Hopefully this does not end up being too long. Frustration and Taxes. The component that I found last week turned out to be a dud. Frustrating in that I had gotten focused on going down that path only to find it blocked. Even though it is open source, it is written in such a way that I cannot even debug and fix the issue. The example they provided did not work. Sometimes free stuff is worth nothing or in this case a negative amount.
Taxes are frustrating. But probably not in the way you think. I pay taxes every month. I file forms every month, every quarter, and several times every year. But even that is not the point I am speaking of. People want to get the most value for their money. During a recent trip to Target, the cashier said to me that there was a $5 coupon for the item I was buying and did I want to use it? Realizing what they had just said and that I did not have any coupons, we had a good laugh about it. Of course I wanted to use the coupon they were offering me on the spot. Here we have the same item either for $30 or $25. The same exact item.
Taxes are just like that coupon, except in reverse. 30 years ago, I had it explained to me by a well off person that the goal to having more money was to pay less tax. People with money tend to know how to do this. But think about this a bit. What this really means is that anything that is taxed is something you will less want to use when compared to something not taxed. Let this sink in: Tax something you do not want done.
In a broad sense, any money a government collects is a tax. They do not call them taxes, but they have all the attributes of taxes. MARTA fares as taxes? Think about it. If MARTA was free, you would be more likely to use it. Of course, the government does not actually give free stuff. Anything given for free is paid for by taxes of another sort. Including MARTA or State Parks or Welfare. The government does not create money. It taxes something to pay for that free service. Police officers are paid by tax dollars. Public schools. Roads. But there are a couple taxes I want to point out specifically: Sales Tax, Income Tax, Employer Tax, and Commercial Tax.
Sales Tax says don't buy it. Or if you do, buy it in a way that you pay less tax. My parents reminded me this past week that this is a real objective. They were visiting, but only bought the bare minimum amount of gas while here. They preferred paying a cheaper price in a different state. So Georgia lost out on some tax revenue because our gas prices are higher because of taxes. Those of us that live here do not tend to notice. This is especially true for those in the Atlanta metro area, where gas prices tend to be more competitive and cheaper than the rest of the state. So don't buy gas in Georgia, because we tax it. National sales tax means those with the means will buy stuff from outside of the country to avoid taxes. If there is a way, someone will abuse that way.
Income tax says pay people less, but give them some un-taxable benefit. Consider two jobs, one where you get paid $5 an hour and another paying $6 an hour. The $5 an hour lets you work from home so you have no commute. The $6 dollar job requires you to commute for 2 hours a day. Take the $5 per hour job as you save on taxes, fuel, and most importantly time.
Did you know that companies pay taxes for each employee they have? This is beyond the taxes taken out of your check. Employers have to pay extra amounts for Social Security, Medicare, and unemployment insurance. So these employer taxes say two things: Pay workers less and hire fewer workers. The Federal and State governments by their taxes want less people employed and those that are paid less. Think about that. Raise the minimum wage and even fewer people will get hired to offset the additional tax cost to companies. Sure people deserve a wage that allows them to be comfortable. But as long as you have employer taxes, companies are encouraged to do as little as possible.
Do you remember the Boston Tea Party from history class? The lesson in that was this countries aversion to double taxation without representation. Some corporations are structured such that the taxes on the earnings are paid by the investors (owners) of the company. Other companies pay taxes on their earnings, then the owners pay taxes on the profits. This is why Walmart does not pay a significant amount of corporate taxes, because that tax is paid ONCE by the investors instead of twice. Yes, corporations hide money. If given the opportunity, would you like to hide your wages from taxes? Especially if you could use that hidden money without restrictions? This is why company’s setup offices in Ireland and other foreign tax havens. Corporate taxes compel the companies to do so. It is not a problem of the companies avoiding taxes, but a problem of the investors not paying taxes.
So our current tax agenda would have you not buy anything, not get paid to work, and hide any money you do have in your mattress.
Government services have to be paid for somehow. Taxes that are fair, unavoidable, and minimize the negative impact are what we need. I do not know what that is, but I know this: The current proposals do not work. Want companies to hire more people? Keep income tax, eliminate employer taxes, and give companies a corporate tax break for wages paid. Want a National sales tax? Tax goods brought into this country at a higher rate than buying them locally. Unfortunately, that violates several trade agreements. Want companies to stop hiding money? Start taxing the movement of U.S. Dollars to other country, regardless of means. Forget double taxes. We already pay taxes on the same thing more than once. Give tax breaks for keeping the money here.
Is that all fair? Probably not. But think about it next time you see someone spout off a tax plan or spending plan to fix this countries problems. How can someone avoid that tax or how is that free thing paid for? Meh. Back to my hole.
