Thursday, May 7, 2015

Taxes

Doug:
When did taxes become evil? If we all want to come to together and build something big for the common good, then taxes are the only fair way we can do it. I mean, if one is proud of our army, or our national highway system, then it would follow that one should be proud of the money that one gave to create those right?

David:
Taxes are not evil. The IRS is.
If the government was a good steward of our money, most people would not object to paying them at all. In fact, I think most people would pay more in taxes, if they had any confidence that their money were going toward the things you have mentioned, and other projects that only the Federal government can accomplish. But, that is not the case.
The last time I looked, the tax code is around 77,000 pages long.

Doug:
Sounds like you would like to describe what it takes to be a "good steward" of your money. Do you mean that the government should only spend money the way that you think they should? Fortunately, you don't get to pick and choose what projects get your money and which don't. That's what elected official do for us.

Just because the tax code is 77,000 pages long doesn't make it bad. Sometimes an issue is just complex. But, like computer code, if you can make it shorter, it is easier to "debug"... that is, find the errors and fix them. I suspect a lot of the complexity, though, comes from "special interest." Some special interest seems deserving, but others, not so much.

It does seem that many of the big corporations could afford to pay their share of taxes. And they should be proud of it!

David:
You miss my point.

I haven't even started on what the government should or shouldn't be spending our money on. I am saying the government should be a good steward of our money, but it isn't. In fact, the government's own watchdogs routinely report just how much waste exists, and yet nothing ever changes. If anything, the problem continues to worsen. Here's an example of an agency you've never heard of, wasting thousands of your dollars.

http://www.foxnews.com/politics/2015/01/29/220-person-federal-agency-made-oil-paintings-17-top-staffers/?intcmp=latestnews

Doug:
Ok, that is a summary of this article. But that doesn't really look like journalism to me. Why didn't they get someone to respond to these allegations? It is just a cherry-picked list of items that sound too expensive. How do these prices compare to the corporate expenses? Where is the follow-up? Did someone get fired? Is it easily explained away? I bet they never follow up on it. Allegations are not journalism.

Ok, you can't just say "nothing ever changes" and "the government isn't a good steward of our money". That just hyperbole.

The IRS just collects the money due. If you don't like what money is due, change the law, but there is no need to claim that the IRS is evil. They are just men and women doing their jobs.

David:
Corporations can spend their money however they want. It's their money. The government, on the other hand, is spending my money. That's the difference.

And there are…..how many agencies in the Federal bureaucracy? Actually, no one knows for certain.

http://en.wikipedia.org/wiki/List_of_federal_agencies_in_the_United_States

Wikipedia correctly notes "Every list of federal agencies in government publications is different." And the number of agencies, which are almost all under the control of the executive branch, continues to increase. I would suggest (and the GAO concurs) that many of these agencies are redundant, or have redundant missions. That means that many of them could be eliminated, along with the office space and all of the government employees with their benefits and pensions. 

Doug:
Managing any large organization is hard. Big corporations have exactly these problems. Maybe it is just inherent in large orgs.

David:
That's true. Bureaucracy is the problem. As any organization becomes larger, it becomes less efficient at what it does. I've seen it in healthcare. Ironically, the financial pressures that Obamacare have exacerbated have led to huge consolidations in the industry. There are few, if any independent hospitals anymore. They all belong to giant networks and corporations now to streamline costs. Unfortunately, they also become less efficient. But government is the worst example. Even the individual Department Secretaries have no idea what is going on in their own departments. The IRS scandal? Lois Lerner knows nothing (although she pled the 5th).  The Healthcare.gov role-out? Katherine Sebelius was clueless there might be problems.  They need help in Benghazi? Nope, Hillary Clinton didn't know anything (And what does it matter?).  Hogan's Heros escaped again? Sergeant Schultz knew noooothing!

As to the tax code, it is a miss-mash of giveaways to special interests and corporations. This is nothing new, and dates back to the beginning of the income tax. You might be interested in reading, "Last Call: The Rise and Fall of Prohibition", for an interesting look at how the confluence of the temperance movement, the women's suffrage movement, and anti-German sentiment after WWI led to the development of the income tax. Before that, we ran the government on a consumption tax (much like the "Fair Tax" being proposed in some circles today). But, around 40% of government funding came from taxes on booze. (Yes, indeed, America had a serious alcohol problem…) Before the country could go dry, a different source of revenue had to be found. And we've never been the same. Right from the start, the big players in business and their political allies gamed the system to benefit the biggest campaign donors. I agree that simplifying the tax code would go a long way towards restoring faith that the the system is fair, and everyone, both individuals and corporations, are paying their due. (And I don't trust any politician  to decide which special interests is worthy and which isn't.)

Doug:
Sorry, but you have to trust them. That is why you elect them to represent you. That is how our government works.

David:
It's hard to trust them when the guy at the top looks you in the eye and lies. "If you like your healthcare plan, you can keep it. Period." 

I firmly believe that the one single thing that could be done, that would really shake up government spending, would be to repeal Withholding. Right now, most people don't have any idea how much the government takes from them each month, because it is taken out of their paycheck before they get the money. If everyone received their full pay, and then had to write a check on April 15th for money that was actually in their hands, so they could see just how much the government takes, heads would roll! Many more people, from the bottom to the top, would care a lot more about how the government spends their money.

Doug:
That sounds like a bad idea. What do you do when they have already spent the money that they owe to the government? Fine them? Put them in prison? 

David:
What do they do to you now, if you don't pay all of your taxes (or if you belong to the tea party)?

The government doesn't need more money. If they didn't waste so much of the money they have, we could do much more with each of us paying less.

Doug:
What is the test to see if they need more or less money? I agree that there is a right size to government, but not sure how you tell. One can always claim that they aren't efficient enough. But compared to what? This may just be how it is. 

So, I say, pay your taxes, vote for good stewards, and be proud of your taxes paid. There are so many great things that we do in this country with those taxes!

3 comments:

  1. From Judy Horton:
    I read your blog and I found it to be very interesting but I couldn't figure out how to comment on it. So here goes! This in response to Doug saying " fire them". 984,000 of the federal government's 3.5 million full and part-time workers are union members! A high percent of state workers are union members. Have you ever tried to fire a teacher!! Almost impossible! Wow, just created a new blog debate! Also, I want big corporations to do really really well because my Indiana and Florida teacher's retirement is invested in the stock market.

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  2. Judy,

    No, I haven't tried to fire a teacher. There needs to be a balance between union workers and corporate/government employers. Being in a union shouldn't mean that you can be bad at your job, and employers should get to arbitrarily fire people. It should be fair.

    If you want corporations to do really well, vote Democratic:
    http://politicsthatwork.com/

    ReplyDelete
  3. Here is a prime example of the government not being a good steward of our tax dollars. Government agency A has not spent their allotted budget. Said agency decides to give everyone a new office chair (the "old" chairs are still in great condition) so that they can show they need the same amount of money next year. Happens every second of every day in our government.

    ReplyDelete

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