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Political capital from class envy

September 26, 2007

Since February 12, 1913, Congress has saddled Americans with a graduated income tax. The income tax was sold as a means of making the country’s wealthiest pay for the burden of an ever-expanding government. Those who opposed the income tax were painted as cold-hearted and uncaring toward the poor of this country.

The Federal government in the role of Robin Hood, taking from the rich and giving to the poor, comes with all the administrative overhead and inefficiencies one would expect from one of the world’s largest bureaucracies. While Robin Hood was the champion of the poor, let’s not forget he was also a thief. He stole wealth from those he thought were rich and redistributed that wealth to those he deemed more worthy of it.

But who is more deserving of the fruits of his own labors? Government has no vested interest in whether you succeed or fail. The guy you’ve been buying lunch for gets mad at you when you stop paying. The only true beneficiary of your labors should be you.

No, I’m neither cold-hearted, nor uncaring of the poor. I’m simply a guy who sees more and more of his paycheck being siphoned off by Federal, State and Local governments.

When Uncle Sam subjected Americans to the graduated income tax, under the authority of the 16th Amendment, it applied to only one half of one percent of the populace. According to The Fair Tax Book, in today’s dollars, a 1% income tax was levied on those earning more than $250,000 per year and a 7% income tax was imposed on those with yearly income in excess of $6,000,000.

The only people who complained about the new income tax were the very small minority of Americans who were forced to pay it. Those at the bottom of the economic ladder were told that the rich were being soaked to make their lives better, because the Federal government cared so deeply about their plight.

Not many people will complain about getting something for nothing. But that was not really a case of “something for nothing.” Those elected “representatives” wanted votes in return. Like a cat bringing a dead mouse to his owner’s feet, members of Congress went home with proof of their worthiness to the voting public. Only instead of a dead mouse, it’s money… other peoples’ money.

Over the course of the next 90+ years, both the tax rates and the numbers of those forced to pay taxes have greatly increased. And every year we hear politicians proclaim that the rich should shoulder more of the burden of caring for an ever-growing government and relatively stable number of poor.

A letter from the Congressional Budget Office to Senator Kent Conrad showed that 2006 was a bumper year for revenues attributed to personal income taxes. The American taxpayers paid a whopping $1.044 trillion in personal income taxes. Corporate America also paid $354 billion in income and $1.009 trillion in other taxes. That huge amount of money in the form of tax revenue still left the Federal government with an estimated deficit of $248 billion.

Fiscal Year 2008 estimates show that revenues will be increased by $255 billion. Even with that drastic increase, we will still have a budget deficit of $239 billion.

You’d think that with a national debt exceeding $4 trillion, our Federal government would take the motto “doing more with less” at least a little bit seriously.

Lately our elected “representatives” have been clamoring about bailing out all the banks that loaned unqualified buyers huge amounts of money to buy homes that their loose lending policies help drive up the cost of. And now the bankers have gone to Washington to, in the words of Country Wide CEO Angelo Mozilo, “help these people stay in their homes where that’s possible.” He’s counting on the American taxpayer, by way of Congress, to bail his troubled company out. And again, the class envy card goes to the top of the deck.

Mr. Mozilo went on to say “with constraints now being placed on lending, particularly subprime, is the gap is going to widen dramatically between the have and have-nots.” So it becomes apparent that Robin Hood (the Federal government) is left to separate more wealth from those evil rich creatures and subsidize home ownership for those less fortunate. And they’ll quickly assure us that it’s the homeowner, not the banks, who will benefit from the coming bail-out. And it’s appealing to the masses because they use class envy to disguise the truth. After all, who doesn’t want a rich guy to pick up the tab? Who can say no to “free?”

Our elected “representatives” tell us repeatedly how deeply they care for the poorest among us. Yet instead of “teaching them how to fish, so they can feed themselves” they create new programs designed to make them increasingly dependent upon government.

There has been a lot of talk in Congress over the past year or so about another windfall profits tax on those evil oil companies. We pay approximately 18.4 cents a gallon in federal taxes. Yes, I said we. The simple fact is that the buyer (you) pay the price for taxes levied on businesses. You pay for it in the form of higher prices.

Next time you hear your Congress critter say something about soaking the rich, ask yourself who will benefit from this redistribution of wealth. Hmm… that’s a good topic for another day.

Next time, we’ll discuss the attempts at making the tax burden seem just a little bit lighter, while busily collecting ever-increasing revenues.

Until next time,
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