Tax everything, even after the grave

Thursday, March 19, 2009

At first I thought this was funny. Then I realized the awful truth of it. Be sure to read all the way to the end.

Tax his land,

Tax his bed,

Tax the table

At which he's fed.

Tax his tractor,

Tax his mule,

Teach him taxes

And the rule.

Tax his work,

Tax his pay,

He works for peanuts


Tax his cow,

Tax his goat,

Tax his pants,

Tax his coat.

Tax his ties,

Tax his shirt

Tax his work,

Tax his dirt.

Tax his tobacco,

Tax his drink,

Tax him if he

Tries to think.

Tax his cigars,

Tax his beers,

If he cries

Tax his tears.

Tax his car,

Tax his gas,

Finds other ways

To tax his ass.

Tax all he has,

Then let him know

That you won't be done

Till he has no dough.

When he screams and hollers,

Then tax him some more.

Tax him till

He's good and sore.

Then tax his coffin,

Tax his grave,

Tax the sod in

Which he's laid.

Put these words

Upon his tomb,

"Taxes drove me

To my doom."

When he's gone,

Do not relax,

It's time to apply

The inheritance tax.

Accounts Receivable Tax, Building Permit Tax, Cigarette Tax, Corporate Income Tax, Dog License Tax, Excise Taxes, Federal Income Tax, Federal Unemployment Tax, Fishing License Tax, Food License Tax, Fuel Permit tax, Gasoline Tax (44.75 cents per gallon), Gross Receipts Tax, Hunting License Tax, Inheritance Tax, Inventory Tax, IRS Interest Charges, IRS Penalties (tax on top of tax), Marriage License Tax, Medicare Tax, Personal Property Tax, Real Estate Tax, Service Charge Tax. Social Security Tax, Road Usage Tax, Sales Tax, Recreational Vehicle Tax. School Tax, State Employment Tax, State Unemployment Tax, Telephone Federal Excise Tax, Telephone Federal Universal Service Fee Tax, Telephone Minimum Usage Surcharge Tax, Telephone Recurring and Non-recurring Charges Tax, Telephone State and Local Tax, Telephone Usage Charge Tax, Utility Taxes, Vehicle Sales Tax, Watercraft Registration Tax, Well Permit Tax, Workers Compensation Tax

Still think this is funny? Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids.

What in the heck happened? Can you spell "politicians"? And I still have to 'Press 1' for English?

-- From a friend

Taxpayer heroine: Nina Olson heads the Taxpayer Advocate Service, an independent division within the IRS that is supposed to help taxpayers resolve complaints with the agency when those problems can't be dealt with satisfactorily through normal channels. Each year the advocate must report on problem areas within the IRS that are in need of improvement. This year's submission -- unusually blunt for a government agency -- is a taxpayer's delight: "The most serious problem facing taxpayers is the complexity of the Internal Revenue Code. The only meaningful way to reduce these burdens [of compliance] is to simplify the tax code enormously."

Olson didn't go so far as to advocate a flat tax, but anyone who looks at the report can only conclude that we must start over again. As the report states: "Taxpayers who honestly seek to comply with the law often make inadvertent errors, causing them either to overpay their tax or to become subject to IRS enforcement action for mistaken underpayment of tax. [However,] sophisticated taxpayers often find loopholes that enable them to reduce or eliminate their tax liabilities." The advocate goes on, chronicling the grim realities:

* Individuals and businesses spend 7.6 billion hours a year filling out tax forms for the IRS. "And that figure does not even include the millions of additional hours that taxpayers must spend when they are required to respond to an IRS notice or an audit." Those 7.6 billion hours consume the equivalent of 3.8 million full-time workers.

* The cost of complying with the code comes to $193 billion. Other experts think that assessment is too low and have come up with estimates approaching $300 billion.

* The number of words in the code has grown by 2.3 million since 2001. In 2008 there were more than 500 changes to the tax code. Other surveys have found that the code has been amended some 14,000 times since the mid-1980s.

