Issue 269 Don't tax producers February 11, 2014

 
Producers are our farmers, the miners and other businesses that provide us with raw materials that allow for economic expansion. Here I will explain the idea to not tax them based on former presidential candidate Rick Santorum's idea.

Farmers: Farmers, whether industrial or traditional provide food for not just our country, but all countries around the globe. In America, farmers make up less than two percent of the population and yet still produce excess amounts of food that we export to other countries. Yet, the smaller farmers struggle. These smaller farmers who not just produce food, but materials for clothing, fertilizers and other materials from plant and animals struggle day to day with the market. They never know if another group of them will make so much of one particular crop that the price of there own crops may become worthless. There was even one point that a pound of potatoes was worth one penny. Economics plays a major roll in the price of goods from farmers and routinely puts many farmers into debt with no hope of paying it off. As such, by not taxing them, it reduces the chances of them being forced into the poor house. Yes that is correct, by not taxing these individuals (some of them are already receiving tax breaks already) it will allow them to make profit unhindered on their labor and therefore reduce the risk of them falling into poverty. Let us also not forget that by not taxing the farmers, some crops can be lowered in cost which makes them more accessible to people on a low budget like the poor. So there are advantages for everyone.

Miners: By miners I mean the guys (and sometimes gals) who dig up the raw iron, copper, and gold that comes out of the ground. These men and women provide us with all the raw materials that go into our houses, cars, roads and the like on a daily basis. If these people did not do their job, then who knows where our society would be? However, many of these people struggle. These businesses look to find places to mine once their first set of sources dry up. Not to mention they struggle with regulation after regulation all the while trying to keep their working environment safe and stay in business. Let us give these men and women a break and stop taxing them so that they can have one less thing to worry about.

Other producers: Other producers are our axmen who provide us with lumber to build homes and make things like paper. Mills that turn Iron ore into steel. Manufacturers that make parts for buildings and vehicles per customer demand. Basically, any job that makes a product that is not sold at the retail level provides us with the raw parts and materials needed for our economy to grow and strengthen. By not taxing them, we grow our economy, they struggle less with respect to looking for a contract, and it helps to reduce cost on those things they provide us. Again, we all win.

Conclusion: Overall, by not taxing the producers who find and cultivate the raw materials, and make the parts that are to be included into the final product, we give them an edge. That edge is in competing with foreign competitors, and with them being able to focus more on providing their essential services toward the economy. We gain because this makes goods cheaper, and allows start up businesses within this field to have an easier time gaining money and competing with their already established counterparts. So can we not tax these people who break their backs making what we take for granted?

Issue 268 Don't tax our investments February 10, 2014

Investments are a gamble. We invest in companies to get a return in the form of interest. Companies use the money in the same way they would a loan to grow and thus they create more jobs. The interest we get in return for our gamble allows us to acquire another source of income. Yet the money we put into the market and what we get out of our gamble is taxed. Here I will explain why investments should not be taxed.

First reason: As stated above, investments are a gamble. A successful business will earn people a profit, while an unsuccessful one will cause you to loose your money. However, all investing plays an essential service in all countries economies. It has become a driver of the market such that investments can even get countries out of recessions and depressions. For instance four of Americas recessions where solved partly or completely by reducing taxes on investments. These recessions happened during the Presidencies of Calvin Coolidge, John F. Kennedy, Ronald Reagan and finally Bill Clinton. Could you imagine how fast a recession would end if the taxes that inhibit economic growth were abolished? The economy would boom very quickly and recover in times of trouble even faster.

The second: Investments come in many forms. However I will separate them into two types for this article, those that are double taxed and those that are tax exempt. The tax exempt ones are things like a 401K where you collect at retirement. Here you get money taken out of your check before taxes and then taxed when you cash it out. Usually this stuff is used for retirement and if you have already read Issue 263 Don't tax seniors, you will know that taxing the retirement of any retiree is only going to hurt them. However, the other form of investment (double tax) is taxed first. So your paycheck is taxed and then after you used your already taxed money to buy stock and invest you get taxed again on whatever you cash out. So in this instance you are being taxed twice. The first is on your income and then again on what interest you earned upon getting money off your investment. Double taxation is the only way to describe this theft. By taxing people twice you inhibit their ability to both spend and earn money. It basically makes them squeamish about buying even the essentials. Also, it inhibits people from going after money making opportunities like investments as they feel pressured by the additional taxation.

