CD ROM Paradise Collection 4/CD ROM Paradise Collection 4 1995 Nov.iso/edu/essy53.zip/43.DOC

Text File | 1995-04-03 | 7KB | 121 lines

                                    ESSAY 43

                       THE "HIGHER TAXES ARE BETTER" MYTH

              There are three main categories of taxes:

                   1. PROPERTY TAXES

                   2. INCOME TAXES and

                   3. TAXES ON TRANSACTIONS.

              Income  taxes  include  PERSONAL  INCOME  TAXES on city,
         state and federal levels.  There are CORPORATE INCOME  TAXES,
         sometimes  called  SHIFTED  TAXES, because  corporations pass
         these on to consumers. These, along with other "sneaky" taxes
         constitute the vast kingdom of hidden taxes.  In  1982  there
         were 47 hidden taxes on a loaf of bread!
              Taxes  on  transactions  include  GENERAL  SALES  TAXES,
         EXCISE TAXES and TARIFFS. Sales taxes are on the city, county
         and state level in the United States.
              Excise  taxes  include  the  "sin  taxes" on tobacco and
         alcohol, and gasoline  taxes.  Also  included in excise taxes
         are  LICENCE  TAXES  (liquor, marriage,  hunting and  fishing
         taxes).  Excise taxes also include FRANCHISE TAXES (the right
         to carry on certain kinds of  businesses).  Excise taxes also
         include  the SEVERANCE TAX (tax  levied on the  processing of
         natural  resources  such as timber, natural gas, and petrole-
         um).
              Other  taxes include ESTATE  TAX (property taxed  before
         the  heirs  receive  it);  INHERITANCE  TAX  (property  taxed
         after  the heirs receive it);  and GIFT TAX (property tax  on
         property  given  during the  lifetime of the  donor).  Gotcha
         covered!  (THE  WORLD  BOOK  ENCYCLOPEDIA,  1987   ed.,  s.v.
         "Taxation").
              President  Clinton,  bless  his heart--I  know  he feels
         our  pain--is planning  on raising tax  rates and adding  the
         VALUE-ADDED TAX (a general sales tax).   He is also  planning
         on adding an ENERGY TAX!
              NOW THE GOVERNMENT IS TAXING OUR PATIENCE!
              SOCIAL SECURITY or PAYROLL TAX, along with MEDICARE TAX,
         UNEMPLOYMENT TAX and RETIREMENT TAX amount to 31  percent  of
         federal income.  PERSONAL INCOME TAXES produce 36 percent  of
         federal income.  CORPORATE  INCOME  TAXES (paid by consumers)
         produce 8 percent of federal income. EXCISE, CUSTOMS, ESTATE,
         GIFT, AND MISCELLANEOUS  TAXES produce  7 percent  of federal
         income.  Federal  borrowing adds  the  balance of 18 percent.
         [INSTRUCTIONS FOR FORM 1040: 1994. (Washington DC: Department
         of the Treasury, Internal Revenue Service, 1994), last page].
              Dr. Munzert stated that our combined tax rate  including
         hidden taxes in 1982 was 51 percent  [Alfred W. Munzert, PhD.
         POOR RICHARD'S ECONOMIC SURVIVAL MANUAL   (Franklinville, NY:
         Hemisphere Publications, Inc., 1982)].  IT  IS INTERESTING TO
         NOTE THAT ONE  OF THE REASONS FOR THE AMERICAN REVOLUTION WAS
         THE HIGH TAX RATE OF 21 PERCENT! Now, the American government
         is  going to raise taxes again!  How stupid  does the govern-
         ment think we are?  Stupid enough  to believe that  tax money
         will be "reinvested in government-generated jobs" and will be
         used to  reduce  the deficit?  (Well, maybe not that stupid).
              To the tax rate of 51 percent must be added at least two
         more  taxes.  The  government  lotteries  are  the  so-called
         "painless taxes," but are they? They create another parasitic
         bureaucracy  that  takes  a  large  part  of  the billions of
         dollars that they exact from weak Americans  who are  looking
         for something for nothing. There is a greater chance of being
         struck by lightning than of winning a lottery!
              Also, the 1982 tax rate of 51  percent  did not  include
         inflation.  From  1945  to  1982,  the  value of the American
         Dollar  dropped  92 percent. Compared to the 1945 dollar, the
         1982 dollar is worth 8 cents!  Compared to the  1900  dollar,
         the 1995 dollar is worth less than 6 cents!  The U S  Govern-
         ment raises this tax  simply  by  printing  more money at its
         own whim.  This raises the question, "Why did we go  off  the
         gold standard?"
              Joseph  taxed Egypt  at the rate of 20 percent for seven
         years  and  was  able  to  bring Egypt through seven years of
         famine on that 20 percent!
              "Why couldn't our government do its job  for  a  flat 10
         percent income  tax  in  good  times?"   In  answer  to  this
         question, Marilyn  Vos  Savant gave this answer in her column
         in PARADE (KANSAS CITY STAR, February 21, 1993):

              The  government  would receive less.  For it to re-
              ceive  the same amount, each taxpayer would have to
              pay about 15.22 percent of his or her income.
                   However, this doesn't address  the  underlying
              issue. Should the government be spending that great
              a percentage of each taxpayer's income?  And should
              there be so many taxpayers to begin with?
                   Consider this.  In 1914, the first year of the
              U.S. income tax, less that half of 1 percent of the
              population  needed  to file tax returns at all, and
              those people paid an average of only $1033  each IN
              1990 DOLLARS.  Why?
                   These statistics isolate the growth of govern-
              ment.  . . . .   In other words, if today's govern-
              ment  ran  as parsimoniously as yesterday's most of
              us would pay no income tax at all.  Big Brother may
              not be here, but Big Democracy sure is!

              WHY NOT DROP ALL INCOME TAXES AND ALL PROPERTY TAXES?  A
         10 PERCENT SALES TAX, WITH  PROCEEDS  DIVIDED  EQUALLY  AMONG
         CITY,  COUNTY,  STATE  AND  FEDERAL  LEVELS  SHOULD  SUFFICE.
         The  organization  is already  in place for sales taxes.  IRS
         could be dissolved, with a few of its bureaucrats reorganized
         to handle the federal share of sales tax.
              The  confiscatory taxation that we are experiencing will
         soon eliminate the middle class if it is not reversed.
              The proper way to raise revenue is not to raise the  tax
         rate, but to stimulate the economy. A millionaire friend gave
         this  illustration:  at a  tax rate of 5 percent, 100 percent
         of  a  dollar  will  be returned to the government when it is
         spent twenty times.  However, if the tax rate is  raised much
         more, people will not have a dollar to spend! Then, most will
         end up poor and the government will end up printing worthless
         money!


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