Nuggets of Wisdom

Wednesday, April 15, 2015

5 Stupid Things About Taxes

Hey, it’s April 15th! Have you paid your taxes yet? Either way, here are five stupid things about taxes (as inspired by Steve Shives):

#1: They’re theft.

Go figure! The anti-tax, anti-government libertarian claims taxation is theft. Yeah, it’s a cliché thing for me to say, but it’s also a perfectly rational conclusion for me to reach. Theft, by definition, is taking someone else’s property without their consent. Taxation is the government taking away a portion of someone else’s wealth without their consent. Therefore, taxation is theft.

And no, the “social contract” does not magically make taxation not theft. I never consented to the state taking away my money for the sake of it providing me with services simply because I was born in this country. Me being dropped out of my mom onto a piece of land owned by the U.S. government (according to an imaginary boundary drawn on a piece of paper) does not equate consent to taxes any more than a sorority girl passing out drunk and half-naked at a frat party equate consent to sex. (And bite me, feminazis, if that analogy offends you!)

If the fact that neither I nor anyone else consented to taxation doesn’t convince you that it's theft, than consider the amount of force and coercion that's required to have someone pay their taxes. Let's be perfectly honest: people don’t pay their taxes because they want to. They don't do it because they think it benefits them. They do it because the government forces them.

Think about it: what happens when you don’t pay your taxes? The government sends you letters demanding that you pay them. What if you refuse to comply? Then the government sends police officers over to your house to arrest you. If you comply with them, they throw you in a cage for the rest of your natural life; if you don’t, and you try to evade them, they will chase you down and shoot you dead.

Conversely, the worst thing that happens if you don’t pay your phone bill is that your phone company cuts off your phone service. That’s it. No armed thugs. No broken down doors. No guns. No threats. No jail. No death. No force whatsoever. And yet all of that is required to enforce taxes. But taxes aren't theft, right?

#2: They’re inescapable.

“If you don’t like paying taxes for services that we use, then why don’t you stop using those services?” the tax apologist will ask. The simple answer is that you really don’t have a choice.

First of all, in many cases, you’re forced to use government services. If you’re a “rugged individual” who dreams of living off-the-grid, you’re going to end up stumbling over roadblocks set up to prevent you from doing exactly that. Many states and cities have strict regulations that prevent people from becoming more self-sustainable, preventing them from setting up solar panels, or collecting rainwater, or even growing their own gardens.

Even if you and your “rugged individualist” buddies decided to go out into the woods and set up your own commune where you grow your own food, collect your own water, generate your own electricity, teach your own children, and even defend yourselves with your own guns, it’ll only be a matter of time until your front door is kicked down by jack-booted thugs, considering how police raids against sustainable communities are all too common.

Secondly, even when you do have a choice not to use government services, you’re still forced to pay for them. If you send your child to a private school, you still have to pay for the public school. If you choose to invest in a retirement plan, you still have to pay for Social Security. And if you choose not to visit the public park or library, you still have to pay taxes to fund them. Everything from police to firefighters, to roads and garbage collection, are all funded by your taxes, regardless of whether or not you want to use them.

“So if you can’t escape paying taxes in this country, why not move out of the country?” Where, exactly? Every country on earth is controlled by a government that levies some level of taxes on its citizens. Even if I wanted to move to a country with lower taxes, I’m still going to end up paying taxes.

And even if there were some utopian country that didn’t have taxes—guess what? I’d still have to pay them to this country! Yes, even when you move to another country and renounce your American citizenship, Uncle Sam still manages to reach into your pockets and take your wallet through expatriation taxes. So not only are you paying taxes in your new country, you’re being double taxed by this country.

So Ben Franklin was absolutely correct when he said that the only things certain in life are death and taxes—though I’m beginning to wonder if death is the lesser of two evils here.

#3: They’re complicated and expensive to comply with.

Lee Doren of How The World Works made an excellent analogy about out complicated tax code which I’m going to share here: imagine a guy walks into a grocery store to buy milk. When he goes to the cashier to pay for it, the clerk hands him a giant stack of papers and asks him to fill it out before he can pay. When the man refuses to oblige, the clerk informs him that he can either purchase software to help him fill out the necessary information or hire someone else to do it for him. Frustrated, the man throws his money at the clerk and leaves with the milk, but before he can leave the store, an IRS agent approaches him and says, “I think you still owe that man money.”

That anecdote perfectly conveys how complicated and convoluted our tax code is. Not only is it complicated, it’s also incredibly expensive to comply with. If you want to pay your own taxes, you’re going to need an almost encyclopedic knowledge of our tax code in order to comply with it, and that very well could require years of law school, which, as you could expect, can be quite expensive.

Understandably, very few people actually wish to bother paying their own taxes. Instead, they either hire an accountant (which costs money), utilize the services of an accounting firm (which also costs money), or, if they insist on paying their own taxes, buy tax-paying software (which also costs money). See a pattern there? No matter what you do, you inevitably have to spend money in order to pay your taxes—in other words, you have to pay money in order to pay money. If you think that sounds insane, that’s because it is!

