Column for August 19, 2010

Last week I wrote about the facade put on by politicians trying to look good so they will be re-elected. This hypocrisy is especially strong when they want to look like they are doing us constituents a favor by not taking more of our money from us. I also hit upon the hypocrisy of pitching tiny tax cuts and not bothering to try to keep the tax cuts we already had but are going to expire at the end of this year.

I decided that rather than take the word of any one particular media outlet about tax cuts, tax credits, and provisions that are going to expire, I would seek out that information my own self and spend some time reading about them. I found a 48-page document put out by the United States Congress Joint Committee on Taxation full of sun setting tax provisions that simply astounded me.

I despise the federal income tax for several reasons. First, the 13th Amendment to the US Constitution forbids involuntary servitude. Working to involuntarily pay a percentage to the government is a form of servitude. Secondly, the tax code can be easily manipulated, amended, and made to be either rewarding or punitive towards or against a particular behavior, ideology, or political agenda. Thirdly, it is purposely lengthy and confusing so as to require professional assistance and cost an exorbitant amount of time and money with its compliance. The tax system should be so simple that you should be able to do your tax return on the back of a post card. Better yet, we should not have to file anything with the Internal Revenue Service, which would be the case with The Fair Tax.

If Congress were serious about economic recovery and freedom, most of the tax provisions about to expire would be made permanent. The lowest tax rate of 15% that was cut to 10% is about to revert back to 15%. That means that the poorest taxpayers are about to get a 50% tax increase as of January first. The marriage penalty for the standard deduction is about to make its re-appearance. The previously doubled per child tax credit is about to revert from $1000 back to $500. That particular tax credit provision helped benefit a lot of families, including my own, and now it is being taken away.

The "death tax" is about to rear its ugly head once again. People who worked hard to leave a large estate for their heirs will leave 55% less of it because the government will be taking that much of it. Over half of one's estate will be taken away by the government just because it is being left as an inheritance. To me, that is one of the most unethical taxes ever devised. People can work hard all their lives only to pay taxes on their income. Then they take those taxed dollars and invest, save, or purchase property. Investment dividends are taxed, and the property they buy with taxed money will be taxed annually. Then, those who were fortunate enough to have amassed even a small fortune to pass on to their survivors will be painted with the label of greedy while the government steals and devours over half of that wealth. By the way, for those who do save and invest for their futures are going to run across a return to a higher rate of dividend and capital gains taxes. This is all insidious and just plain evil.

On top of all of this, we are going to be hit with the costs associated with the new health care legislation. People like me who use flexible spending accounts will no longer be able to use those funds for non-prescription items, which will hurt the family budget.

Another big hit will come in the form of health care insurance benefit taxation. If your employer has a health care benefit, you will have to start paying taxes on the portion of the benefit paid by your employer. For people like me who chose an employer that has an excellent benefits package, we are going to have a much higher income tax burden as these benefits will also count as income.

There are too many tax provisions expiring or about to be enacted to mention in this column. Look it up for your own selves. We are going to get reamed by our already out of control, excessively spending government that thinks that you just don't pay enough in taxes as it is. We had a revolution in this country for less than this.