Thursday, April 22, 2010

What Do People Who Support ‘More Government’ Do With Their Tax Refunds Each Year?

We asked this hard-hitting question recently because of Tax Day, April 15 and not surprisingly, got a lot of feedback, response and, yes, ‘emotion’.

“Of course, I deposited my tax refund from the government!” said a strong supporter of President Obama and his expansive plans for government health care and who looked and sounded like Yosemite Sam come to think of it. When asked why he didn’t just countersign his refund check back to the US Treasury to help pay for all the new services to the previously uninsured, he became somewhat defensive and said: “Because it is mine! I paid my ‘fair share’ to the government to support all the good things we want and need like good schools and roads and helping poor people".

Yeah, but, we were just talking about paying for this massive expansion of health care, not all the ‘other stuff’. Somebody's got to pay 'more' for it, don't they?

Operative phrase to keep in mind: ‘Fair Share’. It carries a lot of weight in American debate and discourse.

We are of the opinion that if you are strongly for the expansion of government services, you should also be willing to pay more in taxes for it. Somehow, Americans have always been tricked, coerced and flim-flammed into thinking all we gotta do is just ‘raise taxes on the rich!’ and ‘everything will be hunky-dory’!

It won’t; there are not enough of them. And believe us, they are smart enough to hire the best financial planners, lawyers and tax accountants money can buy to minimize the amount they have to pay each year to Uncle Sam.

Former Congressman Alex McMillan used to argue this point so adroitly on various budget and economics committees in Congress by saying to his colleagues and their staff: “There are 535 of us elected officials writing laws and 300 million American citizens out there trying to figure out how to get around them. According to the law of averages, who do you think is going to win most of the time?”

We think it is no accident that a billionaire such as Warren Buffett almost plainly boasts of paying himself ‘only’ $100,000 per year in salary. Why not? He only gets taxed in income and payroll taxes up to that point and then all of the other wealth he is generating gets bounced around and stirred up by his expert tax advisors to where we would be very surprised if Mr. Buffett paid any taxes personally over and above what he pays on that $100k annual salary.

How do you think such people get to be billionaires in the first place, by being stupid?

And despite all that, 42% of all income taxes are now paid by the top 1% of American taxpayers anyway. So that should pretty much end the charade that class warfare activists like to claim that rich people are not paying their ‘fair share'.

We have one question:  Who gets to determine what our 'fair share’ of taxes, or income for that matter, should be anyways?  Legendary Senate Finance Chairman Russell Long of Louisiana used to talk about who got to make the decisions this way: "Don't tax you; don't tax that fellow behind the tree!"

We had one prominent liberal activist tell us point-blank to our face that the top tax rate should be 90% of all income AND assets of every rich person each year. Really?  C'mon!  Then we really would slay the goose that lays the golden eggs.  We did not have the heart to ask to see her tax returns when she got into her new black Mercedes-Benz and drove away.

We also think the American public has been hoodwinked somehow into believing that when they do get a tax refund back from Washington, somehow it looks like a ‘gift’ to them. Why is that?

Because of the methodical withholding of every single penny of income and payroll taxes for the vast majority of American workers from their weekly paychecks. They never see that money in the first place! It goes right from their place of employment to Washington to pay for trillions of dollars of spending and never runs through their own personal checking account. If you somehow overpaid your federal tax during the previous year, the good folks in Washington will send the balance back to you,  without interest of course.

What would happen if every person had to write out a check for at least $2500 on April 15 each year to cover the payroll taxes they owed for the previous year? That would make every living breathing American taxpayer as mad as the 'real' Yosemite Sam.

And then you would see some real decisions made on spending priorities, taxes and balancing the budget.

courtesy of

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