Wednesday, April 15, 2009

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.

27 comments:

Bob Cleveland said...

Bart, are you SURE you didn't spend 50 years in the insurance business? This sounds like something I might have written!

Dead on, brother.

volfan007 said...

I agree with Bob Cleveland. You hit the nail on the head. I'm a Tennessee boy, born and raised. And, I can tell you that the govt. getting so much out of a person's pocket does not set well with true Tennesseeans. We're not happy about taxes at all. We dont like big govt. In fact, we're suspicious of govt. here in the hills and hollers of TN. And, when I hear things like this, about this man having to pay such taxes, it makes my blood boil.

Bart, also the death tax is another one. I know a family that inherited their father's money, and his land and farm equipment. He was a farmer. Well, they had to add the value of all those together...the land, the farm equipment, and the cash that that father had worked so hard to accumulate. And, the family had to pay $220,000 in taxes...death taxes. I believe the govt. calls it inheritance tax. And, these people are not rich...not by a long shot. Yet, the govt. got $220,000 of their Dad's hard earned money, so that the new White House dog can be groomed, fed, housed, and trained. And, this money was given so that healthy, young men can play basketball all day while living on food stamps and living in govt. housing. It's pathetic.

Bart, you got me all stirred up this morning. You rabble rouser.

:)

David

Joe White... said...

Bart,

This is why every American who can needs to find their way to a Tax Day Tea Party!

Dave Miller said...

Bart, you can probably get the exact quote and source (you always seem to know such things), but I remember hearing a statement made a long time ago by an observer of the American system.

"The American system (freedom, captitalism, etc) will only survive until the people realize they can vote themselves vast sums of money from the public treasury."

We have reached that point. Obama's campaign, to my understanding, was based on that concept exactly. If you will vote for me, I will take money from the "rich" and give it to you.

Who wouldn't vote for that? It was the most massive bribe in history, paid to the taxpayers by the taxpayers.

Tom Parker said...

Dave Miller:

Based on your comment about Obama, why did Senator McCain and Govenor Palin not win the election? What went wrong?

Wayne Smith said...

Bart,

We need a flat percentage rate that applies to everyone with no deductions. This will put the bean counters out of work, to be retrained as whatever.

Wayne

bapticus hereticus said...

Bart: Is he yet paying his fair share?

bapticus hereticus: How is his company structured? What was his income? Does his company receive any tax breaks from the city, county, etc.?

Bart Barber said...

BH:

I'm not privy to all of those details. Perhaps we can work around the inadequacies of my ignorance in this manner: For what level of income do you think a $1.8 million federal income tax bill (not counting taxes paid at other levels or for Social Security or the like) would be appropriate

bapticus hereticus said...

Bart: BH: I'm not privy to all of those details. Perhaps we can work around the inadequacies of my ignorance in this manner: For what level of income do you think a $1.8 million federal income tax bill (not counting taxes paid at other levels or for Social Security or the like) would be appropriate[?'

bapticus hereticus: Asking if it is fair is a fair question, but based on the data given it's difficult to say. The structure of the company would have some bearing as to his tax rate as would the type of deductions he would qualify. Also concerning the fairness issue is whether his company is benefiting from subsidies by varying governmental entities.

Dave Miller said...

Tom,

I think if McCain had offered a more distinct alternative to Obama's liberalism, he would have had a better chance.

Baptist Theologue said...

Dave Miller,

The quote you asked about comes from Karl Marx. Larry Burkett used the quote from Marx in his book:

“A democracy is not a form of government to survive. For it will only succeed until its citizens discover they can vote themselves money from the treasury, then they will bankrupt it.”

(Burkett, The Coming Economic Earthquake, 1991, page 34)

volfan007 said...

Hummm...Marx....Obama...Marx... Obama....communism....liberation theology...Marxism...Obama's taking from the rich to give to the poor...hummmmmm

Are we seeing a pattern here?

David

Tom Parker said...

I fail to see a pattern.

Anonymous said...

Bart

Our governor - the good governor big hair and still yell leader, is finally talking a little sense. I think it is the first thing I have agreed with him about sense his election.

Look out for that Republic of Texas! Obamar keeps going the way he is going and TX will exercise it right to secede from the Union!

Jim Champion

volfan007 said...

Tom,

Look harder.

David

volfan007 said...

Jim,

A bunch of Tennesseans helped yall seceede before, maybe it'll happen again.

:)

David

Chris said...

The following is attributed to Alexander Fraser Tytler and a work entitled "The Rise and Fall of the Athenian Republic," although it appears that the quote's antiquity and origin with Tytler cannot be authenticated:

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. The average age of the world's greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

From bondage to spiritual faith;

From spiritual faith to great courage;

From courage to liberty;

From liberty to abundance;

From abundance to complacency;

From complacency to apathy;

From apathy to dependence;

From dependence back into bondage.

volfan007 said...

