Of Death and Taxes
Attributed to Benjamin Franklin, “In this world nothing is certain but death and taxes”.
Certainly we will all die; it is a result of being born. Taxes, however, are not necessary; they are only a symptom of man’s desire to live in a civilized society.
If we were individually civilized and altruistic, understanding the needs of all and willing to do what it took for the good of all, we would need no government. But we are not ants, or honeybees, we are individuals and so institute governments to maintain society in a manner reflective of the general population.
Government is needed to provide those services which are necessary for society, which serving all of society, should be paid for by all. If left to ourselves, as individuals, we will not all voluntarily pay enough for those services, so we have taxes. From those taxes governments initially provide roads, police, courts and jails. Then as people find government can do things beyond those basic functions other things such as fire departments, parks, water systems and welfare programs are created. Of course as programs increase in number and size, taxes have to increase to pay for them.
A sales tax equally applied on all products and services would provide enough taxes to easily supply all government’s needs. It is simple, is paid and finished, and requires relatively simple paperwork. Instead of a simple tax there are taxes on capital gains, alcohol, cigarettes, personal property, real property, gasoline, automobiles, prepared food, car rentals, plane tickets, hotel rooms and more. The list is seemingly endless. To this list of taxes are added tax breaks. Deductible expenses include medical, alimony, business losses, interest, and charitable donations. All of which make the tax code more complicated.
There are three reasons we have such a variety of taxes. The first, as stated previously, is to supply revenue to government. The second is to mislead the people. Imagine a straight sales tax of 30%, which approximately equals the total tax burden in North Carolina. Go to the store with your whole paycheck, then spend 30% more than the marked price for everything. Imagine the ensuing opposition to taxes. Obviously politicians can’t have the people realizing how much they are taxed so they are constantly looking for “alternative revenue sources”, a politician’s term for “new taxes on something different.”
The third reason is to alter specific behaviors. Taxes on tobacco and alcohol are known as sin taxes. They are supposed to discourage behavior which politicians have decided are wrong, but not wrong enough to make illegal. Deductions for interest are intended to encourage people to borrow money: this helps our consumer oriented economy while helping lending institutions become more profitable.
Every tax and deduction has its good and bad points. The combination of them influences personal and business decisions which, instead of being based solely on what is good for the person or business, are too often based on tax considerations.
Taxes do other things too, among them indicating the position government takes about property. No matter what the tax rate, property taxes are synonymous with rent except it is paid to government.
It is a simple conclusion. When one buys a piece of property which is taxed every year, the purchaser’s obligation to government is to pay those taxes. If there is a loan on the property from a lending institution, it can be paid off, but not property taxes. Every year they come due again, and if they are not paid the government will evict you from your property and make it available to someone who is willing to pay. It is the position of a landlord to a tenant. The tenant can never stop paying, and he never owns.
So when someone asks if you own your own home, the correct answer is “The government is allowing me the responsibility to pay taxes on it at this time.” This tax, above all others, should be eliminated and replaced with a sales tax. People should be able to own their homes and property, not rent them from the government.
So while taxes may be inevitable, some are worse than others. If our elected leaders were interested in the good of the people and having a just society, they would work towards these ends. Too often they do not. No more needs be said.
Lewis Guignard, Used by Permission
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