I’ve always half-heartedly joked that when I make my first million, I’m going to stow it away on the Cayman Islands. The joke of course being that I’m a journalism major and won’t be making my first million anytime soon.
And besides, I shouldn’t be joking like that, it’s un-American. Haven’t you heard? April 15 is the new July 4. Tax day is just two days away, and according to Vice-President Joe Biden, now is the “time to be patriotic.”
If you’re like the average college student and have perfected the art of procrastination, you may well be scrambling to fill out that 1040 and get it mailed in on time. Many of us, however, tend to do this chore early so we can get that refund that much faster. I’m always bemused at how excited everyone, including me, gets at the sight of an IRS check in the mail — almost as if it isn’t just a refund of your own money, but actually a gift bestowed to you from your ever-caring government (How nice of Uncle Sam to send me some cash for beer, just when I was getting a little broke!).
Yet viewing a tax refund as a lovingly-conferred gift, rather than a refund of your own earnings, is a hazardous line of thought. Under this view, the fruits of your labor are only yours by the grace of government, not the other way around.
The new administration’s budget identifies $634 billion in tax increases and spending cuts to help pay for President Obama’s proposed government health care and other social programs. In a speech to Congress at the beginning of March, Obama said that his budget team has “already identified $2 trillion in savings” to help tame record budget deficits — yet about half of those “savings” are actually tax increases.
Since your income is White House slang for “savings,” it shouldn’t come as any surprise when our taxes start going through the roof in the next several years. How else do you expect to pay for these trillions of dollars in bailouts, stimulus packages and war expenditures? The Treasury’s printing presses can only roll so fast. And here in California — the American tax capital until a few weeks ago when New York stepped in to claim the honors — we’ve got a crippling budget deficit to deal with too.
Naturally, the government will look towards its main source of income to fund its ever-increasing appetite: you. Or rather, your income. In doing so, it hopes that you’ll forget that government mismanagement helped land us in this mess in the first place.
My fellow college students seem largely unconcerned about taxes. Maybe that’s because most have yet to earn enough money to notice when a fraction of it gets taken a way, or maybe a few more simply swipe Daddy’s credit card in blissful ignorance of how the real world works. But for those of us who pay our own rent, food, gas and utilities, every dollar in taxes is sorely missed.
It’s even more disconcerting to realize that, thanks to our progressive taxation system, the chunk taken out of my paycheck — or if I’m lucky enough to start my own business one day, my profits — will only increase as I become more successful.
And this, of course, is where two vastly different moral philosophies come into play.
Taxes have long been a point of contention between the presiding political ideologies of the day. Traditionally, liberals, in favor of big government welfare and expenditure programs, have favored the higher tax rates that allow them to fund these extravagances. Conservatives were supposed to be ones that believed in small government and low taxes — although that can hardly be said to hold true anymore either.
In this new “era of responsibility,” it’s more fashionable than ever to tax more, and the rich the most. Doing whatever it takes to benefit “the greater good” is back in vogue; taxes aren’t even seen as a necessary evil anymore, but as a patriotic duty.
In an interview with Kate Snow on “Good Morning America,” Biden leans forward and says “You got it, Kate. It’s time to be patriotic, time to jump in, time to be part of the
deal, time to help America get out of the rut.”
We have to spread the wealth — and pain — around.
I suppose it would be one thing if we were all “equally patriotic” in our tax-paying duties. But we’re not. Consider that the bottom 50 percent of taxpayers contribute only 3 percent of the nation’s federal income tax revenue, while the top 1 percent pays almost 40 percent. Under our progressive taxation system, the average American currently gives away 13 percent of his income in taxes, while the richest 1 percent gives away 23 percent. By the time you add state income taxes into the mix, the average person will work for 109 days this year just to pay their 2009 taxes.
Yet these statistics, shocking as they are, only begin to scratch the surface. Taxation is not only a huge burden on the backs of average working Americans, but it has a contractionary effect on business and the microeconomy as a whole that even the staunchest big-government Keynesians can’t deny. When you not only take a larger net amount of someone’s income based on how much they make, but a larger percentage, taxation acts as a disincentive for economic growth. Just what we need in a recession.
If you’re graduating in the next few years, consider how little of your future income you’re willing to live on. Sixty percent? Fifty percent?
You’re entitled to the money you earn, and the government has no business taking it to spend as it sees fit. Increasing taxes are the last thing an already down economy and workforce needs.
Oh wait, I forgot, it’s that time of the year. Let’s be patriotic. Go on, put your right hand on your heart, and with the other, hand over those earnings.
Marlize van Romburgh is a journalism senior with an economics minor and the Mustang Daily editor in chief. “Business as Usual” is the new business column, appearing in the Daily every Monday.