Posted April 10, 2022
From Taxman by The Beatles“. . . Yeah, I’m the taxman and you’re working for no one but me.”
I remember when I first started looking for a part-time job as a teen in the seventies. Up to that point, I worked odd jobs like mowing yards and delivering ad circulars that paid me in cash. I remember hearing that a local department store was hiring for minimum wage - $2.35 per hour if I recall correctly. In today’s dollar, that equates to $10.54 in today’s dollars.
The current minimum wage is $7.25. Interesting.
Anywho, I remember telling my parents how much I would make at that rate. It was then that my parents told me the facts of life. Not the birds and the bees. The facts about taxes. Talk about a sobering dose of reality.
I’m told that the first taxes were levied by the Egyptians back around 3,000 B.C. – give or take 500 years. Taxes have been used as a tool by the ruling class ever since. Taxes throughout history were often “temporarily imposed, “yet, here they are, as sure as death and, well, you know, taxes.
Taxes factor into the Christmas story.
Our nation’s revolutionary birth was fomented due, in part, to “taxation without representation.” A certain tea party was thrown in Boston harbor because of a tea tax. Taxes just never seem to have been popular no matter who must pay them.
We get mad at the rich for paying seemingly less than what some deem as their fair share. I see where that angst is well justified in some cases. However, let’s be honest here. We would do the same thing if we could. Most of us take advantage of every legitimate deduction (I call them “purchase influencers”) we can. Home interest, property taxes, kids, medical expenses. You name it, we’ll write it off because we can.
If you’re in the rich category like a lot of our favorite rock stars are, then you spend more money to save more money. You have business-related deductions. Heck, some rock stars have even formed holding companies in Holland or elsewhere so that their expenses and pass-through income (dividends, etc.) receive exceptional tax treatment. And you know what? I don’t blame them a bit because each of us would – or should – take advantage of every tax advantage we can. It’s not greed. It’s not illegal. It’s just good business.
Back in the sixties, the Beatles and the Stones (along with many of their rockin’ peers in the U.K.) became tax exiles. They were taxed a whopping 95% of their income just because they made more. Since those days, the Crown has lowered the tax rate quite a bit.
Before some of you get the wrong opinion of me, I want to make it clear that I’m not leaning into an anti-tax argument. We need a great and strong government and that requires money and lots of it. We need to defend our borders and our citizenry. We need to enforce constitutional laws. We need to assist the truly needy to get back on their feet so that they can be productive, self-sufficient citizens. All of that requires money and the money can only usually wind up in the government’s treasury via taxes or fees (that feel just like taxes without the nasty aftertaste).
So, yes, taxes are necessary.
But people should be able to keep more of what they earn. I identify myself as politically in the middle. I think a country as wealthy as ours can and should help the downtrodden but incentivize them to not want to stay there. I believe that everyone can earn and live very well in this country. Need and necessity fuel our imaginations about ways (usually legally) to accomplish those goals. Once we reach that level, we should be able to keep much of it and do with it as we wish. If we’ve raised and educated ourselves and our families correctly, we will instinctively look for ways to help others to do the same or, in the case of the truly helpless, give our hands of plenty to help the empty hands of need.
It seems that individuals often do a better job of helping others than a cold governmental agency can and does. This is not a political observation but an economic one. We’ve heard “follow the science” a lot lately and I dare say that economics is a science. However, I think that we can trade the word “science” with “reality” and not lose any integrity of meaning. Both involve unfiltered observation.
Back to my point.
Many of the wealthy – especially the uber-wealthy (of various political leanings, I’ll also add) – set up charitable organizations to help others. Sure, there are tax advantages to doing so. That’s just smart business. But they help others in a much more cost-effective and efficient manner and usually to better outcomes. I’ve often wondered what would’ve happened if they gave that money to the government, instead.
I know. I know. We often read that some of those charitable organizations don’t do what they were set up to do. That’s where justifiable law enforcement comes in. But I do believe that we as individuals can do better in helping our fellow humans than any government can.
The wealthy's charitable foundations have fostered improving the well-being and education of many via their largesse. They’ve provided health care and funded research and development of healthcare improvements for all. It appears that most of these are legitimate and beneficial and warrant the praise and preferential tax treatment bestowed upon them.
As a citizen – a middle-income citizen – I desire to see a less onerous tax burden on everyone – rich, poor, and those of us in the middle. I desire to see our amazing government go on a tax diet and do better at handling the people’s money that it does collect. Let us as individuals learn to be good neighbors again by having the financial freedom to involve ourselves in our communities instead of killing ourselves to live. The result will be better homes which build better communities which build better towns and cities which build better states which makes this incredible country of ours even stronger.
There are a lot of brilliant people on both sides of the political aisle who have floated great ideas in the area of tax reform. It really shouldn’t be complicated. A flat tax and a lean consumption tax would provide governments from the local to the national level with lots of money to do their jobs. Perhaps there are other great ideas in making taxes less onerous while maintaining proper governments.
In closing, for the past 74 years, the Tax Foundation has announced when Tax Freedom Day is. That is when, on paper, we as Americans have paid all the taxes expected to run the government (local through federal). In 1900, it has been calculated to have been around January 22nd (at a rate of 5.9%). In 1950, we figuratively got to start keeping what we earned on March 31st (at an aggregate rate of 24.6%). This year, it is April 18th and while no rate has yet been given by the Tax Foundation, in 2019 it was quoted at an aggregate rate of 29%. For those of you who are wondering when the highest aggregate rate took place, it was in both 2016 and 2017 at 30.9%.
As Americans, we can do more if we can keep more. And we can do it better.
This isn’t a Democrat or Republican desire. This is the American dream that was meant to be achieved and lived . . . and why millions from around the world desire to call America home.
Note: Boomerocity has interviewed two men shown in the embedded video. They are Chuck Leavell (the latest of three interviews is here) and Nathan East (here). Both talk about their work with George Harrison.