Taxing the Rich, Paying the Poor – Just this CPA’s opinion (probably not what you would expect)

Flag of the United States of America

Flag of the United States of America (Photo credit: Wikipedia)

America is based on our freedom to express ourselves and our opinions (at least for now… hehehe). The following is nothing more than MY opinion. I’m sure there are MANY that will agree, disagree, and fall somewhere in between. I love a good healthy debate (without personal attacks, please) so if you would like to add your own comments, I promise to post them wholeheartedly as long as there is not cursing, racism, or personal attacks. (Sorry.. my blog, my freedom of choice – but I promise to be completely unbiased on any comments otherwise) – Girl Scouts Honor.In my opinion, TAXING THE RICH is like penalizing the people in our country for making something of themselves – while rewarding many (not all) that do not. I believe our country was founded upon the ability to make choices and if we choose to work hard, we have the opportunity to become as successful as we want. In our country, there are no limits (or there isn’t supposed to be) on what we can do. Instead however, we are moving more and more toward a society that rewards those that do not work hard, that do not have the motivations of our forefathers, and often (not always) take advantage of the already excessive social programs we now have in place. First, let’s discuss taxes, then just a quick point on the other social programs I am mentioning here.

Taxing the RICH more and the POOR less is a very popular topic right now (and actually has been since our complicated tax laws and social programs really took off after the Great Depression). For simplicity, let’s compare someone making $300k (most would consider this in the ‘RICH’ category) versus someone making 20k (some would consider this in the ‘POOR’ category) per year.  Now suppose instead of this complicated tax law that we currently have, that each paid 10% of their gross income (not net income, no more loopholes, etc.) in TAXES. This is NOT taxing the ‘RICH’ MORE, correct? Even so, the ‘RICH’ person would pay $30,000 in taxes compared to $3,000 from the ‘POOR’ person. See? The ‘RICH’ would already be (and in our current system already IS paying) MORE TAXES.

Taxes

Taxes (Photo credit: Tax Credits)

In my opinion, our system is already unfair in increasing tax rates based upon your income. WHY should someone who works hard and is successful pay 30% compared to 5% or 0%. Don’t we all live in the same society with basically the same opportunities? Every single person in this country could start their own business or any child can go to college if it were their choice. I was very poor growing up (although my mother never let me realize that because of her love and rearing of me)… and I simply got student loans and went to college and have started numerous businesses. More importantly, I was given nothing by my parents (other than love and encouragement) and certainly nothing by our government to do this. It was my choice. Others have the same choice – why should either be penalized or rewarded because of their choices in a country that is supposed to be about freedom of choice?

On the other side (to be fair), I will say that the ‘RICH’ perhaps have the money to pay CPAs (or Tax Gurus) to find loopholes for tax avoidance where the ‘POOR’ do not have that luxury. This is a valid point and unfair truth based on our current tax system that I admit wholeheartedly. We all know that Big Corporations, Banks, Politician, etc., do exactly this and often pay NO tax whatsoever.  The only fair solution to me is to completely re-vamp our tax system altogether.

I would absolutely LOVE to see a FLAT TAX based on gross income (not net income, not after various loopholes, mind you) for everyone. GASP!!!  I say this and I am a CPA myself? Yes… because I would much rather spend my time on helping my clients grow their business, plan their future, train them on accounting, and reach their goals (i.e., counseling) than  I would working our complicated tax laws to ensure they take this deductions, get that credit, use this exemption, etc.  I know my clients would love it as well. Who likes dealing with taxes anyway, especially with our 5000 pages of tax law that comprise our current system!

The other point people often make is that the ‘RICH’ still only pay 2% of all taxes in our country while the ‘POOR’ pay the remaining 98%.  Okay… but that is misleading! If instead you look at it based on the individual instead of the group, almost every individual in the ‘RICH’ category already pays WAY more than any individual in the ‘POOR’ category – and this includes our gradual step-up of tax rates relative to income rising. The whole statement  is misleading because those in the ‘RICH’ group only make up a small percentage of our society – so of course OVERALL they pay less (as a group) than all the rest of our country’s population.

The problem with all of this lies in our POLITICAL system, of course. All of the special interest groups have their hands out influencing our politicians. In order for the politician to gain support and money for their campaigns to be elected (or re-elected) they have no choice but to pick certain groups, follow the crowd, and do what is in that group’s best interest, rather than the PEOPLE. It’s called bribery and it is thought of as simply normal in our society. I think our forefathers would shoot us all if they saw what we’ve done to our country in this area.

On a personal note – I am not a staunch follower of any particular political party for those very reasons. There are valid issues and points that I believe strongly in on both sides.  Ultimately I suppose I would be considered a Libertarian or Independent because my VERY strongest belief overall is that the government should STAY OUT of our personal lives and making laws that should be individual choices. Period. Period. Period. We are not a socialist, communist, or dictator-lead country. We are supposed to a country that enables its people to make their own choices, follow their own free will, and enjoy the land of opportunity.  I believe strongly the main purpose of government is to do the following and THIS is what our taxes should be spent upon before ANY solitary other thing:

1)      Protect OUR PEOPLE here in this country – protection for us in our streets domestically and certainly internationally, but only when it is clearly warranted. I understand humanitarian efforts are needed in other countries, but until we get our own country in order we simply need to help all those here first. It’s sad, but it is necessary. There are people starving in our own country – and yet we spend $5 million on grass boats in some other country? Really? This is a Republican view, until I stated that I disagree in going abroad. A Libertarian view is one that believes we need to take care of ourselves. Selfish? Perhaps. But we should be helping one another HERE in our country, not just ourselves as a person. If we do that, then perhaps we can use our extra resources to help others abroad. Until then, we need help here now… RIGHT NOW.

