Saturday, April 15, 2006

Tax Season 2006

It is over! Another tax year has passed and it time to reflect on the part of government that most affects average everyday citizens. This year seemed to be an exceptionally good year for many people (which means an exceptionally painful one in regards to taxes.) Although it is a duty of every citizen to pay their fair share of tax, I do not believe that the founding fathers intended that American citizens need suffer the degree of intrusion that is inflicted in the name of civic duty. I don't advocate the positions of many crackpot organizations who believe that taxation isn't constitutional, or that the word "United States" is some covert "federal" corporation that is secretly profiting off of your tax dollars. I'm saying that the system is unfair and I contiue to hope that some day financing freedom can become a little less painful to American citizens. Taxes are necessary, for example, in wartime the government should have a right to require taxes of its citizens, as well as tax dollars for maintaining the national defense and enforcing the law through the Justice Department, and some educational support, are worthy of tax support. However the myriad of extracurricular federal progarms are severely burdening Americans.

To demonstrate how massive government has become financially let's consider the payroll of the IRS (the Federal Government's version of Guido) their workforce at last count I believe is 110,000 employees. Figuing the average salary at 40,000 (some are more and some are less) that would amount to at least 4,400,000,000 dollars in salaries per year alone. Not to mention the inflated salaries of our elected officials in Congress, at last count I remember the average pay per lawmaker was 162,000 dollars for a grand total of 87,156,000 dollars to people who for the most part independantly wealthy.

Our Federal government has strecthed far beyond the original intent of the founding fathers, while repealing taxation is rather unlikely (damn near impossible) there are many things that could make the tax system fairer. In my Utopia the IRS would pay interest on all excess refundable withholdings, the social security tax that is withheld would go into retirement focused investment accounts, and the first 50,000 dollars of income would be exempt. Otherwise, I'd like to see the income tax structure abandoned for a national sales tax, a flat tax (with a 50,000 dollar exemption), or tariffs on imported goods. The most important change to make the income tax structure fair would be to illiminate estate taxes.

Regardless the IRS and state governments will continue to intrude and we taxpayers will continue to pay the price affixed to freedom. This past year a couple of my clients made some very profound observations. The first came from a client who was alittle unprepared for the bad news that he would owe, he said the most sensitive nerves in the human body are the nerves that extend from the heart to the pocket book. The second came from a client who has been facing some severe actions from the IRS for noncompliance, he said, "200+ years ago there was a revolution because of unfair taxation, how many generations until our children have to do the same." May our lawmakers consider more efficient means of financing freedom so that its citizens can breath a little easier in an ever more competitive world.


Ethan said...

Hey, will you email me at

Bradley said...

Great post. Since you know a lot more about taxes than I do, what is your take on the Fair Tax?

I'd love to see a post on the subject.