Saturday, August 17, 2013

Don't Tax Money. Tax The Poor.

       I've got an acquaintance who thinks that everyone should pay taxes. Even the poorest should pay something. No more free rides. All taxes should be based on payroll. A wage tax, in other words. The government should get out of the business of charity, is another idea he has that fits right along with his tax plan. And I guess on the face of it, it makes sense. Charities should support the needy and government should get out of their way.
       He thinks that investment money is money we've already paid taxes on and therefore we shouldn't have to pay more taxes on top of that, on the same money. You'll have difficulty finding a rich person who disagrees with that thinking. A few, but not many. That's because the wealthy get a very small portion of their income, if any, from payroll. Most of their income comes from investments. Income from the money they already paid taxes on sometime in the past. No taxes on money, just people.
       First lets look at the tax idea. If you only collect tax on working people, you would be cutting taxes by something over a third. That means a third less for government to use to run the government. So how do you save a third? Cut all entitlements out? But entitlements are a small portion of the budget unless you include Social Security and Medicare. If you eliminate them, you throw millions of people under the bus. Without them the savings become far too small to cover the lost revenue. Even eliminating all subsidies, you won't make up for the loss. Meanwhile the rich will be getting a free ride. Most wealthy folks really don't have to work at all to live quite comfortably.
       Then there's the charity business. It hasn't been all that many years since government stepped into the charity business. I can remember, as a youth, seeing beggars on the steps of the local county courthouse. Sitting there with a tin cup out, hoping someone would throw some coins in it for them. I wondered at the time why these folks didn't get jobs instead of begging. Later I came to realize they couldn't find work because we were still in the depression, or that they just weren't able to find work because of their lack of needed skills. Some were physically unable to work. Private charity was unable to meet the needs of so many people in this country with so many needs. That's why government stepped in to help in the first place. So do you think we can trade the rich for the poor and still come out with enough to run a government?

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