* No one can cope anymore: "Individual taxpayers find the return preparation process so overwhelming that more than 80 percent pay transaction fees to help them file their returns."

There are countless examples of the code's mind-numbing complexity. For instance, there are at least 11 incentives to encourage taxpayers to save for and spend on education with each having different particulars on definitions, eligibility requirements, income-level thresholds, phase-out range and inflation adjustments.

There are at least 16 incentives to encourage saving for retirement, again with different parameters.

The alternative minimum tax is an atrocity in a class all its own. It was enacted four decades ago to ensure that everyone pays income taxes, no matter what loopholes or deductions they might employ. In 1970 only 20,000 filers were affected. By 2010 the number will reach 33 million. Congress, knowing the outcry that would ensue if it whacked the middle class that harshly, regularly enacts a so-called patch, which results in the AMT hitting around 4 million filers. The biggest trip wires for AMT are family size and living in a high-tax state. In other words, if you have a lot of kids or you reside in California, New York or a similarly tax-greedy state, you will fall into AMT quicksand.

Writes Olson: "Few people think of having children or living in a high-tax state as a tax avoidance maneuver, but under the unique logic of the AMT, that is how those actions are treated."

And on it goes.

Our frustrated national taxpayer advocate recommends: "The tax laws should be simple enough so that most taxpayers can prepare their own returns without professional help, simple enough so that IRS telephone assisters can fully and accurately answer taxpayers' questions. ... The tax system should incorporate a periodic review of the tax code -- in short, a sanity check.

President Obama could steal the tax issue once and for all from the GOP if he took up the flat tax. Such a radical reform would rocket our economy out of recession and onto an awe-inspiring growth trajectory. But this is one rendezvous with destiny that our new chief executive will likely miss. Too bad for him and, more important, for us and for the world.

-- Steve Forbes

Profound statements: "I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."

-- Winston Churchill

"A government which robs Peter to pay Paul can always depend on the support of Paul."

-- George Bernard Shaw

"A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money."

-- G. Gordon Liddy

"Democracy must be something more than two wolves and a sheep voting on what to have for dinner."

-- James Bovard, civil libertarian (1994)

"Foreign aid might be defined as a transfer of money from poor people in rich countries to rich people in poor countries."

-- Douglas Casey, classmate of Bill Clinton at Georgetown University

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

-- Ronald Reagan (1986)

"If you think health care is expensive now, wait until you see what costs when it's free!"

-- P.J. O'Rourke

"In general, the art of government consists of taking as much money as possible from one party of the citizens to give to the other."

-- Voltaire (1764)

"Just because you do not take an interest in politics doesn't mean politics won't take an interest in you!"

-- Pericles (430 B.C.)

"The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery."

-- Winston Churchill

"The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin."

-- Mark Twain

"A government big enough to give you everything you want, is strong enough to take everything you have."

-- Thomas Jefferson


Wasted energy: As Senator [now President] Obama and his equally unknowing friends push windfall taxes, ExxonMobil has already given the U.S. A massive windfall. As economist Mark Perry has noted, ExxonMobil will pay more taxes this year to the U.S. Treasury that the bottom 50 percent of all taxpayers -- combined. In the first half, ExxonMobil's aftertax income rose 15 percent to $22.6 billion.

A lot of money, to be sure, until you consider that ExxonMobil paid $61.7 billion in taxes -- also a record. People shouldn't fall for such cheap, recycled class-warfare argument. Yet many will. Sadly, it will saddle big energy companies with higher taxes and crimp their exploration and drilling budgets. That means less oil on the market and higher prices.

We know this because it has been tried before. Jimmy Carter's windfall profits tax led to a 6 percent drop in domestic oil output and as much as a 15 percent surge in oil imports, according to the Congressional Research Service. Now, Obama wants to play it again.

-- Investor's Business Daily

Gary Rust is chairman of Rust Communications.

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