On Fair Shares in Taxation

I had a conversation yesterday with someone who runs a successful business. This person employs around forty people. His is not the largest business in his small town—not even in the top five. Wherever you live, your local school district employs more people, maintains larger facilities, and spends more money than does this person's business. He lives modestly in a middle-class neighborhood in his suburban town.

As required by our current tax code, this person pays his taxes four times a year. Every three months he sends around $300,000 to the Internal Revenue Service. Today he will file his tax return and will pay any amount not covered by his quarterly estimated tax payments. That amount for this year will be $900,000! Please remember, this does not represent his entire tax burden, but only considers the cost of his federal income taxes.

Considering these numbers, I think it appropriate to ask the following questions:

1. Is he yet paying his fair share? Is he patriotic enough yet? Standard socialist philippics attack people like this for being oppressive toward the poor. Somehow he is considered something other than the group labeled as "working people" although he works far more than forty hours every week. He is a generous giver. I'm thankful for his gifts to the local church, but I also know that he has contributed to local, state, and international charities.

   A large percentage of people who live in his neighborhood give nothing to charity. They pay no income taxes. They may drive more elaborate cars or live in more expensive houses or have a more expensive cable TV package. Some of them have overextended themselves in subprime mortgages to purchase homes they could not afford (although the Dallas-Fort Worth region hasn't had as much a problem with that phenomenon as some other regions of the nation). Yet he pays nearly $2 million in federal income taxes and they pay nothing. And then they complain about the greedy rich people who stick it to the common man.

   Is this fair?

2. Is this good for the country? Is it good stewardship? Looking at the numbers above, it is easy to determine that, for every one of this man's employees, there's an amount of money equivalent to her salary that is being paid to the federal government in income taxes. Do you want to talk about creating jobs? Were he not paying federal income taxes, he could nearly double his workforce.

   Rather than paying employees in the region, his money will go to Washington, D.C.

   Have you ever been to our nation's capitol? I have a recommended outing for you. Journey to Washington, D.C. Get up early on a weekday morning. Turn on the news and look at the traffic report. See how many cars are on the Beltway. Then go get an early spot on a bench on the Mall or in Lafayette Park. Take a couple of hours and watch the unending throng of suits and ties streaming into those government buildings and lobbying firms. Imagine the salaries. Then, when you've tallied it all up in your mind, remember that this vast army of bureaucrats produces not a single product. The entire organism is, technically speaking, parasitic.

   That vast economy in the Washington, D.C., area is funded by money taken OUT of your town. No doubt, that's a good deal for those people in D.C. Is it good for you? Is it good for our country?

3. Finally, I ask you to try to consider objectively this question: Is this nation still the best place to find the opportunity to start a business? Our wages are high. Our taxes are high. The chances that your business will be sued in some kind of product liability lawsuit or trumped-up employment discrimination lawsuit or worker injury lawsuit or environmental complaint is higher than in some other places.

   We have some things going for us. You generally don't have to bribe people in order to do business in our nation. The United States of America contains some very nice places to live. All of the modern conveniences are at our fingertips. And America still stands for some things that are noble and worthwhile. I'm proud to be an American, and I don't want to sell this great nation short at all.

   I also believe that it is unethical and in direct contradiction to the teachings of Christ for anyone not to pay every penny of taxes required by the law. Whether God approves of the nation sending him such a bill or not, God expects this guy to write that $900,000 check.

   But looking solely at the question of whether our nation is a good business environment, I think that the massive flood of jobs to the Pacific Rim is an ominous indicator that we may be poisoning our own well. Granted, most of those who own businesses in the United States are patriotic people who want to live here and do their share. It would take something pretty traumatic and life-altering to convince them to go anywhere else.

   But, then, the act of signing your name to a $900,000 check? That's got to be a pretty traumatic experience.

My degree is in Church History. I know very little about economics. So, take my musings about these matters with a large grain of salt. But, if there's anything valuable for you to take out of this little essay, perhaps it is this: You should be extra considerate and nice to your employer today. He just might be in a really bad mood.