Inside the Capitol

Sunday, April 06, 2008

4-16 How About Those Taxes?

WED, 4-16-08

SANTA FE - So what do you think about paying taxes now? Especially income tax? Do you hate taxes? Have you ever thought you might just be a negative person and that you should feel good about helping the poor, the elderly, the sick and infirm?
Maybe you should be feeling good about helping provide a strong military and strong public safety. Maybe you should feel good about helping our nation educate its children to keep us the world's one superpower, about the consumer protection services you help fund and the nutrition and assistance we provide to other countries.
Ever think about that? Naw. I don't either. Polls show nearly all of us believe
government squanders our money on bridges to nowhere. And that it collects an excessively unfair amount from us personally. We all claim to be unhappy with our tax rate, whether it's high or low. Whether we're rich or poor.
Our current state and federal administrations have cut many taxes in the past several years, but are we any less unhappy about paying them? Of course not.
This year's major tax revolt appears to be another one to protest against paying taxes to support a war. That's nothing new. It goes all the way back to the Quakers not paying taxes in colonial times if they were going to be used for war. The moral to that particular story is that the government always wins.
Then, there's the matter of specific taxes for war. It was done in 1968-70 to help support the Vietnam War. Several months ago, two Democrats introduced legislation to support the Iraq War with a special tax.. Congress hasn't gotten excited about it.
In World War II, we had a very different method of financing the war. The government sold war bonds. Since that was a "good" war, Americans lined up to buy the bonds, even though they had a 10-year maturity and poor interest.
Major advertising companies donated their time to make ads for the war bonds. No product ever had been promoted as strongly. Movie and sports stars donated their appearances in the ads. Soldier heroes were brought back from the front to appear in the ads and at huge victory bond rallies.
During the war, eight bond drives were held, raising $186 billion dollars. Yes, that's right - billions. The population of the nation was only 170 million at the time. Nearly everyone gave, even kids.
There were victory bond drives at school once a week. I took my dime to buy a red stamp that I pasted in my war bond book. When we got $18.50 worth of stamps, we traded them for a bond that would be worth $25 in 10 years.
Secondary school students bought 25-cent stamps that were green. They let adults play too Bonds came in bigger denominations for them. We could have done much better in the commercial market, but this was patriotism and all Americans were anxious to do their part.
How far would you expect a war tax or war bonds would get today?
Somewhat akin to the government's use of patriotism to raise taxes is its fondness for funneling social policy through the tax apparatus. - subsidizing home ownership, helping the poor, encouraging alternative energy, helping industries in distress and promoting long-term stock ownership. Most other countries don't try to do as much with their tax system as we do.
We've created a real mess. The cost of preparing a tax return these days, in terms of time spend and securing the assistance needed is estimated at between 10 and 20 percent of the money it raises for the government. There must be an easier way.
Congress has looked at solutions - a simplified tax, a flat tax, rejecting any "help" from lobbyists. One good suggestion is requiring all members of Congress to do their own taxes. Or let the government do it for us. It has nearly all the data on us already.
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