Are Taxes Making the Average American Poorer?

Resident of North Dakota was quoted saying -

“I would like to be able to know that my home, no matter what happens to my income or my life, is not going to be taken away from me because I can’t pay a tax,” said Susan Beehler, one in a group of North Dakotans who have pressed for an amendment to the state’s Constitution to end the property tax.


“When,” Ms. Beehler asked, “did we come to believe that government should get rich and we should get poor?”


“The same problem kept coming up,” said Charlene Nelson, a homemaker who became a leader of the effort to amend the (North Dakota) Constitution, pointing to what she deems the underlying problem with the property tax. “It means all of us are renters — none of us are homeowners.”


“No tax should have the power to leave you homeless,” said Jim Cox, a state representative in Pennsylvania.

Everyone will have to pay

Government needs to take a moratorium on new spending, cut everything across the board 10%, reduce military, cost of government, and social programs an additional 10%, and raise taxes on everyone by eliminating all loopholes except property taxes and interest, medical costs, and charitable contributions. I know this won't be done, because we keep electing people for all the wrong reasons. 

A Sad Goodbye

A former staff member of mine committed suicide last week. He was 50 years old and as long as I had known him was in constant pain. Doctors never could find a cause and he did not respond to psychotherapy. I often wonder how many lives are lost or wasted in search of emotional or physical perfection.

As we age we all experience aches and pains as our bodies begin to wear out and relationships disappoint. I often reflect on the philosophy of a friend's grandmother - that's just nature's way of having us let go of this world and preparing for the next, so find joy in the little things of every day.

Tax Facts Everyone Should Know

US population - 325 million
US tax filers - approximately 138 million filed, but only 45% of those filers paid any federal income tax

The number of tax payers declined 59% from 2000 to 2008, even though the number of tax filers increased by 10%. The reason for this is less about the amount of income and more about the amount of deductions and credits.

Biggest deductions:
 1. Credit and deductions for homeowners,
 2. Earned Income Tax Credit
 3. Tax deferrals for retirement plans
 4. Lower taxes for non-wage income (capital gains)
 5. Employee benefits (tax free health care)
 6. Other popular credits and deductions - credits for college, child care, job related expenses.

Only 20% of income reported by millionaires come from wages that are taxed at 35%, but income from long term capital gains are capped at 15%. It is important to note that long term capital gains is 0% for taxpayers in the 10% and 15% tax bracket. This was news to me.

Why not lower the income tax rate for the wealthiest to 25% and increase their capital gains cap to 25%? Since 80% of their income is from capital gains, it would raise more revenue. Right?

Fair Taxes?

Read about Dems pushing for "fairness" in tax rate. That's Robin Hood speak for, "Steal from the rich to pay for even more lame brain gov't spending." Is it a "secret" that families earning between $50,000 to $100,000 a year average less than 9% in actual taxes paid or is this politicians and media being deliberately obtuse? Without itemized deductions of mortgage interest and taxes, charitable contribution, etc., we probably would pay our full 15% tax rate, but the reality is - we don't. My fear is that if the Dems succeed in taking an additional 25% or so from the rich to pay for an even bigger government (you do realize none of this extra revenue will go toward paying off our debts), then the middle class is next.

Wild Child

My mother was quite the wild child in her youth. She always said that she wanted to live a hard, fast life and die by thirty-five. We were stationed in Germany when her thirty-fifth birthday arrived and we were due to rotate back to the States. She asked my Dad to extend his tour of duty one more year, so she could postpone flying across the Atlantic until she was thirty-six. Why risk tempting fate? She's now eighty-eight years old.

Ignore the debt - full steam ahead

The general consensus is that it is okay to run up a national debt in excess of our GDP. The figures are so large that it is just funny money to the average person. It's not funny money to the Greeks or other European countries that can no longer pay even the interest on their national debts - that's why they are rioting in the streets.

At the rate we're going, adding a trillion dollars of debt every three to six months, we should default on our interest payment within the next presidential term. Whoever is elected president this year will probably preside over the greatest economic disaster we have ever faced in our history.

Perhaps that is the intention of this current administration - social change through economic disaster.

Check out this website, National debt charts.

• 1900 - debt was 10% of our GDP
• WWI - 30% of GDP
• Great Depression - 40%
• WWII - 120% of GDP
• 1974 - dropped down to 32%
• 1990s - national debt doubled to 66%
• 2001 - down to 56%
• 2008 - up to 70%
• 2011 - 102% of our GDP

We were able to out grow our National Debt after WWII with the greatest increase of productivity and nation building that the world has ever seen. We saw a tremendous building of our infrastructure, but also a tremendous growth in private industry and manufacturing. Taxes were high, but profits even more so.

Can this be duplicated? Perhaps, if we had a leadership in both Congress and the White House that reduced unnecessary regulations, encouraged the development of all energy resources including fossil fuels, and provided incentives for businesses to bring profits back to the US.

I hate being so negative, but I don't see either major party putting the interests of the country over their own.