The third: It frees up the job market. How you might ask? Simply put, it takes people out of the workforce which allows for more job opportunities for everyone else. Basically, those who get rich off stocks do not have to have a job as their "new" job now is investing which allows business growth. Meanwhile, a job they would have occupied based on their skills is now open for someone else to take. Investing also allows some people to retire early and again this frees up jobs as their former employer will need someone to take their place. Social Security was partly invented to get the seniors and people who could retire early out of the job market so that lower skilled labor can take their place while higher skilled labor can move up and earn more income. So we should not care how much an individual makes earning stocks, for the fact is that we should be thanking them for advancing our economy and getting out of the job market to make way for everyone else.

Conclusion: So we have three main reasons to not tax investments. The first, that investing grows the economy and as such taxation of investments hinders economic growth and recovery. Two is that some individuals are taxed twice, once on their income and then again on their investments, which is clearly not fair to the individuals being taxed. And finally the third reason is that it frees up the job market by getting people out of the labor pool which allows other job seekers a chance to work and earn a living (i.e. it can help alleviate poverty in some cases). So I say let us not tax this economic tool that drives our economy. The advantages are clear, so quit taxing investments.

Issue 267 Don't tax the poor February 7, 2014

Yup, the poor are taxed. Well in America, by law it seems that anyone making more than $30,000 a year is considered rich with anyone making less than $20,000 being poor (I have no idea what the in between is, this is the federal governments definition, not mine). What needs to happen is a regressive tax system that allows the poor more economic opportunities. So here is my solution, don't tax them!

The taxed poor: Every year at the federal and the State levels of government the poor are taxed on their income. Further, the State and the local government may also tax them on their property. Usually they get some of this money back in the form of welfare which I find ridiculous. If you are just going to give them the money back (though not always as money and even then it may be less than what they were taxed on) then why take it from them in the first place. Essentially why the heck are you impoverishing them further and limiting their economic options.

My idea: I steal this idea from the progressives (people who believe in one of the many forms of socialism) from the early 1900s. They (including President Woodrow Wilson) only taxed the top income earners in the country when they pushed for the 16th Amendment to the United States Constitution which allowed for direct taxation on individuals. For their purposes, only the top one percent was initially taxed to make things “fairer” (later on everyone was taxed). But for my purposes of removing direct taxation we would not tax anyone making under $30,000. With $30,000 being considered rich, it is an acceptable number at which to designate the threshold of what amount of income is taxed. This allows for regressive taxation at the mid between of the poverty line and below. As such, the poor would be able to earn more money without fear of reprisal of the tax code. Right now, many of the poor fear going over the poverty line because their welfare will be cut off. This decreases any incentive to work. But if they could keep more money in their pocket to the point that they make more money than they would have gotten under welfare, it incentivizes them to get out of poverty. This also reduces the number of people who need welfare as only the most desperate and impoverished will need some form of aid. So the only ones who would get welfare are a select group that absolutely need it most and that is only if they fall into a category where they cannot work do to a physical or psychological condition, or they are so impoverished that they are incapable of feeding themselves (or at least this is the goal with respect to not taxing the poor).

How it works: It is fairly simple. For one, anyone making under the $30,000 mark will not be taxed (adjusted each year for inflation). People will still need to file taxes each year to demonstrate how much they are earning per year however. If they go over the limit, rather than a tax based on the progressive income tax, they will pay a flat rate fee regardless of how much they went over up to the first $40,000. In this case I would have that fee be $2,000 with an entire year given to them to raise that money to pay it (even if it is in installments). This insures that if they for any reason made that extra money, they will not be taxed back down into poverty. To ensure there is an incentive to go even further up the income ladder, if the person makes over $40,000 to $50,000 they will only be taxed $4,000. Thus this eliminates much of the issues with respect to transitioning out of poverty and the welfare cycle and into earning ones own living. After the $50,000 mark however, the regular progressive income tax kicks in once again.

