Two-thirds of Americans do not have any taxable income. The most recent IRS data shows that Americans earning over $100,000 per year pay roughly 80% of all taxes in America. This means that roughly seven percent of our nation pays the overwhelming majority of everyone else's government expenses.
I'm a big fan of the idea of a nationwide flat tax. But here's the problem: We already have a flat tax and an income tax. Almost every item we buy has a federal tax somehow levied on it.
When you pay your cell phone bill you pay a universal access fee which goes for programs such as the Obama-phone which are wrought with fraud. Your cable bill, home telephone bill, automobile, gas, utilities, alcohol and many other products and services have federal and state taxes baked in the cost or on the bill.
Most Republicans and Democrats loathe the discussion of abolishing the IRS because of its likely impact on many of their pet projects and donors. They also realize that each of them are complicit in scamming you. Many argue the federal income tax, compared to historic levels, is low. But, when the top income tax bracket was as high as 90 percent, we didn't have the ‘scam’ taxes (re: flat consumption tax) outlined above.
With numbers as staggering as the foregoing, there's no wonder why our country is becoming lazy, complacent and apathetic. When I read this data, my first thought was “why am I working so hard to give half of it to the government and provide many others with a free ride?”
Let's face it! I still have a real estate license so I can sell three or four homes per year, flip a house or two and live off my rental income for effective tax rate of twenty percent or so. That, I can tolerate. But, why should I work hard, take time away from my family and remain in a constant state of stress only to have the long arm of the federal government strip away half or more of what I earn to fund entitlements, fraud and waste?
We all pay Medicare and Social Security, but there's even a conversation about limiting that to some sort of a means test so the system doesn’t go bankrupt. So, again, we get to pay into a system but never receive benefits commensurate to our input, because we are above average in success?
We are clearly in a nation that penalizes success at almost every level and encourages failure at every other level. This sort of inequity is the main catalyst causing greed and fear top penetrate and drive our culture. If someone breaks into your house to rob you, your immediate reaction is fear followed by anger. Greed is typically justified by anger. What this federal government is doing to successful people is breaking into their homes and robbing them - except it’s fully legal.
In my original point, I stated that the government has already instituted a flat tax on everyone in almost everything we buy and every service we receive. If the income tax was abolished in favor of a flat tax, we would have to also come to terms with the fact that our government is being funded significantly by these hidden fees. In other words, at our current rate of spending our new-found revenue would be unsustainable unless the flat tax was so high it became unattractive. If we truly realized just how much we pay the government each year, it would create a revolt.
Republicans and Democrats in Washington fail to understand that when business leaders and owners are burdened with most of the costs they are no longer interested in sharing prosperity; they become interested only in preserving it. This is precisely why the richest one-percent continue to get more wealthy while the bottom 20% remain stuck in poverty. They adapt, even cheat to neutralize the burden. I’m not justifying it; just explaining it.
Further, this pushes financially successful people into the quandary of either being successful at all costs or succumbing to the pressures to be average. What this means is that it's very difficult to remain successful, philanthropic and Christian all at the same time in a nation that punishes success as a crime.
The result? We are becoming a morally bankrupt country where it's every man for himself and everyone against the government. It's unhealthy, unsustainable and will lead to our ultimate demise.
If we want our children to inherit the incredible country we inherited, it's time to turn off the faucet of free stuff; we must start operating within our means or we will fail. Eliminate the income tax, remove all of the hidden ‘scam-taxes’ charged by the government and institute a flat tax that funds our security, military and basic government operations. There should be no long-term entitlements for anyone who is not mentally or physically disabled. In regards to unemployment insurance, welfare, food stamps and similar programs there should be a lifetime benefit maximum. Once you reach it, it’s over.
Yes, it may increase crime. We may lose a generation or two in the process. This is not about lifting the burden off the successful people. It’s about creating consequences for being below average, instead of a lifetime safety-net for failure.