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WORD COUNT
638
APRIL 30, 2008
TAXES ARE WORTH FIGHTING OVER – by William A. Collins
Taxes are,
A great success;
If you pay more,
And I pay less.
About a century ago
the U.S. joined the rest of the civilized world and adopted a tax system
that collected more from the rich and less from the poor. At least we
made a good try at it. After all both Jesus and Karl Marx had suggested
something along those lines.
Oliver Wendell Holmes
famously referred to taxes as the price we pay for civilization, and
while we all pretty much favor civilization, we’d just as soon somebody
else paid the taxes. Naturally the rich don’t want it to be them. So
successful have they been that eight states still don’t have an income
tax, and the federal one has more loopholes than the Alamo.
Take for example,
hedge funds. For years their operators have gotten away with paying
only capital gains rates (currently 15 per cent) on income, instead of
the 35 percent more common among other economic victors. In our part of
the state this nouveaux wealth at public expense has unfortunately
driven real estate values up and architectural values down. Land of the
starter castle.
This capital gains
rip off, and other gimmicks like artificial trusts to avoid estate taxes
and the moving of corporate registrations to sleepy Caribbean islands,
have robbed the Treasury of countless billions which must somehow be
made up. Guess who does the making up. That’s right – the average
citizens who have their taxes withheld by the boss every Friday.
The worst of these
gifts to the greedy occur at times when Republicans control the White
House and both houses of Congress. Today we know those times well.
Once such laws are in place it then takes similar control by the
Democrats to repeal them. That time may be coming soon, whereupon we
will see if the Dems actually have the gumption to change back. After
all, they covet rich people too. What politician doesn’t?
Not surprisingly
federal tax policies tend eventually to seep down to the states. It’s a
lot easier to plagiarize Washington’s forms than to start afresh. And
we should probably be grateful about that. If you think Washington is
corrupt, try the statehouses. Thus the federal-style state income tax
has become widespread and happily so.
So too has the earned
income tax credit (EITC). This innovation emerged during Richard
Nixon’s time, which shows just how far out of character desperate men
will stray in order to fight off the inevitable. The EITC supposedly
returns tax payments to poor people to help them live, and
simultaneously stimulates the economy. In fact the law is so
comprehensive that it “returns” money to some low-income people who
never paid anything in the first place. All they need do to get a check
is file a return. In this era of a widening gulf between rich and poor
it’s any inspired idea. No one ever said Nixon was dumb.
Now the states are
onto the EITC too. Already 22 plus DC copy the feds. More are on the
verge. Connecticut, Land of Steady Bad Habits, has been too constipated
to adopt such a program so far, but this year even our own lawmakers
have now gotten the bill out of committee. We pray that our staggering
economy does not delay reform for yet another year.
But as good sense
finally batters down the front gate, it also flees out the back. Our
hysterical governor has now proposed a cap on local property taxes.
Proposition 13 redux. Since it succeeded so well in degrading education
in California, why not try it here? And in supposedly stable
Massachusetts there’s a referendum to get rid of the income tax
altogether. Spare us, Lord.
Wise tax policy
requires a sound mind and strong backbone. Maybe that’s another
argument for universal health insurance.
--
Columnist William A.
Collins is a former state representative and a former mayor of Norwalk,
Connecticut. A photo of Bill Collins is available
CLICK HERE
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