Thursday, January 10, 2013

What Is Wrong With The Current Tax System?

Perhaps I hold but a juvenile view of the US tax system, and as such a small observer in an ever increasingly complicated system thereby lies the chance that my opinion on the subject may be elementary and best laid aside.  My only credentials on this is that I myself, as so many fellow Americans, am a tax payer.  There seems to be little that we may do to avoid taxes, and the crushing weight can be felt as a millstone around the average Americans neck.

    2012 Presidential candidate for the Libertarian Party, +Gary Johnson, explained so elegantly what was wrong with taxing income, "Whatever we tax we get less of."  That is the logic used behind taxing things such as junk food, alcohol, and cigarettes.

    Taxing income has not always been the status quo, before 1913 and the creation of the Federal Reserve there had only been a couple short lived attempts at an income tax which, much like today, were used to fund wars.  Congress later fell into a snafu over capital gains taxes when the Supreme Court ruled in  Pollock v. Farmers' Loan & Trust Co. that those collected from real estate gains, such as rent, and other forms of dividends would have to be apportioned according to the census.

    With the passing of the 16th amendment to the US constitution Congress now had power to tax individual income and to not apportion it according to population.  It is not coincidence that this taxation also began at the same time that the Federal Reserve was also brought into existence.  With the Federal Reserve the United States now had the ability to print money with little over site  and to accumulate more debt. This is not the most grievous portion which I ascertained and will thus proceed to illustrate below.

    It my be my naive understanding of politics and taxes that has brought me to this understanding, but there is an effulgent problem with how taxes are distributed.  Prior to the 16th amendment these kinds of taxes, such as income tax and capital gains, were required to be distributed according to the most recent census, but this doesn't sit too well for less populous states and makes it an onerous burden to try to appropriate funds to pet projects.  But that still isn't even the issue at which I want to base my argument.

    The issue comes from the usurping of power by the federal government through placing heavy tax burdens on the residents of each state and then appropriating the taxes back to the state on condition of complacency.  The first example is in federal funds for transportation.  Although I can see some of the reasoning behind federal grants for infrastructure of interstates and rail systems, and having the commerce clause in the constitution does give them some authority in this area, but then to tack on top of it additional demands such as requirements for bicycle lanes, light rail transit, or number of lanes and HOV lanes.  This is currently one of the things plaguing Vancouver, WA and Portland, OR residents over the issue of whether or not they will receive federal funding for a new bridge to help alleviate traffic congestion between the two burgeoning metropolitan areas.

    In the never ending game of cat and mouse the inevitable finger pointing, name calling, and blame allocation that beleaguers our educational system is one of the most stark examples of this usurpation.  From catastrophic failure of Bush's "No Child Left Behind" to the harmful ambitions of "Race to the Top" where the federal government bribes states for a return of tax money to the "top performers".
Hopefully what people understand from this article is that the money that they are bribing us with was ours to begin with.  Every state has put money into the federal system and then they have to fight and brawl over who gets a bigger portion back.  This is no more ridiculous than the tactics of school yard bullies taking your favorite toy and demanding you do some embarrassing gag before they will return it to you, quite likely broken or devalued in some way.

    I hope that we could agree some day to keep more of our money and to only give to the federal government that which is needed to do that which is impossible to do ourselves, such as national defense, and stop the bickering and power mongering that goes along with so much pork and all else that is wrong with the current system.

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