2)      Take care of our Children, our Elderly and our Disabled. This is more of a Democratic viewpoint, but it is absolutely critical and even a Libertarian would agree that each community (or State) should take care of its own people (rather than having the Federal government do this. The way to the means does NOT matter to me honestly  – but spending $3 million dollars to save the whales when our children, elderly, and disabled are homeless, starving, or worse in incomprehensible to me.

3)      Provide Healthcare to All American Citizens.  If there is one thing I strongly believe on the democratic side of viewpoints it is this. It is an absolute abomination that our Citizens (not illegal aliens – I’m not going to even touch that topic in this post) do not have healthcare. I’m not talking about affordable healthcare – I’m talking about pure healthcare for every single person in our country – regardless of their status, income, ethnicity, etc. I do not agree with private insurance at all. The wealthiest can afford the best care while the poorest receive nothing. I know… this is the opposite of my view on the tax system – but my reasons here are moral and ethical. Having good health is NOT a choice and an opportunity that everyone in our country currently has (which is different than becoming successful in our country and being penalized or rewarded for it by the tax rate you pay). This issue hits directly to my heart in these days as my mother is currently not cared for by any health program. She worked all her life, but was laid off several years ago. Shortly thereafter she was diagnosed with kidney cancer and needed surgery – but had not insurance or governmental assistance. The ONLY thing she had from her entire life of working was a small (very, very small) IRA left to live on, and her home that she had worked to finally pay off. In order to receive Medicaid, the government will insist on putting liens on that home. In order to have payment arrangements with the hospital (which we felt fortunate to have found one that would even do this), every bit of that small IRA will need to be exhausted. The question is… Where will she live and how will she eat once they take this from her?  The infuriating part (other than this being caused by the Camp Lejeune Marine Base Water Contamination – which I have posted on before) is that had she actually done NOTHING responsible such as saving to own her home and putting a little money away for her retirement… HAD SHE DONE THAT INSTEAD, she would have Carte Blanche and all the state and federal help she needs to for her healthcare. But because she worked and was responsible, she receives NOTHING. Really?!?! Darn, had she only taken advantage of the system, spent all her money, never saved a dime, she could get on welfare, Medicaid, and have her local state grant programs. Hmmm… what are we teaching our citizens here, folks?

4)      Education for our Children – If our tax dollars are spent on anything, our children’s education needs to be included. Again this is a democratic viewpoint I suppose, but they are our future and without providing them this, our country’s entire future could be at risk. There is no excuse for a country like ours to not educate our children beyond the low state standards that our set. This goes hand in hand with paying our teachers a fair salary (as well as holding them accountable for their performance) and teaching our children about the opportunities for higher education, college loans, and the opportunities available to them – regardless of where they come from and to teach them that saying the ‘cycle of poverty, bad education, and crime’ is no longer true – it truly is a choice in this day and age.

In my opinion, other than the main issues mentioned above, I think just about every other social program should disappear, except under extreme circumstances that are reviewed and approved on a case by case basis.

  • Welfare is the most widely abused social program I know of.  If it didn’t exist people WOULD get jobs, even if it meant finding jobs where childcare is provided or childcare swapping groups would be formed.  Again there are extreme cases, but they should be reviewed case-by-case and approved only when absolutely necessary for a limited time while the person is being taught how to get back on track.
  • Unemployment is also abused. Although certainly needed by so many today, it is ABUSED by 80% of its recipients and the people who pay for this program are those that pay taxes (i.e., those that are working). How can someone be on unemployment for 18 months (now reduced to six months recently) and still own luxurious assets and go on vacation? Is anyone really verifying they are trying to find work? Again, this is another social program that is overly abused and should be monitored much more extensively and provided under certain circumstances and guidelines to be awarded.

Overall, I believe, the Federal government should pretty much STAY OUT of our personal lives. Why do so many groups out there insist on trying to pass laws that are personal and of moral and ethical basis? In my opinion, the government should NOT be able to tell me that guns are illegal, that marijuana is illegal (although I personally wouldn’t smoke it if you paid me to), and that religion is not allowed in schools, that abortion is legal or illegal. These are all personal choices and every time the government tells us or passes a law involving moral and ethical issues, we take one step closer to being a Socialistic society and one step away from living in the Land of the Free.

Thanks to Leslie for inspiring this topic this morning. Although her views on this are different from mine, I love that even more – because in our country, we do have freedom of speech (at least for now).

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6 thoughts on “Taxing the Rich, Paying the Poor – Just this CPA’s opinion (probably not what you would expect)

  1. Chico says:

    Easy to feel that way when you’re a CPA with a good income. You’d be singing a different tune if you were on the other end of the continuum. Just saying.
    ~Imacpa2

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