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1995-04-03
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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!
END