Thursday, April 17, 2014

A Necessary Evil?

Like millions of other Americans I filed my tax return by the April 15th deadline. According to the IRS, 85% of the population file on time, with 6% of small business owners and 9% of non-business owner individuals filing extensions. For anti-tax folks like myself the process is nearly as frustrating as the tax bill itself. Longtime readers may recall last year’s post A Taxing Situation sharing my journey as a victim of identity theft for tax purposes. The IRS had 770,000 people who were in the same situation as me. The delay in finalizing the return and issuing the refund (which is really an interest fee loan we give to the government) is already at six weeks. The 2011 delay was 14 months, the 2012 wait 8 months. Frustrating as it all is, and as much as I philosophically am anti-tax, it is the law and I may rant and blog, but I don’t violate. Not everybody has that same response.

People have been resisting paying taxes as long as there have been taxes. In Biblical times the tax collectors may have been unpopular, but Jesus paid his taxes according to several liturgical quotes.

Donald Rumsfeld, former Defense Secretary under Presents Bush and Ford, four-term congressman and former Director of the Office Economic Opportunity sends a letter each year to the IRS "stating he has “absolutely no idea” whether he has filed his forms correctly."
History Commons tells the story of Arthur Porth, a Wichita, Kansas, building contractor who filed a claim in a Kansas court to recover his income tax payment of $151 in 1951. “Porth argued that the 16th Amendment is unconstitutional because it places the taxpayer in a position of involuntary servitude contrary to the 13th Amendment. The court rules against Porth, but the defeat does not stop him. For 16 years Porth continues battling the income tax requirement, finding new and inventive challenges to the practice. He claims that the 16th Amendment ‘put[s] Americans into economic bondage to the international bankers.’ He also argues that because paper money is not backed by gold or silver, taxpayers are not obligated to pay their taxes because ‘Federal Reserve notes are not dollars.’ In 1961, Porth files an income tax return that is blank except for a statement declaring that he is pleading the Fifth Amendment, essentially claiming that filling out a tax return violates his right of protection from self-incrimination, a scheme that quickly becomes popular among anti-tax protesters. Porth becomes an activist and garners something of a following among right-wing audiences, traveling around the country distributing tax protest literature.” After many years of fighting and losing in court, with a propensity of anti-sematic and racist statements along the way, Porth exhausts his appeals and goes to jail. “Though sentenced to five years’ imprisonment, he only serves 77 days.” Port was certainly creative!

Responses to being over taxed vary. According to Mediaite this week “a Chicago man was arrested yesterday for pulling out a sub-machine gun after learning that he had to pay a 22-cent tax for his Diet Pepsi. “ The soda cost $1.79 and the tax is high – 12%. “Court records allege that Shelton got mad at the store clerk, saying that since he was a resident of that neighborhood, he was ‘tax-exempt.’ … He returned to the store carrying a Gucci satchel, from which he pulled out a loaded gun, He began waving the gun around ‘while yelling that he was going to shoot and kill everyone in the store.’”

“Taxes are a necessary evil” is an idiom that means that most people recognize the value of being taxed while disliking paying for them. TheAtlantic has a series of charts that demystify how much American’s pay, and who pays them...a great baseline for a factual discussion, uncommon in most discussion of taxes.

For 137 years America survived and thrived without an Income Tax. Government and the military were funded by excise taxes and tariffs. In 1913 the Income Tax act went into effect – charging “a 1% fee on the rich and a 6% fee on the super-rich.” By World War II that changed and in post-war America the tax code became the social safety net – with the support of the public and the politicians.

Democrats and Republicans are cut from the same cloth. They both have political platforms that redistribute wealth – taxing the public and spending it. Each party has different priorities, but the underlying philosophy is identical. As long as Americans continue to elect politicians from the major parties, taxes will continue to be a necessary evil.

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