Tuesday, April 16, 2013

After Tax Day Blues

Thankfully, it is over for another year. The season of taxes has come and passed. I did not have to file for an extension, although I know some people who did.

I don't like paying taxes--although as my civic duty I recognize that I must pay taxes and settle up with the governments by every April 15th.

But I am always struck by the inequity of taxes and tax season. I woke this morning and read an article published in the NY Times titled A Tax System Stacked Against the 99 Percent. I actually do not know anyone who is not in the 99 percent.

After reflecting upon the tax season I realized that tax refunds are a way that the governments (in this case the U.S. and Maryland) make paying taxes seem less painful, by collecting too much and then giving it back to the taxpayer like some great gift at the end of the tax year.

The real problem with our tax system is that corporations do not pay their fair share of taxes. According to the article, General Electric has become the symbol for multinational corporations that have their headquarters in the United States but pay almost no taxes — its effective corporate-tax rate averaged less than 2 percent from 2002 to 2012.  Think about it, if a company earning billions of dollars per year paid its fair share of taxes then personal income taxes might be reduced for all of us.

The article continues to postulate that if a majority of the people believe that the tax system is unfair, then our sense of national solidarity and cohesion will be harmed. It also postulates:

We could have a tax system that encourages good things like hard work and thrift and discourages bad things, like rent-seeking, gambling, financial speculation and pollution. Such a tax system could raise far more money than the current one — we wouldn’t have to go through all the wrangling we’ve been going through with sequestration, fiscal cliffs and threats to end Medicare and Social Security as we know it. We would be in sound fiscal position, for at least the next quarter-century.

I think I'd like to give it a try. Life during a sequestered government is bad and only getting worse.

-- Bob Doan, Elkridge, MD
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