latest tax thoughts
Now that elections again become our national focus, various tax proposals have surfaced, some with merit, others that are impractical or the type that would stymie innovation and the economy. The first question often asked is " what is a fair method of taxation ? " Depending on what philosophy of government one selects, several answers are obvious. One group of people would want no taxes for anyone earning little or no income, with progressive taxation as one works harder and/or earns more. The other group might prefer equal taxation for all regardless of income. As I outlined in a previous commentary, perhaps there is a way to modify both of these approaches that could be favorable to all. It is a proven fact of human nature that if one contirbutes nothing to anything that improves one's daily life, that lack of ownership means those facets of daily life have no value and therefore, one could care less if they are preserved for future citizens to share in the benefits. If one doesn't help to build a bridge, they are less likely to care if someone defaces it. If one doesn't pay for litter pickup along a highway, one is less likely to care if others litter. This list is endless regarding things provided by the general tax revenues and all the more reason that EVERYONE should contribute something if for no other reason than a feeling of pride of ownership in one's country.
A more important consideration about fairness might relate to the multi-millionaires that inherit vast fortunes simply by the luck of being born into the right family. This is the larger question that needs more consideration. An easy argument could be made for a 'billionaire' tax as some have proposed, as one questions just how much money does one need to lead a 'comfortable' life ? Having said that, we all need to remember that the large mansions built by Hollywood celebrities, politicians and sports stars employ huge numbers of middle class people to provide the materials, design, the actual construction, maintenance, groomers for the horses, fertilizer for the gardens etc. etc. Perhaps a better way to consider the vast fortunes of an Oprah Winfrey, a Tiger Woods, a Bill Gates, or a Michael Jordan would be to ask how the fortune is being used. In the cases of those four individuals, they support charities and do much good with their wealth so perhaps a 'billionaires tax' for them should be less relative to the amount they invest in charities. What about the ' Hamptons' or 'Martha's Vineyard' crowd, the same crowd that is the breeding place for so many political dynasties like the Kennedys or Bushes ? If large inheritances are not re-invested into something that produces jobs, perhaps those 'trust baby' families should be the target of a 'I'm lucky' tax ! The same goes for the simple man that wins the multi-million dollar lottery. If the proceeds are not invested in something that produces jobs in short order, maybe a 50% or more tax would be in order for any winnings over $ 1 million. Idle funds in a huge trust serve no purpose other than enriching stock brokers, account managers, lawyers and of course the owner of the trust. These are the areas that need review. Will it happen ? Its not likely since the birthing grounds of so many entrenched politicians are those very same trust funds.