Rants, Raves, & Random Thoughts

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Wednesday, February 21, 2007

Taxes Suck

It’s that time of year again. You know…the time of year when you get to see just how much your government loves you. It’s tax time. We met with my accountant last night. We’ve been filled with dread since the first of the year. This is a strange year tax wise for us. Not only do we have to claim substantial gambling winnings (we received more in taxable winnings last year than I made my first year out of college), but we also bought and sold thousands of shares of stock. Sure it was exciting at the time, but now we have to pay the piper so to speak.

I heard an interesting theory the other day concerning taxes. I don’t remember the parties involved, but the overall concern was that not everyone is doing their part to support the government. We have thousands if not millions of people working, shopping and living in our country without being held responsible for taxes. They come from all walks of life, whether they are illegal immigrants, third generation welfare recipients or the insanely wealthy with hidden incomes and shady tax shelters.

There is a solution. One which would not only make it next to impossible to pull one over on the government, but one that, once implemented would likely create a surplus for the first few years until they found just the right percentage.

Do away with income tax entirely. Move to a flat tax. But wait, wouldn’t there be a way around even a flat tax? How can anyone truly enforce taxation? Simple, have a 20% sales tax. If you want to buy food, clothing, consumables, etc. you will have to pay your taxes. No fuss, no muss. Everyone who saunters up to a cash register in this country will automatically be doing their part to support it.

Why 20% ? Well, for the average joe taxes are 28%, but that’s only that high because the people who actually have to pay the full amount are a minority. If you took the cost of running the government and divided it equally among everyone on its soil, I’m sure the number would be even less than 20%, but it is a good starting point.

Does anyone else think this sounds like a good idea?

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At 3:41 AM, Blogger lime said...

i've said the same thing for years actually. i have a serious axe to grind against the IRS and the reason you mentioned is only one part of why. did you know federal income tax was started as a TEMPORARY measure to fund the civil war? Last time i checked that bill had been pretty well covered a long time ago....

At 4:53 AM, Blogger Leslie said...

There is no state income tax in Texas, just federal. Only about 10% of Jim's wages goes to Uncle Sam. Then a nice chunk goes to pay for health insurance (pre-tax). There's no sales tax on groceries here either. You buy a gallon of milk for $2.59, and all you pay is just that.

Not to brag, but I'm so proud of my husband...
He got a raise the other day and they're talking about another one in the near future (they're trying to pull strings to finance another raise for him right now). They consider him a "core employee" and a "valuable asset" to the company, especially for no longer than he's been working for them. Sure, I'm thrilled about the raise, but I'm also very happy that his company thinks so highly of him and they value his hard work. He's made a name for himself here, and he's done it in just a year and a half's time. We figured it up and the raise basically pays for the health insurance and then some, so it's like getting free healthcare. Couldn't have come at a better time since Sarah is almost here.

At 5:20 AM, Blogger James Goodman said...

actually, I did know that it was a temporary deal, Lime. THey also talked about putting a cap on the amount that it could rise to, but it was scoffed at and shot down. "Like taxes would ever exceed 10%" yeah, I guess we showed them...

That is fantastic news, Leslie. Tell him I said congrats! :D

At 5:37 AM, Anonymous linda said...

I am not savvy enough to argue taxes all I know is that being single and on the lower income side of things they tax me to death and then want more at the end of the year!
I actually got $5.00 dollars back from state this year!!! and not much more from fed!! and the sad thing is I was just glad I didn't have to pay in!!

At 5:57 AM, Blogger James Goodman said...

See for me, the ideal tax return would be just enough to pay for my accountant. Anything more then, all you've done is let the government sit on money that could have earned interest for you throughout the year. Oh, wait, but then you would have to pay taxes on the interest. *sigh*

Of course, trying to cut it that close has its own drawbacks. As often as the tax laws change you seriously run the risk of being in the negative and we all know how much that sucks...

At 7:41 AM, Blogger Carrie said...

I think I am with you there but it is still early for me. There just has to be some sort of fix for it. It is like my mom. She is dirt poor and I would hate for her to pay that much for food but then again if she didn't have income tax, she probably could afford things.

Interesting topic!

At 5:40 PM, Blogger James Goodman said...

indeed, it would be a trade off. That does bring up a good point though, there would still have to be some means to distribute earned income credit or some other means to ensure people with low incomes could still afford to buy groceries.

At 6:53 PM, Blogger Chad Sargent said...

The only meaningful tax reform would be passing the FairTax

A flat tax is simply the current bloated system in its earliest form, and starting it over again would put us right back where we are now.

Changing the tax base to consumption will end this cycle and give citizens control over taxes. Read more at FairTax.org.


At 5:08 AM, Blogger James Goodman said...

Ah, yes perhaps the use of "flat tax" is a bit misleading. I've read over the link you posted and it looks very much like what I envision when I think of an alternative to our current situation. Thank you for your input.

At 6:15 AM, Blogger Robin said...

Hey, James. I'm not very knowledgeable about any of this, but it seems to me that as long as politicians are "owned" by big business, we're not going to see any changes that encourage people to stop being mindless credit card junkie consumers. Right now, the banks get 20% from a lot of people by way of credit cards and the government gets its taxes. I don't see either of them giving any of that up anytime soon.

I like the idea of some sort of flat tax, though. If for no other reason than to get rid of a lot of bureaucracy. Why do I have to pay a zillion dollars in taxes, and then stand in line for three hours at the DMV to pay a fee to license my car? Or wait in line every two miles on the Interstate to pay tolls? Then there are school fees, car inspection fees (Ohio), dog licensing fees, building permits, taxes on everything you buy, etc. It goes on and on, as you know. I know these are different levels of government, but sometimes it feels like living in a barrel of pirahnas. And the waste and inefficiency of collecting funds through all these channels is mind boggling.

I'd hate to see what it really adds up to each year. And if you factored in payment for wasting people's time (not to mention the stress it causes), it would be really scary.

And now I have to go shopping. lmao

At 5:29 PM, Anonymous Jerry said...

You hit the nail on the head. State and local taxes need to be eliminated too. Anyone who has had to do payroll taxes for states like Indiana, Ohio, and Pennsylvania will tell you what a nightmare it is. There are no two state tax agencies that operate the same way, and now they are coming up with their own websites and want you to do your tax reporting using their proprietary software. It's getting worse!

At 5:49 PM, Blogger James Goodman said...

Oh, I couldn't agree more, Robin. We are nickle and dimed to death. Everyone has there hand out and you are going to fill it one way or another. Don't even get me started on the biggest, scamming, blood sucking, damn near criminal cartel that is the "big" insurance companies. grrr...

lol, at the going shopping. Have fun while your doing your part! :D

Thanks, Jerry. I agree with abolishing all of it. Have a flat X% and let the government divy it up as they see fit.


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