#4: They hurt the poor and middle class the most.

Before any of my fellow conservatives and libertarians comment, yes, the rich inevitably pay more in income tax and the overall tax burden, and yes, corporations do pay the highest corporate tax rate in this country (which often forces them to outsource jobs and evade taxes overseas). But income and corporate taxes aside, every other tax is mostly paid for by ordinary people like you and me.

This is especially true when it comes to sales and excise taxes, the burden for which falls squarely on the shoulders of the middle class and poor. Every time you buy something, whether it’s a candy bar or a new flatscreen television, you’re taxed for it. Every time you fill up your car with gas, you’re taxed for it. Every time you go grocery shopping or watch a movie or do anything else outside of donating to charity or tithing at church, every single cent you spend is taxed, and every cent the government collects forces the brunt of the national tax burden onto you.

Even if you think that paying taxes is “patriotic” and “the price we pay for living in society”, you should be disgusted by how unfairly our taxes are levied. How unfair are our taxes? Americans, on average, spend more on taxes than they do on food, clothing, and housing combined. Let me repeat that: Americans spend more on taxes than they do on the basic necessities they need to survive. Now this wouldn’t be so bad if our taxes actually funded things that were far more beneficial than all that—which leads me to my final point:

#5: They rarely benefit us.

“Taxes are the price that we pay for civilization," the tax apologists often cry with wagging fingers. "So what do you mean you don’t like taxes? You don’t like roads or bridges or dams or schools or post offices or—"

Stop right there!

If we’re going to discuss what our taxes go to, then we might as well look at the federal budget and talk about what they actually go to, not what you think they go to.

First and foremost, the lion’s share of our taxes go to the military. Defense spending makes up 20 percent of our federal budget. That seems big enough by itself, but when compared to the rest of the world, it’s even more obscene, as we spend more on our military than the next eight countries combined—and that includes China and Russia!

Look, there’s nothing wrong with having a strong military, but when the last two wars we were involved in were against cave-dwelling desert barbarians armed with makeshift weaponry, there’s no sense in us spending more money on our military than the rest of the world, especially when most of that money goes to tanks and weapons we won’t even use, and many of which end up in the hands of local police departments!

The next thing our taxes go to are entitlement programs such as Medicare and Social Security, each of which make up 20 percent of the budget. Again, as with the military, there’s nothing wrong with spending money to provide for the needs of our most eldest, and thus most vulnerable, citizens. The problem is that both our major entitlement programs are so fundamentally broken that they're projected to go bankrupt with the next few decades.

Now that’s not exactly bad news for Baby Boomers who are currently collecting Social Security, since they’ll mostly all be dead by the time that happens; but for the rest of us, that means that none of us will see a single dime that we’re currently paying into the system. I know most people have a problem with calling these entitlement programs “Ponzi schemes”, but if they have a better term for a system where people at the bottom are expected to pay for people at the top with the promise that they one day will make it to the top and receive the same benefits, all without realizing that the entire system is too unsustainable to allow people such privilege, then I’d like to hear it.

The next big thing our taxes go to is education. Yes, contrary to the popular misconception of “underfunded schools”, we actually spend more on education that any other country, and yet, even then, test scores remain low, especially when compared to other developed nations. When we spend such an obscene amount of money on our public schools, and yet high school graduates are required to take remedial college courses, perhaps the solution to our broken school system isn’t “throw more money at it.”

And, of course, one of the other big thing we spend the most money on is corporate welfare, the spending for which is actually twice as large as social welfare. In fact, most of the money that goes towards the Department of Agriculture is spent on agricultural subsidies rather than food stamps. So if we’re really going to complain about “government waste”, we should focus less about poor people spending money on lobster and sirloin streak (which, admittedly, is still a problem) and more on big farms that receive subsidies to grow crops like corn—which mostly goes to ethanol and high-fructose corn syrup.

Yes, the real parasites sucking on the teat of the state aren’t necessarily poor people on welfare (though I won’t admit that welfare fraud isn’t a problem), it’s big corporations receiving federal subsidies and tax breaks. And before anyone blames big, bad Republicans for whoring themselves to corporate interests, let me just remind you that our Democratic President campaigned on ending the recession through "economic stimulus"—by which, he really meant corporate bailouts and handouts. Funny how all of that money siphoned to big business has yet to “trickle down” in the form of jobs and higher wages. "Hope and Change", am I right?

And when you subtract all of that out of our federal budget—when you figure out all of the obscene spending on the military, runaway entitlement programs, pork barrel projects and other corporate boondoggles—once you remove all of that, what you have left, the meager morsel that we are left with, is the money that is spent on “roads and bridges and dams and post offices” and all of the other good stuff that statists claim our taxes are spent on, but really aren’t!

You want to argue that taxes should be spent on services that benefit us? Fine. But if you’re going to argue that they actually are spent on things that benefit us, then you might have a better case arguing that homeopathy cures cancer.

The hardest part is only picking five. Catch you next time!