Wednesday, December 28, 2011

Greed!

After I put forth the argument that those who are unwarranted recipients of government dole are responsible for their predicament because of they don’t take personal responsibility, I ask a couple of questions. Which person is greedier, the one who works all his life for his millions/billions or the one who covets those riches? (Keep in mind that the government takes those riches through a progressive tax system then they redistribute them to these recipients through the dole.) What would be the surest way of returning the equilibrium of the taxpayers in this country?

The first question is rhetorical. The second takes some thought into human nature. A person who is unscrupulous enough to receive an unwarranted dole from the government, doesn’t care what happens to the rest of the money the government takes in as long as he gets “his share”.

Up until the 16th amendment and the institution of the income tax, everyone in the country paid an excise tax on imported goods. No one knew just what he or she was paying because there was no disclosure. Therefore, there wasn’t a “class warfare” based on taxes because everyone was responsible for their own upkeep and paid excise taxes on the foreign goods they purchased. (By the way, if you were so poor you couldn’t afford any foreign goods, you didn’t have any excise taxes to pay.)

Since the inception of a graduated income tax (part of the Communist Manifesto), the idea has spread that those who make more should pay a larger percentage of what they make in taxes. According to this logic, these people should have a greater say in what goes on in government than those who pay a lower percentage. Just for grins, why don’t we use something like the 3/5ths rule in reverse? Let’s give those who pay 3 times as much in taxes 3 times as many votes. Just kidding. However, on a serious note, what would happen if everyone had to pay the same percentage with no loopholes? The rich would still be paying more of the cost of government, but now those who make less would also pay, and they would have a greater sense of concern for how the government uses their tax money. I know this sounds lame, but it is human nature. If you pay for something, you have a vested interest to see that you get what you pay for.

This would do very little for those who are unwarranted dole recipients. They wouldn’t really care if they had to give back some of the money the government gives them, but for those who aren’t on the dole and now pay taxes would definitely not want to see that money go to support those who don’t do anything for what they receive. (Just a side note, if the military has to pay taxes on the tax dollars they receive in pay; shouldn’t those on the dole have to do the same?)

One option is to abolish the tax system altogether and opt for a federal sales tax on the goods consumed. Everyone would receive their entire paycheck (there would be no withholding taxes taken out). Taxes would be on new, final goods only. The same percentage is charged on the amount of each purchase. This would restore equality. Everyone would have an equal share of the responsibility for supporting the government.

I know the arguments for and against the “Fair Tax” proposal (like the one mentioned above), but none of the academic arguments take into consideration the psychological effects of paying a fair share of the government’s bills. All of a sudden, people become more conscious of where it is going and who gets it. It would do a lot to restore personal responsibility and choice as well. For a simple example, let’s say the tax is 10%. A rich man may choose to buy a $500 shirt and he pays $550 for it while the poorer man chooses to buy a $10 shirt and pays only $11 for it. Who is paying more in taxes? Even though the rich man is paying more in taxes, the poor man can feel just as proud because of what he is doing to support the government.

Somewhere down the line, someone introduced the idea that it isn’t fair to ask someone who makes a living at or below the poverty line to pay taxes. What does it do to the sense of personal responsibility toward supporting the country, when nothing is required in return for the freedoms that we enjoy? When someone gives support, they have a vested interest in the outcome. Where there is no investment, there is no interest in the outcome.

We need to ensure that everyone has a vested interest in what happens to this country. All need to have a sense of urgency in fiscal responsibility for our country. Each paying his equal fair share would do that.