Paying Your Fair Share: American Tax Relief
June 2005
Countries around the world are striving to
attain the growth of a middle class that America has attained.
A large middle class brings social and economic stability
to a society. Many societies are working exceedingly hard
to establish a middle class, we seem to be slowly strangling
ours. We owe the standard of living we have left, not the
highest in the world by any means, to economic theories
and developments that occurred in the 1930's and are largely
attributable to one man, John Kenneth Galbraith. Galbraith,
unquestionably one of the greatest economic thinkers in
America , took the ideas of Maynard Keynes and applied them
to our capitalist system. His whole premise was to take
the tops off of the "irrational exuberance" of our capitalist
economic excesses (1929, 1999) and the bottom off of our
depressions (1930-38) both of which are inherent in our
economic cycles. Government can and should have a role through
fiscal policy in the economic system to help control the
sometimes wild swings in our natural business cycles and
to serve as a brake on capitalism.
The result of these governmental interventions
and economic controls was the creation of one of the largest
middle classes of any society and a huge economic expansion.
It is the middle class that is the backbone of American
society and it is under attack on several fronts. Allowing
the exportation of jobs in the name of free trade, lack
of real programs and funding for training displaced people
to fill current jobs in demand, and last but not least,
laws which make it nearly impossible for workers to unionize
to protect their rights and guarantee a voice in their economic
destiny.
It does not seem to me that the majority of
our elected officials have our interests at heart. Granted
we are lucky in RDU to be represented by David Price and
Brad Miller but they are in the minority in our capital.
The nation also lost a great voice for the common person
when Paul Wellstone of Minnesota died in a tragic plane
crash.
Let me give two taxation matters we must take
action on: our current system of taxation and a part of
that system, the Alternative Minimum Tax.
Tax System
Simply put, our current tax laws are incomprehensible
to the average person. There have been over 14,000 changes
to the tax code since it was last overhauled in 1986. The
existing laws seem much too slanted to the truly wealthy
and special interests. In a Washington dominated by special
interest lobbyists do you feel your well-being and economic
health are represented?
Listen to the comments made to the President's
Advisory on Federal Tax Reform (due to report this July)
as reported by AP tax writer, Mary Dalrymple:
- Tax laws cannot be deciphered. No one should have
to be a tax attorney or an accountant to meet the basic
responsibilities of citizenship.
- Nathaniel Pritikin of Santa Barbara wrote " A fair
tax system should be so obviously fair that I should
be able to judge its fairness without getting a college
degree in economics."
- Tax breaks seem arbitrary. When you read the fine
print you see the rules disqualify many taxpayers or
that the benefit is not nearly as helpful as it looks.
- Gary H, Burger of Tempe, AZ ", Try the child tax credit,
it ends at age 16. Do your 17 and 18 year-olds cost
you less, or more?
- A married couple from Jacksonville , FL wrote to complain
that they make too much money to qualify for certain
family tax benefits, even though "we really live pretty
much check to check like the rest of America . We ask
that the tax reform panel take a serious look at the
disparity in treatment between the truly wealthy and
those who someone decided have an income that they consider
to be 'wealthy, they wrote.
While the individual American taxpayer is
paying their share, American corporations and many truly
wealthy individuals are escaping their obligations. The
tools used to escape their responsibility are called "tax
incentives" passed by Congress and tax shelters used by
American corporations and not audited, evaluated or ruled
valid by the IRS. Individual incomes are reported directly
to the IRS and deductions are easily audited and crosschecked.thus
individuals are much more heavily audited than any corporation.
The result, the lowest corporate share of income receipts
ever in history. Here are some facts for you to ponder:
All citizens and corporations must share support
for our society. It is time to tell Congress to institute
a simple, truly progressive income tax without loopholes,
incentives or tax shelters. And the IRS must have enough
staff to enforce it.
Do not buy the argument either that American
corporations will be at a disadvantage against foreign corporations.
Based on data compiled in 2000 by the Organization of Economic
Cooperation and Development "nearly three-quarters of these
OECD countries collect more in corporate revenues, relative
to the size of their economies than the United States."
The Stealth Tax
The Alternative Minimum Tax was passed in
1969 to ensure that a small number of wealthy individuals
who paid no income tax did not escape any responsibility
for taxes.. The problem according to the New York Times,
March 13, 2005 "First, the alternative tax is not adjusted
for inflation, so over time, more and more middle-income
taxpayers find themselves owing it." Mr. Bush's tax cuts
make it worse because corresponding changes to the alternative
tax were not made. Think Mr. Bush gave you a tax break?
Think again. It is estimated that an additional 3 million
2005 taxpayers will be subject to the tax and by 2010 it
will grow to nearly 30 million taxpayers! According to the
Times article "Meanwhile, and most outrageous, only 35 percent
of taxpayers who earn $1 million or more will owe the alternative
tax."
We have an opportunity to make our voices
heard. When the Tax Reform Commission reports this July
look carefully at the report and proposals. We should demand
that our government institute a fair and understandable
tax system. Additionally, all individuals and
corporations must be participants in the system and not
be allowed to reduce or escape their tax burden. The health
of our society depends upon it.
