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Tuesday, July 26, 2016
Taxation without Comprehension -- Part 1Posted Monday, July 7, 2008, at 8:08 AM
In one of his movies actor Morgan Freeman's character says, "I don't have to do anything but stay black and die." He forgot to mention taxes. Evidently he did not subscribe to The Brazil Times and was unaware of the on-going manipulations of tax laws going forth in Indy. As Benjamin Franklin put it, "… in this world nothing can be said to be certain, except death and taxes." Of course, while it is still appointed unto man to die, you actually don't have to pay taxes. They say Leavenworth Kansas is lovely in the spring.
As I understand history, taxes began as simply the stronger taking from the weaker. Thus a weaker merchant traveling across some stronger person's territory would be subject to having all his goods taken. The problem which soon developed was that if you take all a person has with which to earn his living, that person will not return later due to having been put out of business. Once the goods of the merchant were consumed there would be nothing left to the stronger to live on, making him weaker. Thus began the system which we call "taxation." The idea of taxes being to extort just enough to leave the poor saps an incentive to make more money and come back next year. From the earner's perspective if it took less to pay the "toll" than move to another land, the merchant would simply pay the extortion and go about his business.
Somewhere lost in history this extortion developed into government sanctioned taxation. Naturally, with government intervention came exact formulas for determining how much could be extorted to maintain the stronger while keeping the weaker coming back. However, this formula was deliberately kept decipherable only by bureaucrats and tax preparers (who had developed their own systems for taking from the weak). The merchant's goal, of course, became to so deceive the tax collector as to pay the least possible tax. The more one has to spend on tax experts (the theory goes) the less one actually paid in tax. Thus began taxation by the stronger without comprehension by the weaker.
Let me see if I've got this modern taxation thing right. The government prints the money. They do this very well and frown on anyone else doing it. We have to use their currency which they issue to us, even though its value consists solely in how well we trust the issuer. Then, every time money passes from one hand to the next for "value received", the government wants back some of the money which they themselves printed. For example, if the kid who cuts your grass earns more than $400 in any calendar year, the government wants back part of the money it printed. If they don't get it, the kid goes to Leavenworth. Have we got this correct so far?
In America we perpetuate the ancient traditions of prestidigitation by electing representatives to travel to Washington and Indianapolis. There they can go to great lengths to insure tax regulations are re-complicated on a regular basis. This guarantees none of the weaker (that is, poorer) among us will ever really understand why some specific amount is to be extorted (paid). Henry Bloch, founder of H & R Block, once said something to the effect that H& R would be out of business in five years if Congress stopped changing the tax laws.
So, I read the articles in The Brazil Times about the "new and improved" changes in how property taxes are to be computed, and about the "new and improved" things we can do to hide our fortunes from the tax collector. I end up hiring some tax expert to hide as much of my treasure as possible from the tax man, look the other way, and sign the check.
In 10,000 years of human history nobody has come up with a better system. I for one am open to suggestions.
David L. Lewis is an observer of and sometimes commentator on life who may be reached via e-mail at firstname.lastname@example.org.
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