Cheney Free Press -

By FRANK WATSON
Contributor 

Our tax system makes no sense, needs an overhaul

Guest Commentary

 


Yippeee! I finished my taxes. I was concerned after the media horror stories of taxpayers who expected considerable refunds only to discover they owed thousands to the IRS. I didn’t know what to expect.

I was happy to discover my small refund was approximately the same as I have received for the last 10 years or so. I guess those horror stories were rare exceptions broadcast for shock effect.

After I electronically submitted my return, I did some quick calculations and was a bit surprised that I paid just under 10 percent of my total income in tax. I then researched past years and found Trump’s tax cut to be real. Historically, I have paid between 12 percent and 15 percent of my total income in taxes.

As much as I hate to pay taxes, I don’t think 10 percent is enough. I actually should pay more tax!

The tax cut was a bad idea. I understand supply-side economics, but I also understand our country is going farther and farther into debt. I remember when President Reagan called a nationally televised news conference when our national debt reached $1 trillion dollars. A trillion $1 bills placed end to end would reach to the moon and back 300 times!

Our current debt is enough to pave the entire surface of the earth with $1 bills, 13 layers deep! It is insanity. Your family’s share of the debt is about the same as your mortgage and you have nothing to show for it.

I have read experts who claim the debt is just a number and has no meaning. They have their heads in the sand. There are too many examples of countries who have allowed their debt to get out of control to the point of national bankruptcy. We could easily experience the same fate. The interest on the debt is one of our largest federal budget items. Your share as an American citizen is over $9,000 per year.

There was a brief brouhaha a few months ago when the Federal Reserve announced they were considering raising the prime interest rate. If the prime interest rate goes up, the interest on our national debt goes up right along with it. A 1 percent hike in the prime would cost us more than the President’s border wall. We simply can’t leave this mess for our grandchildren.

It has been suggested we could simply default on our debt and start over. China might not like it, but that would be their problem. That would not be the only problem, however. The largest creditor of our national debt is the Social Security Trust Fund. If we default on our debt, the Trust Fund disappears, and all those who depend on their Social Security checks will be out of luck. I don’t think we are ready to accept that. We must make debt reduction our highest national priority.

Serious debt reduction must include both a reduction in spending and a tax increase. Both are essential, and equally unpopular. It will be hard to sell the concept that the government is not a bottomless money pit.

Politicians have used your tax dollars to buy votes long enough to be considered business as usual. It can’t go on. A tax increase will be hard to accept, even though we have the lowest taxes compared to gross domestic product as any other industrialized nation. To succeed, we must have national leaders who value our country’s future more than they value their own. The only way debt reduction is even remotely doable is in conjunction with a revamp of the entire tax system.

As I review my tax forms, I find too many provisions that make no economic sense. Why does the IRS reward me for being married? A joint return pays less tax than two individual returns.

I am also rewarded for adding to the global overpopulation problem. Those who can afford to buy a home can deduct their mortgage interest and real estate taxes, while those who cannot afford a home are penalized. My wife and I routinely contribute to church and charities. We are aware of the tax implications but would still contribute if they were not deductible. We need to view taxes simply as the source of funds needed to operate the country and quit trying to reshape society with the tax code.

We need to make debt reduction our number one national priority and revise our tax code so fat cat corporations and the ultra-rich pay the same rate as us working stiffs. A good politician should be able to sell that.

Frank Watson is retired Air Force colonel and long-time resident of Eastern Washington. He has been a free-lance columnist for over 19 years.

 

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