Tuesday, October 25, 2011

Paying Taxes is Good for America


Paying taxes is one of the great things about being an American.

Okay, I know you're looking at me funny right now, but hang in there for a couple minutes.

Back in 1770-something, a bunch of British citizens living in Boston threw a whole bunch of tea into Boston Harbor. That was a big deal for two reasons; first, Brits love their tea, second, it was a bunch of colonialists creating the world's largest cup of tea. This is particularly irritating to the British because tea was one of the primary reasons they started collecting colonies in the first place. At this point in time, the business of colonizing countries such as India, growing tea, and selling it to the British people was a huge chunk of their economy.

To toss it into perspective, in 1990 Iraq invaded Kuwait. While not a colony, Kuwait was flush with American money from the oil business. The threat of a group of people interrupting Americans' passion for driving sport utility vehicles caused us to amass the largest invasion in world history, and launching a ground war that lasted four whole days!

In the 1770s, this was a big freaking deal.

So why did we do it?

Taxation

Taxation was at the heart of the Boston tea party. Tea had a luxury tax attached. Everyone who purchased tea, which was, well, everyone, paid a little bit of money to the British government.

We weren't upset about taxes. What the Americans, as they would later be known, were upset about was "taxation without representation".

You see the colonies didn't have any voice in Parliament, the lawmaking body of the British government. We weren't necessarily upset about paying taxes, we were upset because we had no choice. We had no input into the decision.

Taxes are a very powerful tool. Taxes influence businesses to do one thing, versus another. Taxes influence us to buy homes, have children, get married and go to college. Taxes influence entrepreneurs when starting their own business. Taxes influence corporations when spending money on growth, distributing profits to owners, and helping the environment.

Taxes are very critical part of our economy, and part of the reason why the economy has grown to be the largest in the world.

The money from taxes has funded education, provided for building of infrastructure, and secured our independence.

Okay, countries all over the world have taxes. Why are American taxes better than most of the others?

Representation

Representation is what makes the American tax system incredibly powerful.

Tax laws are designed in the legislative branch of the federal government. The Senate's 102 members are distributed evenly among the 50 states and the District of Columbia. Each state, no matter how large or how small, has an equal vote.

The House of Representatives has 435 voting members, and these members are distributed roughly proportional to the population of the United States. California, our most populous state, currently has 53 members. Not only does this insure representation by population, but each member of Congress represents a specific district. This means that every individual in America has one member of Congress specifically charged with looking out for them.

No matter where you live in the United States, you have exactly 3 representatives that help determine the tax laws. You have exactly the same number of representatives as every other citizen. Your voice, and your vote determine the manner in which that representative does his or her job. If you are unhappy with any of those three representatives, you have within your power, to campaign for a new representative, or even to run for office yourself.

Taxation Is Power

The only power any representative has is the ability to increase or decrease taxes. They have no other authority to change the behavior of their constituents.

Would you like a greener planet? Tax breaks can encourage businesses to change manufacturing to create less pollution.

Want better educated workers? Tax breaks can encourage families to save for college, even years before their child is old enough to attend.

Want a better economy? Tax savings encourage companies to hire. They encourage people to buy homes. They encourage people to buy greener appliances and give them "cash for clunkers" which all stimulate the economy.

Want more financial security? Taxes encourage us to save for retirement, but encourage us to spend the excess while we are still alive.

Taxation Is Freedom

Government can only influence its citizens in two ways, taxation or force. Want us to recycle? Create a taxation incentive or hold a gun to our heads. Either way, more people will recycle.

I recognize this sample seems extreme, but look at the countries that don't have representation built into their tax structure. North Korea, the former Soviet Union, Cuba, Libya, Iran, Iraq, Saudi Arabia and others were or are able to control their people only through the use of force or threat.

Taxation without representation by definition is a dictatorship.

Is Taxation Broken?

Of course it is. Taxation in the United States is a constantly evolving concept. Today we have income taxes at the federal, state, and local level. We have property taxes, sales taxes, estate taxes and excise taxes. We have luxury and use taxes. We have occupancy taxes and even tourist taxes.

It's impossible that such a complex system isn't broken, at least in some areas.

The key is, taxes are put in place by our representatives in this democracy. In the United States, people have the power to change and to influence others by communicating with our representatives, and replacing them when necessary.

If you hate paying taxes, if you think your taxes are unfair, or if you think you're simply not getting your money's worth, then you have the responsibility to participate in the system. Communicate your happiness or unhappiness with your representatives. Encourage them to make changes, or encourage them to find a new job.

-- -- (As always, I encourage your comments. Because of spam, comments are moderated, but all legit comments will be accepted. You're allowed to disagree; you're allowed to tell me I'm an idiot, but please tell me why you think I'm an idiot.)
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