Wednesday, April 11, 2012

Tax Season and Obama's Stupidity

So I was stumbling around the internet when I came across this article: 10 Things I Hate About Tax Day

I agree with the majority of things this person hates, but a couple of their arguments struck my "WTH" meter.

8: Taxophobia - Their argument that people need to stop complaining they are getting taxed so much when they pay a lot of money already for various other things is just plain silly. It doesn't matter how much someone spends of their own money in relation to how much they pay in taxes. It's our money.

That said, me personally, I don't pay $10000 a year on our vehicles, I don't pay $2.50 for bottled water (even the few times I purchase the junk at all instead of just drinking tap water it's $1 at most), I refuse to pay $5 for a cup of joe, and I won't pay more than $100 for a pair of shoes, that then on average lasts me 3-4 years before I replace them. My current pair of non-gym shoes are actually 7 yrs old in a few months, I paid $60 for them in a shoe store in Okinawa back in 2005.

I do happen to think 25% is a rather high tax rate for only making $50k/yr, since I get taxed at the single rate throughout the year and don't get the cash back until Tax Day when it gets recalculated at 15% when the wife and I file jointly. Overall we pay a good deal more than the $2700/yr in the example (which would only be 5.4% btw). The rate itself wouldn't even bug me though to be honest, if it wasn't for all the government waste, and regardless of how much we pay in taxes we have every right to be pissed at the government for wasting our tax money. The people who don't get to whine are the ones who receive a larger check back from the government than they actually paid into the system (and they don't for the most part, they love their free money and consistently vote Democrat).

9: It's Regressive - The latter part of the argument is cancelled out by their own example in number 8. Complaining the dishwasher gets taxed at 25% if the makes more than $9k, right after pointing out that someone making $50k pays barely more than 5%.

Also, yes, that plutocrat whose primary source of income is capital gains pays 15% or less. Do you even understand why? It's because the money they make on those capital gains investments was already taxed when it was originally made. Why should it be taxed again when they reinvest it? Also, the 15% tax is applied to all of the money they make, including the initial investment amount. You want screwy, how about this?

You go invest money in a company. When that company makes its profits for the year it is taxed on those profits after their various deductions for business expenses (but not their required share of the SS and Medicare payments for their employees). Then the employees get paid, and they are taxed on their income. Then the investors receive their share of the profits. The entire amount they receive back is taxed at the 15% rate, then they apply their deductions, but only up to a certain amount (I don't remember the max off the top of my head). This amount does not cover the entire initial investment in most cases, so they essentially just got taxed on wealth they already had before it was invested! On top of that, most of those investments are made into... wait for it... just a moment longer... That small business owner you are complaining is getting hit with the 35% tax on personal income.

So the investor whose money helps make that business possible is getting massively taxed when you look at the overall picture.

That's not to say the small business owner isn't getting screwed too, they most definitely are, and it'll only get worse if Obama manages to get his way to increase the taxes paid on those evil "millionaires and billionaires" making more than $250k/yr as a couple. Most people don't realize that the majority of small business owners (all the mom & pop places) file their taxes under personal income tax in order to avoid the massively overblown corporate income taxes, the same taxes that Obama is ALSO trying to get increased, rather than decreased.

Anyone with half a brain realizes that large corporations themselves don't actually pay taxes. Any increase in production costs, taxes, regulations, etc are pushed onto the customer. As regulations increase requiring cars have more and more safety equipment the various companies just increase the prices to compensate so their profit margin isn't affected. That's called good business. Lower profit margins deter investors, it makes the CEOs look bad, so they find ways to cut costs (usually by downsizing) or they increase the cost of their end product. Who do you think ends up getting shafted from this? Middle and low income Americans that then have a harder and harder time being able to afford the products necessary to get by.

Why does the government not do anything about it? Because it effectively turns the corporations into tax collectors for the government. Those corporations rake in millions/billions a year, which are then taxed as income. Then the government turns back around and taxes the people that work for them. One or the other needs to go, at the very least they both need to be seriously reduced. That's why I support Paul Ryan's budget plan, for the most part. I think their higher tax bracket needs to take effect with a bit higher income range, the $1mil or so range would be best IMO if we really have to have more than one tax bracket.

