Taxes Suck
It's that time again folks, time to debate taxes! Yes, again. Ugh, thanks Trump.
It seems that with every new president comes another tax debate flair up. Once the fire is tamped out, a few years later it roars back to life. Always with the same sides, same lies, same misconceptions, same facts, and many of the same people. Are you as tired of it as I am? I figured for once I should put in my take on taxes and then just leave it be.
Taxes suck. You can't tell me when you look at your gross income compared to your net income you are not dismayed by the difference. Since I don't make much money, mine is about 30% for federal, state, social security, and medicare combined. That means that about 12 hours out of my 40 hour work week was for the government. Your taxes may be different, but you can do the math yourself and see how many hours a week you work for the government. It just may surprise you. So, yeah, taxes suck.
Here is a cold hard fact. Taxes are necessary because the government needs money to do anything. Fire departments, law enforcement, disaster recovery, infrastructure, parks, public schools, financial safety nets, and even the military would not be possible without taxes. Libertarians can be pissy all they want, but it doesn't change the fact that without taxes we would all be fucked.
One part of the recurring tax debate is who should pay what. I think it's a fair thing to debate about. However, it's also one of the main points where the most lies and misconceptions are interjected. Here I'm going to cover some of facts and leave out all the bullshit that gets tossed around. The Economic Policy Institute has done lots research on productivity vs pay. You can read their works yourself, but it boils down to workers have been getting fucked worse and worse since the early 70's. Our productivity has skyrocketed while our level of pay has stayed about the same. This fact would not be included in a tax discussion except we have also been cutting taxes for businesses since the 1950's. Politifact covers this as one of their fact checks on Bernie. Check it out yourself, it's a good read. Trading Economics has a interactive chart of unemployment rates that can go back to 1950. While there is a lot of variation from year to year, there is a clear trend toward higher unemployment rates from about 1950 to 2016. All three of these facts put together show that companies are hiring less people, to do more work, for about the same level of income compared to the1950's. Which means they are making more money, spending less, and paying less taxes. Leaving them with more money to pay their CEO's. Which the Huffington Post covered in one of their articles. Therefore, a majority of the money made since 1950 has moved from the hardworking middle class to the richest people in the world. All while the middle class has been working harder and getting more done. Just to put this into perspective, the middle class tax rate has increased dramatically since 1960 as shown in an NBC News article. These facts put together show why the percentage of middle class people compared to rich and poor has been shrinking since the 1970's as shown by the Pew Research Center.
Armed with all these facts and a understanding of how the middle class has been affected offers a way to correct the problem. Since companies having more money and a smaller customer base has not meant more jobs, as we have been told it would. I say raise the taxes on companies and lower them on the middle class. This would then allow the middle class to have more spending money. In turn this leads to companies having more incoming revenue from an increased customer base. Increased customer base means the company will need to hire more people to handle this influx of business. Which is a much more sustainable way to grow compared to the shrinking customer base that has been going on since the 1950's. Which of course is the exact reason small businesses have been struggling for so long. Lack of customers. Anyone that disagrees with more customers leads to more revenue and growth has no idea what they are talking about.
Another part of the tax debate is how should our tax dollars be spent. While this part of the debate has mainly been subjective based on individual biases and views. I thought it would be interesting to take a fact based approach for once. Let's break this down a bit. According to the CBO the 2016 budget breakdown was something like this.
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| From: quickmeme.com I'll be the first to admit George was not exactly accurate here, but it's funny so I give him a pass. |
Taxes suck. You can't tell me when you look at your gross income compared to your net income you are not dismayed by the difference. Since I don't make much money, mine is about 30% for federal, state, social security, and medicare combined. That means that about 12 hours out of my 40 hour work week was for the government. Your taxes may be different, but you can do the math yourself and see how many hours a week you work for the government. It just may surprise you. So, yeah, taxes suck.
Here is a cold hard fact. Taxes are necessary because the government needs money to do anything. Fire departments, law enforcement, disaster recovery, infrastructure, parks, public schools, financial safety nets, and even the military would not be possible without taxes. Libertarians can be pissy all they want, but it doesn't change the fact that without taxes we would all be fucked.
