April 15 is probably not the day to ask people whether they are taxed enough. The annual reckoning with the taxman, whose “inevitable” tag-teaming with the Grim Reaper makes both equally unappealing, hits most Americans.
It ought to be a good day to think about whom you’re casting your ballot for next November when you consider how much you’re being fleeced this April. Unless you think you’re undertaxed…
Believe it or not, there are such people. You can read them in The New York Times.
Sitting in my tax preparer’s office waiting my turn Saturday, I read Princeton University’s Matthew Desmond telling me why “You Don’t Have to Take Every Tax Deduction, and You Shouldn’t.”
If you believe this out-of-touch-in-his-ivory-tower professor, because the U.S. tax code is unfair, it is unethical to “take tax breaks that primarily make the rich richer.” Like your mortgage deduction. Or passing your wealth to your kids without a death tax, the ultimate expression of Ben Franklin’s memorable quote about the parasitical relationship between death and taxes.
Inheriting your family’s money “explains almost 60 percent of wealth inequality nationwide.” Making money from dividends and capital gains deductions “costs the government.” Taking mortgage deductions might even be racist, because “84 percent of the mortgage-interest deduction flows to white households.”
What Desmond doesn’t tell you is his working assumption: that the money you make actually also belongs to the federal government, and your non-deductible dependent, Uncle Sam, should be able to tell you how much he gets. (And he wants more.)
That is the question about which Americans desperately need to get clear. The money that you earn — whose is it?
If you’re out of touch with the latest in leftist and “progressive” thinking, it’s not really yours. Sure, you worked for it, but because society provided a road for you to get to work, an economy to work in, and in some instances a statutorily fixed workday that allows you to drag yourself home to bed, it’s really also the government’s money.
And you “rich” people: You’re just bilking the government by wanting to keep more of it, especially through legal tax means.
Yes, society has some claim on our support. But Desmond and the “progressives” have that relationship inverted. They think of your money as owed to the government, which may decide just how much. I think of your money as…well, your money, for which Uncle Sam’s ever-growing claims require ever more rigorous justifications.
In other words, the state does not have a moral right to set just any tax level.
Last year, the U.S. Supreme Court struck down a Minnesota law that asserted just that. In Tyler v. Hennepin County, a unanimous Supreme Court threw out the Minneapolis area’s property tax rules.
Geraldine Tyler was an older woman whose family moved her from her condo to a senior living facility. In the course of doing that, somebody forgot to pay the property taxes on the condo, which ran up to $2,300. The Hennepin County taxman started tacking on interest and penalties at a rate that, if he weren’t sovereignly immune, would be called extortion or usury. Interest and penalties totaled $13,000. (In other words, Hennepin County wanted 565% of what it was initially owed.)
The story gets better. As is typical for property taxmen, the county seized and sold the condo. It got $40,000. Did it send the $25,000 over what it was “owed” back to Ms. Tyler? No, it kept it, and went all the way to the Supreme Court to fight for that money.
The “special-interests-totally-bought” Supreme Court whacked Hennepin County down, insisting: you can take what you were statutorily owed in arrears and no more.
Why mention this? Because Hennepin County is the logical extension of the Desmond argument: that whatever some jurisdiction writes into the law as its tax code, along with its penalties and interest rates, is its claim to which we should all bow down.
No.
It’s time we recognized: the money you make starts with being your money. The government may have a claim to some of it, but that claim and the size of that claim ethically demand justification.
“Thou shalt not steal” does not include a “sovereign” waiver. From English tradition (Robin Hood) to American constitutional law (“the power to tax is the power to destroy,” McCulloch v. Maryland) to the 250th anniversary of the Boston Tea Party last December, Americans have always recognized that the state’s taxing power is limited and should, generally, be small. The degree to which it grows is the degree to which proportionately it must prove its claim to that greater degree of your earnings.
Because they are your earnings. You put in the hours to bring them home. You want to get ahead. You want your family to live well. You want your kids to have better chances than you did.
Please tell me who (except for some addled “progressives”) doesn’t want to “get rich”!
It’s normal and desirable to want to get ahead, including getting ahead economically. What is truly perverse is that some politicians seem to believe that, once you do, you should be punished for it. You’ve gotten too far ahead. You’ve stood out from the crowd. You’ve ruined “equity.”
So, please, don’t regret taking your mortgage deductions and your local tax deductions. Make capital gains on the stock market rather than the 0.0000000001% interest rate at your local bank. And pass your money to your kids…with neither guilt nor taxes.
As I write this, it’s Saturday night, which means the last folks are lining up at the local 7-11 to buy their Powerball tickets in the hope of cashing in on $46 million. I have yet to see the winner who gets up at the press conference and says, “You know, Uncle Sam, keep it. You need it more than I.”
Maybe more Princeton professors should buy Powerball.
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