Weaknesses: This idea may still suffer from the issues of dependency. People may still require welfare do to them not wanting to work, and the idea I propose may still have disincentives to get out of poverty. My plan does however give a major tax break to anyone making less than $50,000 a year which is good for a majority of people and helps out the more economically capable of the poor in getting out of poverty. It unfortunately does not completely remove the need for certain people on welfare. While yes there are a good number of people on welfare that if they were not taxed, then they would not need welfare to live comfortably. However, there are still individuals who will lack means of getting out of poverty whether it is due to education, job loss, physical/mental ailments or just stigma from say prison time or other similar factors. Much of that can be handled by special programs that provide unemployment benefits combined with job training and education opportunities. Unfortunately, people will still slip through the cracks and be stuck on welfare such as the most disabled physically and mentally or those who cannot overcome the stigma society places on them. But, my idea is made to help the majority of the people so that they are not forced into the welfare office in the first place. In short, it is so that the only welfare required would be those for the unemployed and those completely unable to take care of themselves.

Conclusion: So this idea is about more than not taxing the poor, but giving them the opportunity to get out of poverty and the stigma it places on them by society. It is designed to be regressive at the lowest income levels so that people have a chance to make and keep more of what they earn. The more they keep, the less likely they will need any form of government assistance. So why don't we quit taking money from the poor just to give them less money back or the equivalent in lower quality support. Let them keep all of what they earn and only help those at the lowest of the low. That is the way to raise people out of poverty and get them off welfare, hopefully for good.

Issue 266 Don't tax schools or clinics Febuary 6, 2014

Some of you are saying what? Schools and clinics? Yes Schools and Clinics (hospitals and doctors offices) is exactly what I am talking about. Specifically, I am referring to privately run schools and clinics where individuals, not government, run and operate these institutions as a business. They are unfortunately taxed in various ways and that should stop.

Schools: Schools like private schools, charter schools and even personal tutors are taxed. Some are taxed based on business income like private and charter schools. They may even be taxed based on the property that the school sits on. Private tutors are taxed based on their personal income in much the same way teachers are taxed on theirs. That is a lot of taxation to go around which drives up the costs of educating children for the next generation. As such, I say stop taxing the schools (both income and property tax) and stop taxing the teachers and the private tutors as well. This frees up money for educating kids or giving the teachers higher pay. If a private school could keep more of the money they earn they may be able to hire another teacher to educate more children. A teacher could get more money so as to get by. Tutors could afford to take on additional students. Charters could struggle less with money and also possibly hire more teachers to educate more children. Just by eliminating the taxes on these institutions and people alone, we can expand educational opportunities or give teachers a well deserved raise.

Clinics: When I say clinics, I use the name loosely. In this case I include hospitals, doctor’s offices, specialists and anything in-between. So did you know that doctors that own their own practice pay business taxes as well? They are in no way exempt from the tax structure and this artificially inflates the cost of health care. As I am sure you would agree, anything that makes health care more costly in a very bad thing. Therefore, stop taxing these hospitals and doctors offices. These people play a major role in maintaining people’s health and that money saved could go instead to expanding the doctor’s office to handle more patients. Hospitals would be able to invest in better and more advanced equipment. Smaller doctor’s offices would be able to have more flexibility in what equipment and resources they use with respect to treating patients. It may even make it feasible for doctors to visit you instead of you going to them. Expanded further, not taxing doctors income also advances these possibilities, especially for doctors that own their own practices. Also, let us not forget, this saved money can also mean cheaper prices for doctor’s visits as well.

Conclusion: Yet another two places where taxes should be abolished. I do not care if some doctors make six figure salaries or that private and charter schools make a profit by educating children. The fact is that these institutions and people do an essential service for the public at large. Think about it, teachers not only educate our kids, but also look after them while we work. Doctors deal with multitudes of the sick and infirm all day long exposing themselves to diseases that could potentially harm them as well (and not to mention grumpy patients). We can afford to not tax these people who deserve our thanks and admiration. So let's do just that by not making it harder for them to give of themselves, by not taxing them further.

