Taxation without Representation

 

 

 

 

"Taxation without representation is tyranny"

 

James Otis

1765

 

 

I thought it would be interesting to take a trip to "make believe" land. In that trip, I am still working. Not only working, but owning a very successful business. I employ people, make a good product, and invest the profits of the company wisely. Like Warren Buffet, my tax rate is modest - about 14 to 16 percent. It is that low because I have taken advantage of favorable tax deductions as well as the capital gains rates. In short, I have done what many other successful Americans have done for years - work hard, make some money, and pay my fair share of taxes.

 

However, the November election is now over, and many are advocating that I pay a more "fair share" on my taxes. Never mind I pay 35% on profits made from normal operations - no, they want more. How much more? Here are some ideas being floated:

 

• Raising the rate for those families making over $250k to 39.5%
• Rather than have the top rate reached when the income exceeds $250k, have 39.5% start from dollar one
• Eliminate or drastically reduce the capital gains tax rates
• Eliminate or drastically reduce all personal deductions

The question which begs to be asked is this - if it is true that 47% of all Americans pay no federal income tax at all, and if the exit polls were correct that over 80% of those people voted to re-elect the president, who is looking out for people like me? An even better question is this - when did making money become evil? When did the wealthy become pariahs? However the most important question - due of the way people vote by stratas of income, is this another example of taxation without representation?

We need to remember we fought a war, formed a country due to taxation without representation. It led to our first party - the Boston Tea Party. Taxes were never intended to be used as a weapon - as a divider. However, over the years, that is exactly what has happened. Our tax code has become a political grab bag of favors and paybacks. Somehow in this world of upside down, people that are paying the bulk of the nation's taxes are looked upon as greedy by those who pay nothing.

Now that I have come back from the land of "make believe", and once again live in reality, I will say this: I am retired, I am not wealthy, I should have no dog in this fight. However, I am a student of our history and understand the cornerstones on which this country was founded. I dare say our founders would not believe our current financial mess. I also would say the solution they might suggest is for everyone, not just one or two percent, to contribute to the solution. They would remind us the most important function of the Federal Government is to raise a militia, a military, to protect the states. That and that alone should be sacrosanct the last thing to come under the budget knife.

It will be interesting to see how our republic, now living in the "new normal", will solve our tax and debt issue. Unlike yesteryear, when our country fought a war over taxes, many today understand making money is not a requirement. The rich don't have to be rich - they succeed because they choose to. If we make it too hard, too painful for the successful, they might choose not to be. That is the only representation they truly have.