Untold Tax Outrages

Many of us are busily crunching numbers at this time of year, feverishly trying to get our taxes done. Most of us only become aware of the large amount of federal income taxes we pay if we're required to dig deep into our pockets and write out a check for an amount on top of all the thousands of dollars already withheld by our employer and send it in with our tax returns. Ouch! That really hurts a lot! Withholding doesn't seem to hurt as much. It's a great scheme they've got. The politicians have lulled us to sleep by requiring our employers to withhold taxes from each paycheck. That way, we tend to focus only on our net pay, an we don't even notice how much we are actually paying. In fact, many of us are euphoric when we find out that we are getting a small "refund." We are blissfully unaware that this "refund" is only a result of an over-payment of taxes in the first place! It's not free money from heaven. If each of us had to sit down each payday and write out four checks, –one for federal income tax, one for federal social security tax, one for federal medicare tax and one for state income tax we would probably be outraged enough to take action to get this confiscatory system reformed! But since we don't have to write such checks, we're all too happy to pay through the nose. We hardly even notice it.

The "payroll withholding" system which FDR slipped into the IRS code in the 1940s has served as the biggest single "opiate" which deadens the pain of taxes and blinds us to the real tax burden we all pay. That, along with the fiction of corporate taxes, which each of us as consumers really pay in the form of higher prices, hides the onerous cost of our bloated federal bureaucracy. It keeps us from noticing how much government really costs us. We go blissfully along, ignorant of the true cost. In reality our tax burden, in all of its forms, takes every penny we earn clear up to late April or May! It's an outrage!

Another outrage most of us do not even know about: The Earned Income Credit (EIC). This is a welfare program set up by the leftists which really has nothing to do with taxes. It has one purpose: –to take money from those who produce it and give it to those who don't. Under EIC, people who have qualifying children can get up to $4,300 in gratis, free, bonus cash from their fellow Americans. Yippee! This really is like free money from heaven! Only it isn't from heaven. It's paid by you and me. If you had a federal tax obligation last year of more than $4,300, likely a neighbor down the block got your money in the form of an EIC check. How would you react if that same neighbor had showed up at your house and pilfered the $4,300 out of your piggy bank? You'd call the police! You'd scream bloody murder! You wouldn’t stand for it! Oh really?. Well, you are standing for it, –every year, year after year, after year, after year. Many, many of these welfare takers are hardly poor. You needn't pity them. Let me explain: If Bill Gates' mother lived with him in his billion dollar mansion, and earned $14,000 per year, she could get a $4,300 check from the poor sucker taxpayers by claiming 2 of his children for the EIC benefit. And he could still claim the same two kids on his own tax returns as dependents! It sounds hard to believe, but it's true. The law allows a direct relative to claim children for EIC benefits regardless of the total family income!! It’s true! Millionaire families all over America are getting EIC credits year, after year, after year! It's an outrage!!

Yet another outrage. The EIC is a potent disincentive to marriage. You do much better tax-wise in many cases as two single people than you would as a married couple. Let me Illustrate:

Ronald and Mary Jones are a married couple with a couple of kids. Ron makes $75,000 per year. Mary makes $14,000 per year. At normal withholding rates, and by filing a joint return with two dependents deductions, they get a tax refund of $1,794, –a pretty typical American taxpayer story. Now, let’s look at the same family in a different way. Ron and Mary are not married. Everything else is the same. They live in the same house, and have the same kids, jobs, withholding, but they’re not married. Ron would file as head of household, taking both children as dependent deductions, but now his tax situation has changed considerably. Instead of getting a refund of $1,794 he only gets $256. “No fair” he cries, “married people get all the breaks.” But wait. Now Mary can file her taxes as a single person and claim both children for an EIC. As a result, she gets, –are you ready, a whopping $5,192 refund check from Uncle Sam which is to say from you and me. That’s right!! By not being married, this couple benefitted to the tune of $3,654!!! The marriage penalty is $3,654!! And this goes on, perfectly legally, all over America, year after year, after year, after year. It’s an outrage!!!

It is time for America to wake up to these and other outrages in our tax system. It’s time to enact a fair tax system for all. It’s time to enact The Fair Tax. It would eliminate these outrages, and many others. Check it out. The time has come to write your senators and congressmen. Let’s pass the Fair Tax!