Posted on 05/05/2003 9:25:04 AM PDT by chambley1
Taxpayers wanted, dead or alive
Ivy Main
With the nation's anti-tax fervor at a high pitch, the time is ripe to consider tax relief for freelance newspaper columnists.
Our nation has a long tradition of writers offering their opinions cheaply to anyone who will print them, but these people are under enormous financial pressure as newspapers cut their pay rates.
Without tax relief, the American dream of becoming an obnoxious pundit will be out of reach of all but large corporate opinion writers.
Are you persuaded? If you are, I have a lot of other tax breaks I'd like to try on you. They would all have the excellent result of benefiting people who want them very much (like me), plus each of them would mean more money in the hands of the recipients (me again), who would probably spend the cash (you bet!), thereby infusing money into the economy and creating jobs.
There's only one drawback to my plan, which is that you have to pay for it. Either you must pay more in taxes yourselves, or the government will run a deficit that you will have to deal with sooner or later.
This can't be a very important drawback, though, because far bigger tax breaks are being offered to people with lots more money, with the full support of people who call themselves fiscal conservatives.
Consider the estate tax, which collects money from only the wealthiest two percent of people. And these aren't even live people. The bill arrives only after they've passed to that tax haven in the sky, where money doesn't buy much.
Yet so popular is the proposal to repeal the estate tax that many politicians have enshrined it in their platforms along with family values, apple pie, and gun rights.
Tax breaks for dead people might seem like a strange kind of populist cause, given that the estate tax only applies to dead people worth more than $2 million. Ordinary people, even those who cherish a dream of someday amassing that kind of money, might be expected to save their passion for causes a little more immediate and closer to home.
And indeed, those stumping for estate tax repeal don't mention the corporate executives, real estate developers, syndicated radio talk show hosts and other campaign supporters who will get most of the tax savings.
They dwell instead on small business owners and family farmers, whose heirs pay only a tiny fraction of the estate taxes, and who are given years to pay at below-market loan rates.
Sympathy for these people runs deep in America. The term ``family farm" triggers emotions that verge on the religious.
But even as applied to this sacred group, the argument for repealing the estate tax is a little peculiar. It says that if the heirs of the farmer or business owner have to pay a tax on the portion of the property worth more than $2 million, they might have to sell out and pocket all the money.
Without their capital fully protected, apparently these heirs can't compete against someone starting a business or a farm from scratch, with no capital at all, using money borrowed at market rates.
Those whose devotion to family farms is especially fervent, however, don't see it as a matter of protecting people who inherit property from competition by those who seek to earn it with talent and hard work.
They believe they are defending a tradition of keeping farms within families. It does not occur to them that there could be any way of doing this that didn't also eliminate taxes on the 99 percent of wealthy heirs who aren't getting farms.
You can bet that's occurred to the politicians, though, and that they prefer not to mention the option. But press them on it, and they'll still stick up for the rich, arguing that the estate tax is a form of double taxation. This is largely untrue. For the most part, the property in large estates has not been taxed already, but even if it were true, what of it?
Today, middle-income (live) taxpayers pay a capital gains tax of 20 percent, double the 10 percent a lower-income earner pays on the same gain, but that hasn't caused a revolution.
Though maybe it will, now that I've mentioned it.
The painful truth is that someone has to fund the government. If you give me the tax break I'd like (and you really should), then the lost revenue must be borrowed or made up by taxing someone else.
And personally, I know of only one category of people who can afford to pay taxes and don't find it painful at all.
Dead ones.
To anyone with any degree of real economic sense, they are sound reasons. The Democrats, however, rely upon most people having a static view of economics.
According to the this view (shared by much of the populace) reducing the excise tax on an item will reduce revenues by the amount of the per-item reduction times the number of items sold. If the number of items sold increases following the tax reduction, the amount of 'lost' revenue will be the amount of the per-item reduction times the new number of items sold.
By what reasoning do you consider income taxes direct taxes? The courts have ruled (I mean before the 16th amendment) that they're indirect taxes, except when they're taxes on property income.
