Thursday, April 15, 2010

Something Smells Rotten In The State of Denmark

On this April 15, 2010, or tax day as it has (un)affectionately come to be known let us reflect on some disturbing federal tax statistics. According to the Tax Policy Center, for the year 2009, 47% of U.S. households will pay NO federal income tax. NO federal income tax as in ZERO. Obviously, most of them will pay other kinds of taxes – state tax, property tax, sales tax, etc. But at a time of record levels in federal spending and federal debt, half the country is effectively making NO contribution to it. Five years ago it was just under 40% who paid no federal income tax; now it's just under 50%. If this foreboding trend continues, by 2012, America could be holding its first federal election in which a majority of the population will be voting for government swag that they're not even paying for. In less than 25 years, the American Revolution phrase "No taxation without representation" will have effectively been reversed into representation without taxation. Think about the state of the union for a moment. China and a handful of oil-rich countries in the Middle East have our balls in a huge vice called sovereign wealth funds, we’ve blown our national defense wad in Iraq and Afghanistan thus allowing a crazy North Korean midget to build a potent nuclear arsenal, and our national debt continues to spiral unabatedly toward $20 trillion dollars, yet the number of Americans who are net contributors to the federal treasury continues to decrease annually. The thing about democracy is that it’s great… until it’s broken.

What's that? You don't think it's broken? Then how about a few more mind-numbing stats to consider on tax day: The top 5% of taxpayers contribute 60% of the revenue. The top 10% provide 75%. About 40% make up the rest, and the remaining 45-50% pay NOTHING. This isn't redistribution of wealth people. It isn't even “spreading the wealth around," as then Senator Obama put it in an uncharacteristic off-the-prompter gaffe during his 2008 campaign. It’s a system gone wrong where a handful of adept citizens are burdened with 75% of the load, while the unfit masses stand around and do nothing. Yet when it comes time to pass out the government swag the unfit masses are at the front of the line deciding who gets what, while the folks at the back of the line who did all the heavy lifting in the first place are left to take it in the shorts.

If ‘progressive taxes’ are truly that how come our country is so completely fucked and growing more fucked with each passing day? Why not just throw the whole thing out and start over with a ‘flat tax’ where everyone makes an equal contribution to the federal treasury proportionate to their household earnings? I can hear the libs already: (in super whiney voice) "But a flat tax isn’t fair! Since the marginal value of income decreases with the amount of income earned (or since the last $100 earned by a poor person has considerable more value than the last $100 earned by a rich person) taxing that last $100 of income the same amount despite vast differences in the marginal value of money isn’t fair!" Okay libs – I’m a reasonable guy – to appease your argument I’ll even include a tax exemption for household income below a certain cutoff level. This way the truly ‘poor’ (which ain’t nowhere near 47% of current American households) won’t get porked (like the top 10% of earners do under the current system). But alas I’m not as stupid as I look and I understand human nature, so I know a ‘flat tax’ will never be adopted (not in my lifetime anyway). After all why would something that makes so much sense ever get passed when a near majority of the American population is a beneficiary under the current flawed tax system? Think about it. Once 51% of the population is no longer paying any federal taxes (which will happen within the next two years) they’ll be able to pass legislation to bleed the other 49% of the population dry. And why wouldn’t they? Free Obamacare and government swag for everyone (except those of us who are actually paying for it of course)! Isn’t democracy great? Happy tax day everyone.

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