Best way to even it out as far as I'm concerned is to make the higher tax bracket 15-20% instead of 25%, and then limit deductions on personal income to 5% of your total income, then adjust corporation taxes down to 20% or less while putting a section of the new tax law that says companies have to lower the cost of their products in the state by a corresponding drop in price when the law goes into effect.

Then you have the President trying to explain how federal spending works, and doing a miserable job at it. First of all, he made the promise that he would cut federal spending by half before the end of his first term, and instead increased it by nearly 50% in less than 4 years. Hint for you Mr President, you went the wrong way. "So I believe deeply that the free market is the greatest force for economic progress in human history." Well, he got the words right, but then he goes and makes statements refusing to lower the corporate income tax rate, and if the SCOTUS doesn't overturn Obamacare we'll have the highest corporate income tax rate in the entire world by a good bit by 2014.

"But I also share the belief of our first Republican President, Abraham Lincoln -- a belief that, through government, we should do together what we cannot do as well for ourselves." Followed by, "That belief is why we’ve been able to lay down railroads and highways to facilitate travel and commerce." Someone on his staff should have mentioned to him the fact that the transcontinental railroad project resulted in the companies going bankrupt and requiring government bailouts on multiple occasions. History's a b$%^&.

"Show me a business leader who wouldn’t profit if more Americans could afford to get the skills and education that today’s jobs require." People might not realize this (though I'm pretty sure most of them do) but the cost of a college education has steadily gone up the more available various government subsidies have become. Get rid of the subsidies and costs will go down because people won't be able to afford them. At the same time we'll get rid of a bunch of worthless Liberal Arts professors and students because the colleges won't be able to support them or their programs (the program itself isn't a bad basic program, but so many students expecting to get a job with a BA in Liberal Arts is freaking stupid).

"They keep telling us that if we’d convert more of our investments in education and research and health care into tax cuts -- especially for the wealthy -- our economy will grow stronger." Hey dummy, the Paul Ryan plan you hate so much? It decreases the tax rate for nearly the entire middle class too, not just people who make a ton of cash. You know how much those millionaires and billionaires will get for a tax cut? 3%, that's it. They'll go from a 28% base rate to 25%, before deductions of course. But guess what, his plan also calls for closing a bunch of those deductions and loopholes. On top of that, people like me who pay 25% through the year on a $50k salary will instead only be paying 10%. That is a HUGE tax cut for the middle and lower class American. But just keep ignoring that fact, the MSM sure as heck won't call you on it.

"Now, the problem for advocates of this [trickle down] theory is that we’ve tried their approach -- on a massive scale.  The results of their experiment are there for all to see.  At the beginning of the last decade, the wealthiest Americans received a huge tax cut in 2001 and another huge tax cut in 2003.  We were promised that these tax cuts would lead to faster job growth.  They did not.  The wealthy got wealthier -- we would expect that.  The income of the top 1 percent has grown by more than 275 percent over the last few decades, to an average of $1.3 million a year.  But prosperity sure didn't trickle down."

Newsflash: The economy bombed because of the housing market. The housing market bombed because the government (idiot Republicans and Democrats alike) got involved through Freddie Mac and Fannie Mae guarenteeing bank loans for highly risky investments. Highly risky investments required by law because of quotas instituted by the FDIC forcing banks to give loans to lower income people that couldn't afford to pay them back and threatening (in the case of many smaller local banks following through) with shutdown or refusal to allow expansion if the quotas aren't met. Yes, that's right, the federal government was refusing to allow a business to expand on their own choice, effectively deciding who wins and who loses in our banking industry. Guess who benefitted the most? A bunch of those large banking corporations like Bank of America, Chase, and Citigroup that received government bailouts to keep from going under who then purchased the smaller local banks that were forced to also take toxic loans but weren't large enough (or giving enough to the right group of people) to get any of that bailout money.

I could go on, but those are the reasons I get mad about the amount of taxes I am forced to pay to the federal government. Because of bull$%^& programs and bailouts run by the government, wasting our money, and contributing to massive overspending that has to be curtailed before the whole country collapses and devolves to the level of Greece with their street riots and molatov cocktails, or worse.

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