Of course, the federal government is also unfortunately involved in things like welfare, but I try not to think about that too much :o(
Don't you mean chumps, Ms. Main..?
Hello Ivy,
Just read your column. Next time you decide to write about taxes or any other economic issue you might take some time to read the works of Adam Smith, F.A. Hayek, Ludwig von Mises, or Milton & Rose Friedman. Respected and award winning economists all of them (Hayek is a Nobel Laureate). All would say you havn't a clue what you're talking about. Economics is not a zero-sum game and lower taxation results in the counter-intuitive result of higher revenues to government (theories proved repeatedly throughout history and in this country in particular). If you are not receiving enough money for your columns, it may have something to do with the quality of their content--or the lack thereof.
Have a nice day.
He forgot the part about an increased economy bringing in an increase of tax revinue to pay off the deficit. That's how Clinton did it. He took the extremely successful Reagan economy and it's increased revinue and added it to a Clinton tax increase and was rolling in dough - just to turn around and pass it out to his leeching supporters. (In the end, though, he threw us into a recession that could have been avoided had he left out the tax increase part. We'd have all been rich if Clinton hadn't have srewed it up)
Hello Ivy,
Just read your column. Next time you decide to write about taxes or any other economic issue you might take some time to read the works of Adam Smith, F.A. Hayek, Ludwig von Mises, or Milton & Rose Friedman. Respected and award winning economists all of them (Hayek is a Nobel Laureate). All would say you havn't a clue what you're talking about. Economics is not a zero-sum game and lower taxation results in the counter-intuitive result of higher revenues to government (theories proved repeatedly throughout history and in this country in particular). If you are not receiving enough money for your columns, it may have something to do with the quality of their content--or the lack thereof.
Have a nice day.
Her reply:
I appreciate your sharing your opinions, Mr. Ingham, though we are obviously in disagreement. I learned enough in law school tax classes to know that if you were right, we'd have the highest revenues with no taxes at all. Tax policy is a balancing act, to be sure, but rather than having been "proved" to work, free-lunch fantasies haven't yet been shown capable of paying the bills--or you can bet there wouldn't be this debate.
(And if the theory is weak, sarcasm won't improve it, though I'll put that down to the hour. Once.)
Thand you for taking the time to write.
And my reply back:
Dear Ivy,
Your reply reinforces your lack of understanding. The theories and their practice do not say that no taxes would produce the most revenue (nice try on the reduction to absurdity), they state, in brief, that beyond a certain point, the burden of taxes reduces and then discourages economic activity. Once that point is reached (usually between 7 and 10 percent if you wish to use the Laffer curve), taxes begin producing fewer revenue in proportion to their size. This is more than just theory. It has been proved again and again throughout history. A fair analysis of Kennedy's tax cuts, and Reagan's tax cuts prove this. In both of those cases revenues to the treasury were greatly increased (revenues doubled during Reagan's term in office). Unfortunately, the politicians (mostly Democrats) went and spent it at a faster rate than the money was coming in (as politicians are want to do because it allows them to buy votes through programs and other largess), thus resulting in deficits, which Democrats have ridden like a hobby horse to deny the source of that revenue.
As for your law school tax class, I doubt it was taught by Nobel laureate economist (most university econ is taught by folks who still think Marx was right), though I'm sure your instructor would be flattered at your faith in him/her. Before you hang your hat on what little you learned there, you might try reading some of the works of those I mentioned. You might also try doing a little research on the tax cuts in the U.S. in the last century and their effects; there are plenty of very well written books on the subjest--by people who took more than a law school tax class--that you can use to expand your knowledge on the subject. As a writer, I would assume you are interested in truth. Look for it. But, if you are more comfortable with your present level of ignorance on the subject or simply prefer to pander defunct ideas to those who think like you and believe government is a better steward of your money, don't. It's always hard to look a fact in the face and admit that what we used to believe so fervently is wrong. But that is how people grow as human beings. Give it a shot. You have nothing to lose but your misconceptions.
Best Regards.
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