Guest Opinion: What's 4 million words and doesn't cover our spending? The Tax Code
There are a few simple truths about taxes that when understood will make more obvious the shell game that politicians play whenever the subject comes up.
The federal U.S. Tax Code is just under four million words. Yes, that is twice the length of the Bible and all of Shakespeare’s works put together. And much of this is a social document. The code is the accumulation over the years of efforts to direct "we the people" into doing things that our elected representatives feel to be important for the nation as a whole. For example, we recently had a tax credit (not a deduction but a full credit that comes right off the top) for those buying electric vehicles. Our government felt it important to encourage the purchase of electric vehicles. So, individuals who can only afford a used clunker or are driving a 10-year-old car, help others who can afford to buy $60,000-$100,000 electric transportation. And this begs the question that if an electric vehicle is such an obvious good thing, why do we have to subsidize its purchase?
Another example is the deduction for children. The government feels that having children is a good thing as it insures the growth of our economy. So the people who choose not to have children (oftentimes because they cannot afford to) are helping those who do choose of their own free will to have children. Anyhow, the tax code is the accumulation of hundreds (thousands?) of decisions like these two. And these gifts apply to businesses as well as individuals.
Now we get to a current political topic: corporations paying their “fair share” (have you noticed it's never defined?). In fact, some pay no taxes at all. And this, we are told, is due to “loopholes.” Now the loopholes are laws and regulations established in the tax code. They are not illegal. In fact, since they are in the tax code, our legislators thought at one time that they were a good idea. Some corporations have low taxes because they invest in Research and Development, have a depreciation deduction for new modern equipment, provide donations to charitable groups and other such positive actions. If we wish, as a nation, to no longer subsidize some of these activities, that’s fine. Just pass the legislation to do so. But if we did so, a convenient target of complaint would be taken away. And then where would certain politicians be? They would have little to say.
Remember also that taxes to a corporation are just another cost of doing business just like labor, raw materials and such. If their taxes go up the funds are not going to come out of some secret mattress stuffed with money that is secretly kept in a warehouse someplace in a Kansas cornfield. No, it will eventually be paid by, yes, you the consumer.
And the worst part of all this is that our taxes still don’t pay for all that we are spending. Right now, we are deeper in debt relative to the total annual value of all the output of all our citizens than we have ever been. Yes, even greater than World War II. And that debt continues to grow and, as many countries have learned the hard way, it cannot continue indefinitely. When the day of reckoning arrives, it is very unpleasant for every citizen.
Dick Sakulich is a resident of Doylestown and a member of The Intelligencer/Courier Times Editorial Board.
This article originally appeared on Bucks County Courier Times: Guest Opinion: Tax code — 4 million words that don't cover our spending
