“You didn’t put in on this, man!” – Smokey (Chris Tucker), Friday
With a keen sense of timing, I just finished my taxes – on the same day that president Obama announced his plan/desire to raise taxes and possibly reduce or eliminate some deductions and exemptions. The whole mess gets me thinking about the nature of tax policy (and spend policy).
As a general rule, I want a flat tax, no exemptions, no deductions.
Progressive taxation is, in my view, highly immoral. It confuses me as to why Christians would support such a policy – we don’t find anything of the kind in the Bible. Rather, Biblical models generally look like flat taxes (e.g., tithing, Egyptian land-use taxes in the time of the famine). Progressive taxation comes straight from the Communist Manifesto (yes, I’ve read it); this is not one of our religious texts.
Exemptions and deductions are attempts by the government to buy votes by handing out favors to supporters; or worse-yet, attempts by government to guide and control the decisions of your life by promising to give you some of your money back if you act right. These are abominable.
Having said that, I’d like to note that these tax preferences (and spend preferences) cannot be reasonably enacted independently. Let me give you a simple example.
I have three kids. For having children, I receive modest tax deductions and credits – not enough to cover the costs of raising kids, but not meaningless by any stretch. Now, I think that these benefits should not be government policy. Did I claim them on my just-finished taxes? you bet. This isn’t just a “if it’s there I’ll take it” decision (which is somewhat defensible). No, these tax benefits are the least the government can do.
For years the government has run spending deficits … and who will pay these deficits? Who will go to work, produce goods and services that can be bartered in exchange for the borrowed money, and settle the debt? The next generation – my kids. Deficit spending is a tax on the next generation – my kids. Worse yet, the government has propped up a ponzi-scheme (Social Security), using current revenues to pay-off promises to the prior generation. My kids are going to have to pay their money out to today’s workers (and the remaining baby boomers). For what?
By what right do these people claim the productive capabilities of my kids? By what right? They’re not raising the kids? They’re not doing the hard work of teaching them right and wrong, right and left, writing and arithmetic. They didn’t put in on this. They have not sowed, and yet they demand to reap.
So, should we eliminate the exemptions and deductions? YES. But only if we also eliminate Social Security, Medicare, and deficit spending. Until we do that, I am funding the federal spending by raising children, I am being taxed far beyond my fair share, and I will continue to use (and demand) exemptions, deductions, and anything else I can get my hands on.
I’d say the same goes for just about all of the tricks and trinkets in the tax code. Mortgage interest deductions and charitable donations? Sure, take them away – if you are going to balance the budget and institute a flat tax at the same time. Half-steps really won’t cut it here though.