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Tuesday, March 16, 2010

Response to Tom Borthwick's Comment

I wanted to respond to Tom's comment on 5 Conservatives that I admire, but it was getting so long that I figured that I needed the full text editor just to make sense of my own words. So here goes...

Tom...Yes I have read Paul Ryan's budget, as well as some of this other work. While I don't agree with all of it, I do agree with his overall premise that the current system is so broke that it can't be fixed.

Broken? The current system is so complicated that most people have no clue as to how it works. Don't believe me though, believe the expert in taxation, the IRS itself. This is a citation from the IRS website, dated January 4, 2010:

"...With more than 80 percent of American households using a tax preparer or tax software to help them prepare and file their taxes..."

(Reference HERE).

Ponder that for a moment Tom. 80% of taxpayers basically say through their actions (not just their words, but with their wallets) that the system is so complicated that they can't figure it out on their own, so they've given up. What does that tell you? Here's what it tells me: The system has been hijacked by financial special interests and good intentioned individuals who want to accomplish social goals using the tax code as their instrument of choice. Nice thoughts, but the net result is an extremely complicated system that has at its core punishment for saving and rewards for consumption. If anything, the opposite should be true, especially for the poor. Anyone believe that unchecked consumption is good? I have a recession that proves that it's not.

As for the middle class, I write this as someone who is solidly there. I finished my 2009 1040 last month and I don't qualify for the vast majority of the tax breaks afforded to those earning less nor do I have the resources to take advantage of the tax shelters & other assorted tools available to the rich. For example, I am now punished because I paid off my mortgage. The government though would reward me if I borrowed more in the form of home equity loan. It's almost surreal when you think about it. All things considered though I was lucky: this near I "only" owed $91.

In short, I think many on the left have been lulled into this sense that the current system is somehow good because it has been deemed as being "progressive". Nothing could be further from the truth & in fact the only progressive thing about it is that the federal government has made PROGRESS in making people think that all consumption is good and all saving is bad. In effect the current system buys off those at the lowest end of the scale as cover for actually benefiting those at the highest end of the scale. The current system is not's perverse. We rail against companies for providing consumer disclosures that are so long as to be unreadable, but yet that's exactly what the government has done with the tax code. I dare say that the more personal experience you have with the system Tom, the more you will see I am right.

We need radical change, and I'll listen to anyone with an idea.


Tom Borthwick said...

I'll not dispute the problems with our current tax system, but Paul Ryan's proposal is not the answer. Nor is Arlen Specter's for that matter.

Sure, I'll listen, I listen to everything. But I want to listen to ideas that help the middle class and make sure the rich pay their share. I don't hear that from any elected, Democrats included.

Stephen Albert said...

I think we agree more than we disagree on this...

What's frustrating for me is that Democrats ignore the issue and allow the GOP to be perceived as owning it. That's a shame, because as I've noted, the current system doesn't help the poor (in fact it harms them via discouraged savings), benefits the wealthy and makes the middle class pay for it all.