Chris,

Interesting. I believe that we're in the "apathy to dependence" stage right now.

Big Govt. is getting bigger by the week, and the majority of the people dont seem to care.

David

bapticus hereticus said...

Jim: Bart, Our governor - the good governor big hair and still yell leader, is finally talking a little sense. I think it is the first thing I have agreed with him about sense his election. Look out for that Republic of Texas! Obamar keeps going the way he is going and TX will exercise it right to secede from the Union!

bapticus hereticus reports:

April 9, 2009
AUSTIN - We think it's time to draw the line in the sand and tell Washington that no longer are we going to accept their oppressive hand in the state of Texas. - Gov. Rick Perry


April 10, 2009
AP
AUSTIN - Gov. Rick Perry is asking FEMA to issue an emergency declaration for 199 Texas counties dealing with wildfire threats.

March 31, 2009
AP
WASHINGTON- Texas Gov. Rick Perry has asked the federal government to send 1,000 troops to the border to contain drug-related violence occurring across the border.

October 27, 2008
AP
AUSTIN - A request made by Gov. Rick Perry last week for federal reimbursement of 100 percent of debris removal for 18 months is pending at FEMA headquarters.

Tom Parker said...

David:

Do I need to remind you Republicans have been in control of the Presidency-Senate and Congress for most of the last 30 years. But all of the problems were created by President Obama? Whatever trends you see involve both Democrats and oh yes Republicans. You scare me how narrowly you see all issues.

volfan007 said...

Tom,

I never said that all the problems were caused by President Obama; did I? Maybe you need to read things better before you comment. I do see Obama carrying forth an agenda to make govt. bigger and bigger. That's what I was talking about. Obama comes out of a liberation theology Church. He sounds very socialistic. He is a classic tax and spend Democrat... to the Nth degree. That's what I was talking about.

So, I really dont know how in the world you made this into a Replubican thing. I didnt. I'm independent, BTW. Although, honestly, I have found myself voting Replubican many, many times down thru the years. The Dems are just so liberal and have such ungodly stands on abortion and homosexuality and such.

But, this was not a Replubican-Democrat thing. It was a Obama-Big govt. thing. It was a Obama-socialism thing. It was a Obama-tax and spend thing. It was a Obama-liberation theology thing.

I really am having a hard time understanding how you missed it.

David

Dave Miller said...

Tom,

I am interested in something. I did not vote for McCain because of his views on the economy or immigration. I disagreed with those.

I only voted for him because of his stand on moral issues.

I have a serious question. I know you are a believer. That means that there are two possibilities.

1) You agree with Obama's stands on moral issues like abortion.

2) You disagree with his stands, but find that these issues were not enough to sway your vote.

If #2 is the case, what issues are those.

I am seriously interested in the answer to that question. Frankly, I don't know many Christians who voted for Obama. I would really like to know the thinking of a pro-Obama Christian.

If you would prefer, my email is pastordave@cableone.net

Tom Parker said...

David:

I have done it again. Trying to respond to you in any way shape or form is a waste of my time. I am so glad you are not in any position of authority over me in my life because you are always right and others who do not look at life the way you do are just wrong. You live in such a small and narrow world. I promise to try to do better in the future about not responding to you.

Bart Barber said...

David Worley is a humble and Christlike servant of God.

Bart Barber said...

I would be delighted to have him as a pastor.

volfan007 said...

Bart,

Thank you, Brother.


Tom,

God bless you.

David

bapticus hereticus said...

Chris: The average age of the world's greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to complacency; From complacency to apathy; From apathy to dependence; From dependence back into bondage.

bapticus hereticus: Findley Edge used to talk of historical progression with man, movement, machine, and monument (although I do not recall who developed the paradigm), and I suppose there is much history to support this and the paradigm listed above. Most of the world's previous civilizations/societies, however, were based in agrarian systems, and recently the influence of technology and information has been more dominant. In comparison to older systems, newer social systems tend to be more open, and thus with more complex integrative/integrating mechanisms in place, democracies, with an ability to process greater levels of information, should be able to periodically renew their vitality thereby avoiding or at least prolonging what some say is inevitable: decline and death. Associated with this (i.e., vitality) would be greater levels of differentiation and equifinality, which for those with little ability or desire to adapt (e.g., some of the teabaggers) would likely be very stressful, as they would likely cling to various systems (i.e., behavior, thought, etc.) that would be increasingly irrelevant. We are likely at a transition point in our history, one that could re-energize our democracy and sense of purpose.