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K. Lloyd Billingsley - Contributor
[Courtesty of Pacific Research Institute]

K. Lloyd Billingsley is Editorial Director for the Pacific Research Institute and has been widely published on topics including on popular culture, defense policy, education reform, and many other current policy issues. [go to Billingsley index]

A Taxing Meditation
Tax freedom day can't come soon enough...
[K. Lloyd Billingsley] 4/15/04

This year, tax freedom day, the day Americans cease working for the government and begin working for themselves, came on April 11, the earliest it has been since 1967. While a welcome change, that is still not early enough.

"America has one of the most imperialistic tax codes in the world," says the current issue of The Economist, referring to the severe tax bite on American corporations that operate abroad, something few other nations attempt. But things are also bad stateside for individuals. Consider the self-employed.

Today, April 15, they will have to pay whatever they owe the government from last year, along with their first quarterly payment for the current year. Also about this time, the second installment of last year's property taxes come due, a triple whammy. Many discover that the tax code is not only imperialistic but unequal.

If the self-employed person has a good year, he or she is taxed at a higher rate than those who were less productive. But though they pay more taxes, they can't participate in programs they are forced to fund, such as MediCal, California's government health-care system. Their role is simply to pay for it. They must buy health care with their own after-tax dollars. Those who work for someone else get health care with before-tax dollars. Those who work not at all get it paid for by other people's tax dollars.

Most Californians are not self-employed, but they are not out of the woods. The same sharply rising punitive ("progressive" in government-speak) rates apply to them, and the government gets its money even before workers do in the form of withholding. This practice dates from World War II and was supposedly temporary but it became permanent, and politicians now believe they have a prior claim to what people earn. The media and the workers assume this is the way it must be and forget that their vaunted tax refund is simply their own money.

Don't forget the state income tax, nearly 10 percent in California with, count'em, six tax brackets. The state sales tax alone is nearly eight percent. Factor in property taxes, capital-gains taxes, and the multiple fees and assessments for everything from telephones to gasoline. The result is that, for many American families, taxes remain their biggest expenditure, more than such bourgeois trifles as food, shelter, transportation, college tuition, and the like.

Americans in general and Californians in particular remain severely overtaxed, and insulted to boot. Those who simply want to retain more of what they earn through their own efforts get tagged as "greedy" or "the rich." Those who want to take more of what people earn fancy themselves enlightened. This is backwards.

The greedy are those who want to take more of what people earn, without offering anything in return or simply to cover their own incompetence. The current hearings on September 11 show that the billions taxpayers send to the government have not made the populace more secure, a clear example of how the government does less with more.

Meanwhile, government has colonized too much of our lives. We need a tax code that is less imperialistic, and a tax freedom day that comes a lot sooner than April 11. CRO

copyright 2004 Pacific Research Institute




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