Father George Explains It All--Well, Most of It

Curtain rises on a bare stage except for a podium, blackboard and a large American flag in the background. Father George is standing at the podium. He speaks:

All right class, let’s pay attention.

You’re gathered here today for “Father George Explains It All to You.” Our subject is the income tax and why it caused so many problems in the recent battle of the budget.

Now, let’s have a little background first. We all know that in order to build bombers that don’t fly and subsidize the tobacco industry--which left-wing doctors claim causes cancer--and send guns and ammunition to the generals who run El Salvador so they can kill their own people, we have to raise money. And the best way to do that is to tax our citizens, especially since these activities are clearly in the best interests of all of us.

All right, then comes the question of how to tax our citizens.

That wasn’t such a big problem early on in this country since we didn’t spend very much--except, of course, for an occasional war. But shortly after the turn of this century, things started to get pretty tight, and we knew we needed a new source of funding to run the government. So in 1913, we passed the 16th amendment to the Constitution which authorized a tax on income.

Now this was known as a progressive tax, since the theory was that we would tax people according to their ability to pay--the higher the income, the higher the tax rate. This is different from a regressive tax, like a sales tax or a tax on gasoline, where the poor pay at the same rate as the rich.

Some of the rich folks didn’t like this idea of a progressive income tax, but taxes were low enough back in those days that it didn’t matter much. Besides they always had plenty of money to hire high-priced lawyers to look for tax loopholes.

The problems started when the Democrats really began to sock it to the rich people after World War II and dried up a lot of the investment capital that these rich people would otherwise have poured into building up our country when competition was growing from abroad. So naturally, when the Republicans got back into power, one of the first things we did was to ease this tax burden on our wealthy citizens.

In 1985, we cut the top income tax rate from 50% to 35%, and then three years later, to 28%. Congress went along with this, even though much of the time it was run by Democrats who had been around the block a few times.

But this year, we got a bunch of fuzzy thinkers who wanted to attack our deficit by soaking the rich. Naturally I wouldn’t allow that, and that’s why it took so long to get this budget through. I had to compromise a little, but not much. We were still able to preserve this hard-earned tax advantage for our highest income citizens.

Now, I’ll be glad to entertain some questions from the class.

Q: With all due respect, sir, when you reduced the tax rate for our wealthiest citizens, you didn’t reduce it proportionately for the rest of us. That left the people in the next lower tax bracket paying a higher rate than those in the top bracket. So my question is this: why is our tax rate progressive until it gets to the top bracket, and then it becomes regressive?

Father George: So that we don’t soak the rich. (Writes on blackboard.) Let’s all repeat this, class: “Don’t soak the rich.”

Q: Yes, but isn’t requiring people with lower incomes to pay higher rates soaking the not-so-rich?

Father George: I prefer to look at it as allowing this lower income group an opportunity to help the rich accumulate wealth so they can pour it back into our system.

Q: Yes, but what if they don’t pour. . . .

Father George: (interrupting) I think that’s enough on that point. Shall we move along?

Q: My wife and I both have to work to make ends meet, and between us we bring in $80,000. This is just enough to pay our three mortgages and child care and to keep our kids in karate class. Under this new law, we’re still paying a higher tax rate than Donald Bren or William Lyon or those other folks who keep making the Fortune 500 list. Is this fair?

Father George: (getting testy) I think I’ve answered this question several times. Such innuendoes are part of an ugly campaign of class warfare, and I’ll entertain no more questions on this subject. Unless we can change direction, we’ll end today’s class.

Q: OK, how about this: according to the last reported IRS figures, there was a gap of $94 billion in 1987 between what was owed the government in income taxes and what was collected. This figure has more than tripled over the last 15 years. Couldn’t we put a big hole in the deficit by collecting this $94 billion?

Father George: It takes a lot of manpower to track down these people and collect this money, and in order to cut costs, we’ve had to drastically reduce the number of IRS employees. The bottom line is that we’re saving thousands of dollars by reducing the IRS payroll, and if that restricts a few of our activities, it’s the price we pay for efficiency.

Q: Couldn’t you simplify the collection job by just going after the big dogs--like, for starters, the 472 people who reported a total income of $211 million and didn’t pay any income tax at all?

Father George: I’m sure that those people invested that money wisely so this country could grow--and, after all, that’s what we’re all about, isn’t it?

Q: Well, maybe you could at least look into the two people in that group who also collected unemployment compensation?

Father George: If that’s true, they won’t get away with it. I’ll put Danny Quayle on it tomorrow.

Q: According to the House Ways and Means Committee, the average income of the poorest 20% of Americans fell 11% in real terms in the last 15 years while the average family income of the richest 20% rose 24%. At the same time, a congressional Joint Economic Committee found that the income gap between the richest and poorest Americans is now the largest ever recorded. Does this worry you?

Father George: It tells me that individual enterprise is being rewarded in this country. That’s why we have twice as many billionaires as any other country in the world.

Q: Yes, but should I have to pay a higher tax rate than they do?

Father George: (angrily) I warned you. There will be no more questions. Now then, let’s stand and repeat together: “Don’t soak the rich, don’t soak the rich. . . .”

(Curtain goes down as Father George leads this benediction with his blackboard pointer.)