One part of the recurring tax debate is who should pay what. I think it's a fair thing to debate about. However, it's also one of the main points where the most lies and misconceptions are interjected. Here I'm going to cover some of facts and leave out all the bullshit that gets tossed around. The Economic Policy Institute has done lots research on productivity vs pay. You can read their works yourself, but it boils down to workers have been getting fucked worse and worse since the early 70's. Our productivity has skyrocketed while our level of pay has stayed about the same. This fact would not be included in a tax discussion except we have also been cutting taxes for businesses since the 1950's. Politifact covers this as one of their fact checks on Bernie. Check it out yourself, it's a good read. Trading Economics has a interactive chart of unemployment rates that can go back to 1950. While there is a lot of variation from year to year, there is a clear trend toward higher unemployment rates from about 1950 to 2016. All three of these facts put together show that companies are hiring less people, to do more work, for about the same level of income compared to the1950's. Which means they are making more money, spending less, and paying less taxes. Leaving them with more money to pay their CEO's. Which the Huffington Post covered in one of their articles. Therefore, a majority of the money made since 1950 has moved from the hardworking middle class to the richest people in the world. All while the middle class has been working harder and getting more done. Just to put this into perspective, the middle class tax rate has increased dramatically since 1960 as shown in an NBC News article. These facts put together show why the percentage of middle class people compared to rich and poor has been shrinking since the 1970's as shown by the Pew Research Center.
Armed with all these facts and a understanding of how the middle class has been affected offers a way to correct the problem. Since companies having more money and a smaller customer base has not meant more jobs, as we have been told it would. I say raise the taxes on companies and lower them on the middle class. This would then allow the middle class to have more spending money. In turn this leads to companies having more incoming revenue from an increased customer base. Increased customer base means the company will need to hire more people to handle this influx of business. Which is a much more sustainable way to grow compared to the shrinking customer base that has been going on since the 1950's. Which of course is the exact reason small businesses have been struggling for so long. Lack of customers. Anyone that disagrees with more customers leads to more revenue and growth has no idea what they are talking about.
Another part of the tax debate is how should our tax dollars be spent. While this part of the debate has mainly been subjective based on individual biases and views. I thought it would be interesting to take a fact based approach for once. Let's break this down a bit. According to the CBO the 2016 budget breakdown was something like this.
Total: 3.9 Trillion
- Military Total: 6.4% 1.1 Trillion
- Defense: 3.2% = 584 Billion
- Nondefense: 3.2% = 600 Billion
- Social Security: 4.9% = 910 Billion
- Medicare: 3.2% = 588 Billion
- Other: 3.1% = 563 Billion
- Medicaid: 2.0% = 368 Billion
When I'm looking at a budget to see where some savings could be, I always look at the most expensive items first. This way you can save the most right from the get go. In this case it's the military. According to the Stockholm International Peace Research Institute (SIPRI) the 2016 US military spending is almost triple to China which was the second largest spender. And our military spending was about a third of military spending for the entire world. Even if your views and opinions lean towards a strong military, you have to admit. That could easily come down with no ill effects. We could cut that a third and still be double of what China spends, and still be the largest military spender in the world. I have enough respect for our military to know they would still be the world's best at two thirds the spending.
The next largest is Social Security. This covers disability and retirement funds paid. I find it hard to find anything to cut here. For one, the average benefit payment for disabilities in 2008 (newest I could find) according to the Disability Benefits Center was $1,063 per month and the average retirement benefits in 2016 was only $1,341 per month according to Investopedia. I don't know about you, but I could not survive on that. Maybe take the one third from the military cut and put it here. Raise the benefits amount to something people can live on. I mean, isn't that the point of the program to begin with?
The next largest is Medicare and Medicaid. This program takes care of medical expenses for retirement age people and low income families. According to their own website in 2015 the total cost of U.S. health care spending was $3.2 trillion. While their total payout was $646.2 billion. This makes up only about 5% of the total healthcare spending for the US. Instead of cutting something here maybe we could find a way to make health care cheaper. I mean, if you take grandma's healthcare, she'll beat you with a cast iron frying pan right upside your head...maybe that's just my grandma.
As you can see, there are some places that facts point to where we can make cuts without losing anything. Others, not so much. Where to spend the money is definitely up for debate for most things. This part, I think, is a tax debate still worth having. As for where the money comes from, that's already determined by facts. There is no debate to be had.
Sure, I'm just some asshole named Rug sitting behind a keyboard. Why would you take my word for anything? You shouldn't. I gave you the links to the facts, it's up to you to accept them or not. See if you can refute my claims. Until then, that's what I think.
Sure, I'm just some asshole named Rug sitting behind a keyboard. Why would you take my word for anything? You shouldn't. I gave you the links to the facts, it's up to you to accept them or not. See if you can refute my claims. Until then, that's what I think.
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