‘Big Hype’ of Tax Reform
The way tax reform is going, some people might be tempted to think that the Big Hype has replaced the Big Lie as the most efficient way to bamboozle the taxpayers out of their wealth.
For reasons that apparently remain a mystery to the press and politicians, the ingrates don’t seem to be appropriately thankful for the benefits bestowed on them by their public-spirited congressmen who have struggled long and valiantly to reform the oppressive tax code.
The biggest benefit, of course, is simplification, by which the tax brackets are reduced from more than a dozen to only two or three. This will save the beleaguered taxpayer at least 20 seconds in looking up his or her category in a tax table, possibly an advantage in the computer age when a person can spend a month’s salary during the blip of a computer chip.
Another benefit is that people earning $30,000 a year have the privilege of paying the same tax rate as the biggies earning a couple of million. While the percentage amount after paying the grub bill is greater, the feeling of pride in having at least one thing in common with the truly affluent has a spiritual value that transcends worldly monetary considerations.
A tax break more easily translatable in dollars is the privilege of deducting interest payments on a second home, regardless of whether it’s a cabin, with an outhouse, in the woods, or a private estate with an airstrip and a waterfront dock. Think of it! Even the little guy earning no more than $10,000 or $20,000 will be able to continue to find a tax haven for his savings, just like the rich guy on the hill.
Big operators in real estate and common stocks are finally going to get their comeuppance by having their long-term capital gains spigot turned off.
The sweetest bite in the poisoned candy game is that revenue lost to the government through lower personal income taxes will be made up by increasing the take from those greedy creatures of capitalism, the corporations. So what if a few of them go broke?
Those having managers with any sense will raise prices or reduce wages, or both. To be sure, there’ll be less incentive for investment in equipment for expansion and modernization, thus increasing competition from low-priced imports. But that’s not all bad. It will help consumers and perhaps revive the dream of a free enterprise system, whatever that was. Besides, it might tend to counter the swelling tide of protectionism, reminiscent of the stringent tariffs of the 1920s that led to the Great Depression.
A neat feature of tax reform is that it’s revenue neutral, meaning that we can continue to run the country on more and more borrowed money. Who cares about a trillion-dollar debt? Printing cheap money can easily pay the interest without putting any strain on the Internal Revenue Service.
KENNETH E. MAXWELL
Huntington Beach