Issue 265 Don't tax small business Febuary 5, 2014

In America, small businesses make up approximately 70% of the job creators in the country. Usually a person’s first job is from a small business and from their experience there, it aids them in learning responsibility, integrity and gives them the job skills needed to move up in life. However, small businesses are suppressed in America. What I mean by this is the regulations and the business taxes that prevent the small businesses from expanding into larger businesses which from my perspective are made to secure the position of the larger big businesses by insulating them from competition. As such I want to give the small business an edge by not taxing there income.

How it would work: To define a small business you can do one of two things. You can either define a small business by its income or you can define it by the number of employees. The income type is progressive, but it inherently makes the tax free idea unstable for if a business gains over a certain amount of money it will then be taxed. As such, it hinders growth of businesses. Defining a small business by the number of employees is much easier and simpler. It is a regressive type of tax free system. In this case it allows the business to earn as much money as they want without fear of being forced to pay taxes. As such, for the purposes of not taxing a small business, it will be any business that employs 50 people or less (excluding the owner(s) of that business). There is precedent for this with respect to Obama care that says that if a business has under 50 employees they are exempt from providing health care to their workers, and in Social Security back when it first started that exempted businesses under 30 employees from having to pay the business portion of the Social Security tax. As such, any business under 50 employees will not be taxed.

Expansion: If this is successful, and the small businesses begin to grow with respect to economic growth, then we can redefine a small business to any business that employs 100 people or less. The reason for this later redefinition is because there is one flaw that has to be addressed in this tax free idea for small businesses with that flaw being the lack of hiring new workers. You see, business owners are smart (obviously because they are running a successful business).  A business owner will not want to hire that 51st person if it meant having to pay taxes unless there was a way for that owner to break even with respect to how much they were making prior to hiring the individual and of course not loose the ability to make money. However, limiting it to 50 people is an inhibitor as we have seen under Obama care where businesses have cut back working ours and employees just to avoid the mandates in the law. So the only solution is the expansion to 100 people once the government has adjusted to the lost revenue that they would have gotten if they continued to tax these businesses. So this solves the basic problem.

Defining a worker: The change will make no distinction between full time and part time workers. Reason being is that current market trends have businesses cutting back workers hours so they do not reach the governments standards of a full time worker. Also, some businesses define full time hours as 30 hours or over as opposed to the 40 hours as mandated by government. As such, full time and part time is subjective based on economic trends and government influences. So saying strictly 50 (100 if the expansion idea is acceptable) workers or less makes more sense. Now we have to decide how long a person has to be working at a business to be a worker at a business. For our purposes the employee must have been working for a full six months out of the year to be considered an actual employee. Reason I define it this way is so to make it flexible for business owners to still hire seasonal workers without fear of taxation. Also, a new worker has to go through a sort of probation, so six months encompasses that time period. I do not specify the number of hours worked as this may cause businesses to suppress their workers hours more than what is happening right now in the economy. So a person being an employee can be working an hour a week and be considered an employee. It is almost a form of negative reinforcement that allows business to maximize hours of the individual worker without fear of additional taxation.

Conclusion: I don't want small businesses taxed in order to give these small businesses a chance to grow and expand. It gives small businesses a better chance at becoming a bigger better business via innovation and service. Let us face it, innovation does not come always from the top and thus by letting small businesses earn more they can thus compete. I hope that one day all small businesses will go completely untaxed so as to secure a better future for new business growth, a place for people to access new jobs and of course grow our economy. I will look for any excuse to not tax a person or a business directly through an income tax, and this is one of those situations that give's just the right amount of reason to do just that.

 

Issue 264 Don't tax our kids Febuary 4, 2014

 
Yup, here in America children are taxed. Not just any children, but the children that work part time jobs earning a legitimate pay check. I find it very messed up and want it stopped.

Those who tax kids: The federal government taxes them by taking a portion from their paycheck. Usually though, that money is later given back. But when that money is given back, the State and sometimes local government tax the tax return. On top of that the State and local government tax the child's regular income as well. This of course is done by both States and Localities that have an income tax in the first place. Silly isn't it.

Why we should not tax them: My main reason for not taxing them is because they cannot vote. Children under age 18 cannot vote in any election or referendum. As such they have no say on how their tax dollars are spent and on how much of their money is taken from them in the first place. In short, they have no say in society. Therefore, because they do not have a say, it is taxation without representation.

