens if we hold corporate behavior to the same standards as actual humans. It isn't as though I believe that just because corporations make huge profits that I expect them to shoulder the entire tax burden. But I do expect them to contribute to the fund that keeps our government capable of providing the services that make the nation one to be proud of.
Religious organizations ought not be tax exempt either. Perhaps we can grant tax exemptions to smaller groups, say those with less than 100 donors or who only accept annual donations from a single entity of less than $1000 or that have less than $100,000 income. Everything over $100K needs to send a bit to the government. This country provides a wonderous environment for religions to flourish in and they ought to nut up a bit to help pay for it.
Paying taxes is noble and right. Yeah, I realize that this statement is going to get zoomed in on and ripped to shreds, but it is an essential attitude. No one likes to play taxes but we all need to because we are all better off for it, assuming the money isn't wasted. But taxes provide essential services, be they national defense, science and technology funding, the arts, education, public health, and international aid.
Tax money shouldn't be squandered or wasted though, and just because I support taxation to fund the country doesn't mean that I'm all for all spending and a huge welfare state. But there are critical functions that only the government (not the market, it just doesn't work that well in some cases) can address and it needs money to do that.
Thus we arrive at the idea that got me started on this: How about we have the people who hold power pay for it? How about a presidential tax that is applied to all registered voters of the party in power? Even better, how about we have everyone (corporations and organizational entities included) who donated to the candidate give the same amount to the nation as a whole. A matching system, only you match what you paid before the election after your candidate wins.
I was lead into this by thinking in terms of the large corporate and investment wealth backers of the President and Republican party who aren't paying for the privilege and are benefitting at exorbitantly self-interested ways. Some may argue that this is only natural to reward those in power, but that's short-sighted to an unacceptable degree. Leadership and support of it are not investments that recoup gains after the election. Civic service should be for the civic body and not one's self-interest. Yet those who so willing paid cash (and if the $800 a year deal is anything to compare by, many of them donated large multiples of what they pay in taxes) to get a guy into White House are unwilling to pay taxes to benefit the country. It's bad as a general issue but it borders on the morally corrupt when the president then goes on to continue to reduce revenue from those who are entirely capable of paying taxes but just don't want to in order to pad their already ample personal fortunes while running up vomitously monstrous deficits.
Of course, if we did have a party tax for the party in power, we might see flight from party registration and since this would impact the primary system, we'd see open primaries as opposed to party-restricted ones (a good thing). This in and of itself makes it an idea worth trying. While I'm on a roll, I think that congressmen and the president should be paid the national average for taxed income, so if investment income becomes untaxable, they would earn the average of the labor and service economy workers. They could perhaps boost that average by taxing investment income.
I understand and even agree with arguments that investment income shouldn't be taxed because it provides the fuel for our economic engine. It's a very simple, to me at least, issue to resolve: As long as the money stays in investments, it isn't taxed. Once it comes out of the investments, it isn't providing fuel for the economy anymore and is serving as disposable income for the investor. Thus, tax it.
If I invest $100, I take $100 of my income (that was already taxed once when I made it) and I give it to someone to help them build a widget. The widget becomes successful and my $100 becomes worth $1000. Now, as long as that $100 investment stays as an investment, I shouldn't be taxed on it. But as soon as I cash it out (assuming it isn't reinvested in a different company) and use it to pay bills or buy goods, it becomes taxable. So I can be the richest man in the world on paper with billions in holdings and pay zero taxes, but only as long as I don't have a penny in cash to live on (and thus I'd be homeless and starving).
Undoubtedly I'm oversimplifying it and proving that I haven't the faintest about how investments and income work, but if so, hopefully someone can set me straight.
Posted by Nutrimentia at March 6, 2005 11:43 PM | TrackBack