(The) C0MM0N PE0PLES S0URCE for News

August 27, 2008

The Facts

Since the televised appearance at the Saddleback church with Pastor Rich Warren, there has been a lot of discussion about the two Presidential candidates’ definition of “rich” relative to who should be responsible for paying the most taxes. Barack Obama used the figure of $250,000 while John McCain tried to avoid giving a number. He attempted to discuss what tax credits, etc should be given, eventually mentioning $5 million as a possible number, but then tried to make light of that number. Since then both camps have tried to make hay with what each one of them said. (You can go here for a transcript of the question & answer session.)

My View

Of course, the first reaction by someone to the question of what defines “rich” would typically be “everything’s relative”. This is somewhat true, but not necessarily true in this case.

CNBC had a discussion this morning they called “Redefining Wealth“. Rea Hederman of the Heritage Foundation and Andrew Jakabovics with the Center for American Progress were the guest. The relativity issue naturally came up in the discussion; primarily pointing to where one might live as defining who might be wealthy and who might not be, based on their income. Living in or near a major metropolitan area was quoted as grounds for $250,000 a year not “being rich”, whereas some place like Nebraska it would be. Of course, it was also pointed out that less than 2% of all households in America earn $250,000 or more.

Look, nobody is saying you can live on the same thing in New Your City that you can in “small town Nebraska”. That’s just a fact of life. But here’s where relativity comes in; each person sets their own lifestyle, usually based on their income (accepting some try to raise their standard with credit). And it doesn’t matter if you earn $250,000 or $40,000; you set your lifestyle on that amount. Heck I got two friends who earn more than $1 million a year and neither one of them think they could live on less. So try this on; suppose those who say they can’t live on $40,000 a year is told to go live in a doublewide trailer, just like the $40K a year guy does; drive the same care (or truck) the $40K a year guy does; eat the same food the $40K a year guy does; wear the same cloths the $40K a year guy does; etc., etc., etc (you get the picture). Now I bet living in that major metropolitan area is not nearly as expensive as it was before.

Here’s my point; the guy making $40K a year is spending $40K a year just to get by, and a collage education for his children is out of the question. If he’s asked to give more to the government, he and his family is basically reduced to “living in the back seat of his car”, if he’s lucky enough to have a car. Otherwise, he’s asking family members if he & his family can move in.

As for a person or a corporation, I don’t think anyone should be asked to pay a higher tax rate than the next guy (and no free goodies from us regular taxpayers). All I ask for is a level playing field and no free rides. The problem with the tax structure is those with plenty of money have the means to find ways not to pay their fair share of taxes, and the $40K a year guy doesn’t. So lets throw out the 67,000 plus page tax code and regulations (2007) and go to a simple tax system, which wouldn’t take more than 1-2 pages; each person (or family) making over $20K a year (or whatever defines poverty) pays a flat tax (if you like, consumption tax) and corporations, businesses, etc. are charged a reasonable flat tax just for the privilege of operating a business in a country that provides for those businesses (roads, bridges, law enforcement, etc.) and protection by the strongest military force in the world (why should the latter get a free ride). No more special interest, no more loop holes, etc. By the way; that 35% tax rate businesses are complaining about? They actually only pay about 17.5%, with hundreds of corporations not paying any taxes at all, what with all the tax laws and loop holes written just for them. What percentage do you pay?