Let us not forget that some of these kids really want to go to college or they are impoverished and are trying to help out their families. By taking this money (even if temporarily in some cases) it inhibits there ability to not only save money but to help there families when and where they need it. From groceries to bill paying, children who work help out when they can because they love their family and want to protect them. It is not right to take money from the mouth of babes.

Going a step further: If I could, I would make anyone under the age of 25 nontaxable as well. This allows both kids and young adults a solid financial footing and gives them a chance to earn a larger paycheck and pay off college debts all that much faster. Mind you, I am already 25 so if this is ever passed, I would not be able to take advantage of such a benefit, but I want the generations to come to have a better chance at earning more income faster than I did.

Conclusion: I sincerely believe that people under a certain age should be tax exempt based on there ability to represent themselves (all those under 18 if they are working). These kids need all the advantages they can get and making them exempt from income taxes is one of the best advantages I can think of to help insure that they come out more financially secure than there peers who did not get this sort of advantage. Come on America, you know this is the right thing to do, so let’s get to it.

Issue 263 Don't tax our seniors Febuary 3, 2014

Our senior citizens have done much to build us up. They have toiled away for most of there lives trying to make a better life for themselves and their families. Yet we continue to tax them. Should we not give back to them rather than steal from their bank accounts? I think so and here is how I think it should be done.

Federal level: At this level of government seniors are subject to progressive income taxes, taxes for Social Security and Medicare, taxes on their investments and their retirement. I say that we stop taxing all of these things. Starting at age 70, seniors become entirely tax exempt from all forms of direct taxation. While age 70 is a good start (age 75 is the current life expectancy in the United States) it will gradually go down to age 60. This would allow for seniors at age 60 to begin earning larger paychecks before retirement at age 65 when they become eligible for Social Security and Medicare benefits. As such, seniors may not have to work as hard, or as long, allowing them to retire earlier and even hopefully relax.

State and local: Here again seniors are taxed on all forms from income, from investments and even property. They are also subject to sales taxes as well. Here too direct taxation (anything that is not considered a sales tax) should be removed as a burden from them. They already struggle to live on limited incomes upon retirement, and yet the government continues to steal all that money (and in some cases taxing it twice). I have met too many seniors who struggle after retirement and are thus forced to work even into there 80s and 90s (my grandmother works at a children's clinic at age 87) just to get by. It is disgraceful to a society to subject our seniors to possible impoverishment.

Logic: Our seniors have done much to advance this country forward and yet they are taxed. Retirement does not come with an ever lasting money supply that will allow all seniors to live comfortably and to take money from an already limited income, to me, is theft. There are also those seniors who suffer from diseases, and conditions that increase their medical expenses which further limit their disposable income. As such, letting them keep and earn more if they decide they want to continue working is the best solution as they are thus less likely to need to apply for welfare or aid from the government in general.

Also, let us not forget that paying taxes and filling out forms for special exceptions becomes both burdensome and stressful for seniors which can exacerbate any physical ailments. By eliminating taxation on these seniors there becomes no need for many of those special forms save those to apply for a reduced water bill and the like. In short, less complex forms to fill out saves seniors from the burden of having to look for these financial breaks and filling out the forms in the first place.

Reducing there taxes to zero also allows seniors to stay in there homes by making it more affordable to stay in them as they will not have to pay taxes on the property. It allows seniors flexibility on living arrangements and allows them to tap into there investments without fear of the dreaded tax day that many Americans loath. In my opinion it is about giving our seniors the break they need while reducing the number that need help later on in life.

Conclusion: Some may be asking about those rich seniors like Warren Buffet or George Soros. Well, I don't care. This is not about the money a senior has or has yet to earn. It is all about recognizing first and foremost that those senior citizens helped build our country and that they earned a break from the pressures government puts on them in life. You all already know that I hate the income tax and that I wish it would all go away. However, I know that it is nearly impossible to be rid of it as it stands right now. As such, I will look for ways to get rid of it, piece by piece and who better to stop taxing first than the senior citizens who deserve a break life's burdens.