The Truth About Taxation

There’s a load of rubbish talked in this country about taxation. General consensus is that Republicans are the party of low taxation and Democrats will “tax the hide off of yer”.

The truth about taxation is really very simple. A government needs a certain income from its people to run essential services. How it obtains this income is in the form of taxation. Politicians cast a veil over the means by which they obtain this cash, and influence the vote by taxing those least likely to elect them.

George Bush has blatantly taxed the middle classes while giving enormous tax breaks to his mates in the high-wealth bracket. His excuse, that low taxation allows companies to expand their businesses and improve the economy, is simply that – an excuse. It may be a feasible policy if companies could be relied on to plow their additional profits back into the pockets of their workers, but corporate greed is not given to such sensible, longterm, ideals and consequently tax breaks become nothing more than cash cows for upper management and Wall Street.

The present, very real, fears over recession, coupled with still record highs on the stock market, are obvious evidences of this fact, yet it is incredible just how many Americans fail to grasp the simple concept. So imbued are they with the political principles of “low taxation”, that politicians can often influence huge swathes of the electorate by using gimmicky “low tax” incentives to gain votes.

Mike Huckabee has, perhaps, one of the most obvious tax gimmicks of the century. He is suggesting abolishing all forms of income tax. WOW! What a swell idea! What you earn is what you get. Well, apart from social security contributions, health insurance, Medicare, etc….

How does President Huckabee intend to obtain his fiscal income, if not from income tax? By taxing every single thing we purchase. The immediate effect will be a gross rise in the cost of living, but that’s ok because we’ll all have more cash in our wage packets to compensate.

But is it fair? After all, if a basket of groceries suddenly rises from sixty dollars to one hundred dollars, it means the groceries will cost one hundred dollars for everyone, whether they earn $25,000 a year or $225,000 a year.

Isn’t that exactly the same principle as George Bush taxing the wealthy less than the middle class? In fact, if you do the maths, the wealthy may be even better off under Huckabee than they presently are under Bush. Of course, Huckabee spreads the old smoke screen of ‘tax refunds’ for the poorer end of society, promises of higher value food stamps for the really poverty-stricken, etc., but all they truly are is a smoke screen.

Ask yourself one question: if the idea of “no income tax; high sales tax” is so good, why has no other government on the planet implemented it?

The idea of low taxation is very American, and ties in with the general monetarist doctrines in this country, yet taxation levels have nothing whatever to do with citizen satisfaction. The Danes, for instance, have high levels of taxation, yet are known to be the happiest nation on earth.

How can this be so? Again, the answer is relatively simple.

The people of Denmark are taken care of by their leaders. The Danish government taxes its people highly, but unlike its counterpart in America, spends its taxes wisely, on a health system for all, realistic pensions for the elderly, and generous benefits for those unfortunate enough to be unemployed. Danish politicians are very highly paid, so less susceptible to corrupt practices. To the Danish government, its people come first. In fact, a government of the people; by the people; for the people.

Now, where have I heard that before?

Americans are among the unhappiest people on earth, and it’s because they’re insecure. No individual safety net when things go wrong financially; no security of healthcare, even in the prime of life, let alone in old age; a government that does everything in its power to prevent its people obtaining the benefits to which they are entitled when disabled, sick, or unemployed.

The American taxation system is unfair not just because it taxes the middle class more than the wealthy, but because those taxes are not put to good use. Americans see virtually no return for their taxes, unless one accepts hugely expensive and wasteful wars, a degree of technological weaponry sufficient to destroy the planet, or enough ‘pork’ in Washington to feed the third world for a decade, as ‘good uses’ for one’s hard-earned tax money.

Taxation is not about how much one has to pay, but the security – the welfare – it gives in return. It’s about government spending wisely, with its people’s welfare as the prime source when the decision comes to be made: what shall we spend it on?

The dictionary defines ‘welfare state’ as:

“a social system based on the assumption by a political state of primary responsibility for the individual and social welfare of its citizens.” [my bold].

Can Americans say they live in a welfare state?

In truth, America is a free-for-all with the lucky few achieving financial security at the expense of the majority. This is what is called the “American Dream”.

It’s a dream financially supported, but not shared, by the majority of its citizens.

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4 Replies to “The Truth About Taxation”

  1. You’re absolutely right, R.J. Huckabee’s plan is nutty and, instead of talking about the essential stupidity of the plan, the pols are arguing over whether it’s 23% or 30%.

    It is also true that, overall, we, as a government, do not spend money wisely in this country. Not only do we spend an unreal amount on weapons, but even in those areas (such as Medicare) where money is spent on the people there is a great deal of waste.

    We need not only a new president. We need a new Congress. It would be refreshing if those who were running for office would address the points you make.

  2. Ron Paul also wants to end the income tax. Both parties spend insanely (and always to the benefit of their corporate masters), the only difference is that the Republicans increase the national debt rather than pay as they go and they love authority more than society and spend accordingly. Off topic: The New York Times Sunday Magazine has an article on morality and an interesting take on the priorities of liberals and conservatives.

  3. Excellent assessment, RJ!

    And something that always strikes me when considering these matters- The USA prides itself on its Christian values and morals – yet….as you say,

    “Americans see virtually no return for their taxes, unless one accepts hugely expensive and wasteful wars, a degree of technological weaponry sufficient to destroy the planet, or enough ‘pork’ in Washington to feed the third world for a decade, as ‘good uses’ for one’s hard-earned tax money.”

    The hypocrisy of it is astounding.

  4. Al – I’m so very pessimistic about all the candidates, at least those with a likely chance of winning. They seem loathe to address any issues.

    Flimsy – you are right – and thanks for the NYT article. It was very interesting.

    Twilight – I truly believe there is no nation on earth so hypocritical as the U.S.A. There is nothing “Christian” about America or its political policies.

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