Once again we’ve entered that joyous time of the year — tax time! In honor of this celebrated season, I have chosen to devote some attention to our nation’s present tax code.
I’m sure many of us, from time to time, have had fantasies of engaging in subversive terrorist activity with the sole intent of destroying that most revered of all institutes, the Internal Revenue Service. We all have anecdotes of family or friends who have been wrongfully shafted by that blessed establishment. My own family received a cordial letter several years ago which stated the following:
<ul> <li>you wrote to us and asked for advice about a specific issue;</li> <li>you gave us the complete and correct information for the specific tax issue;</li> <li>we gave you specific written advice;</li> <li>you followed our written advice in the manner we outlined; and</li> <li>we charged a penalty because you followed our advice.</li> </ul>
Feel free to share with me any insight you have into to this logic.
In addition to the follies of the IRS, there is another problem with our current tax system which bears our consideration: Is it healthy for a society to discourage achievement? Sure, it’s easy to snicker when we hear of a tax increase for the rich, but a subsequent question arises. Is the current tax code beneficial, or does it discourage productivity, while encouraging mediocrity? Throughout this article, I am not referring to those with the wealth of Mr. Gates; far from that, in fact. I am speaking of those middle class individuals and families with an annual income starting at $60,000. This income places them in the higher tax brackets, but they are by no means wallowing in wealth.
In recent years, many of these individuals and families have seen a dramatic increase in their tax rate. When all state and federal taxes are combined, many end up paying 40, 50 or 60 percent of their annual income in taxes! Some of the hardest hit are those who run small businesses that provide jobs and revenue vital for the health of every community. Within the last decade, many a small business has collapsed under the crippling weight of the tax code. Does this discourage others from venturing into the noble world of small business ownership? Yes. Does it encourage current small business owners to throw in the towel? Yes again. Is this healthy for our communities?
When I received my last paycheck, I cringed at the amount taken by the government before I even saw it, knowing that much of it would go to programs I don’t even want to support while robbing me of the opportunity to give to those I do.
I cannot imagine the indignation that would rise up after investing extensive time and money into education and then establishing and cultivating a small, locally run business. After several years, I finally begin to reap the benefit, only to have 50 percent of that benefit usurped by the government to be used at its discretion, which is usually in direct contrast with my own. Half of my efforts would seem in vain. Why put myself through such agony when I could instead easily go to work for some large, national corporation, providing far less a service to my community, but keeping a significantly greater percentage of my income, to be allocated as I see fit.
Again I ask, does this policy promote the health of the community? I think not.
Another example of punishing achievement is found in the Hope Scholarship, a new educational tax credit christened after the birthplace of its founder, William Jefferson Clinton. In order to qualify to receive this tax credit, combined family income must fall below $100,000, regardless if the family has one child or three children attending institutes of higher learning.
This stipulation prompted the Los Angeles Times to suggest winning strategies to "play the aid game." Their suggestions "fall into two categories — sheltering assets and reducing income." According to the article, income reduction is best started "when your child is in his or her junior year of high school." Sounds like a winning principle to me: reduce productivity, receive reward. Just the lesson to teach junior as he heads off to college.
What would transpire if SPU decided to punish achievement in a similar way — all students with a 3.7 GPA or higher automatically lose their scholarships and financial aid. Naturally, there would be significantly less of an incentive to fulfill one’s maximum academic potential. In fact, I venture to say it would discourage achievement. I think we can all agree that it would not establish an environment which promotes academic excellence. This same principle applies to the work place as well.
What does the Bible have to say about taxation? Nothing, you may say. Well, surprisingly, the Bible does weigh in on the issue.
For instance, when the people of Israel were clamoring for a king, Samuel warned they that "he (the king) will take one-tenth of your seed and of your vineyards É he will take a tenth of your sheep and you will become his servants É and you will cry out on that day because of the king that you have chosen – and the Lord will not hear you" (Samuel 8:15).
That was supposed to be the worst case scenario, designed to discourage the Israelites from their desire for an earthly king. Ten percent would seem like paradise today. In Joshua (17:31), heavy taxation is used on those enemies whom the Israelites desired to drive out of the nation. When Solomon’s son Rehoboam raised the already burdensome tax rate, the Israelites didn’t stand for it. They revolted and stoned the king to death (I Kings 12:11-18).
Maybe we need a revolt today. No, I’m not suggesting that we stone anyone, but something more American like a demonstration might be suitable. Perhaps similar to the one held years ago in Boston concerning the tax on tea.
Only this time, instead of tossing tea into the bay, what shall we toss? Oh, I know — how about those politicians responsible for the high taxes.
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Title: Tax code needs revision | Author: Erin Carey | Section: Opinions | Published Date: 1999-02-24 | Internal ID: 499