Public Schools that must obey state and federal government edicts teach children that a government “of the people,” managed ” by the people” is “for the people” – all the people, young and old, male and female, black and white. The mission statement of the complicated multi-tiered bureaucracy that governs the behavior of residents in this country – both legal and illegal – is to protect citizens from injustice and to promote a fair treatment of all citizens inside and outside prison.
The euphemistic legal statement of that sacred mission is to provide “equal justice under the law.” Victims of our legal system refer to it as “unequal fairness” protected by inviolable laws. A good description of the law making process in Spanish is “Hecha la ley, hecha la trampa.” This expression can be roughly translated: “Write the law and include the catch.” The “catch” always permits certain favored law-abiding citizens to disregard specific clauses in a law.
The present legal system may be more just and more fair than the legal systems used by other nations. I’m not disputing that possibility. However, our convoluted system of taxing wage earners is not “fair,” although it is defended as “just” by economists and representatives who are elected by the people to enact laws that protect the innocent and promote public tranquility – a rare condition or public mood which is the adverse of public hostility, I believe.
The majority of the law-makers deemed responsible at the time passed legislation to raise revenue to defray the costs of governing. That legislation ought to be questioned by sincere taxpayers from time to time. As a contented resident of the Golden State of California, I cannot complain about unfair tax treatment, because there are many people paying more taxes than I do and many deserving folks who need the entitlements more than I do. Nevertheless, it is the responsibility of the media to inform readers about injustice, unfairness, and favoritism. Otherwise, readers might vote for those representatives who are beholden to special interests favored by tax codes.
Now certain tax treatment is obviously more fair in California than other states. For example, who can object to the exemption from sales tax of food items sold but not eaten in supermarkets? Who can complain that sales tax in California is 9%, but in other states it is much less? Who is bold enough to point out the favoritism of Proposition 13 in California? Under that law those who bought homes before 1978 and still reside in them pay one third of the property tax that home owners must pay who bought homes after 1978? That tax treatment assumes that the “favored” or “protected” shouldn’t have to pay tax on the unrealized value of their homes.
Then, there is the issue of federal income tax on capital gains. These are gains pocketed after the capital item has been sold. Currently, the federal tax law exempts these gains from income earned by sweat labor. They have a preferential tax rate of only 15%, which may seem onerous to some, but certainly is fair for those smart investors who have significant capital gains. The assumption here is that the profit of the sale of something shouldn’t be considered income from wages or interest or dividends. Sounds fair to me. How about you? Everyone gets treated equally if you have realized a capital gain on the sale of some “capital item.”
But there is a catch in the law which favors those who invest heavily and lose and gain a lot. Capital losses realized in the current year are deductible from capital gains before the tax is calculated. However, if your losses are bigger than your gains by more than $3000., you can only deduct that amount from your income taxes that year. That’s a fair restriction, isn’t it? Who could object to that?
Now the most significant tax deduction offered to the individual taxpayer who is wealthy enough to convince their bank that they can afford to buy a house is the deduction of the cost of interest and fees for mortgage and home equity loans. The convoluted thinking by the defenders of this tax advantage is that businesses can deduct interest they have to pay on the loans and bonds they have outstanding, therefore home owners ought to granted some special consideration also.
However, homeowners are authorized to deduct “only” the interest they pay related to loans to buy and renovate the homes that they live in. Interest paid on other legitimate debts is not deductible, and anyone who rents a place to live and pays interest on any kind of debt is completely ignored. Fair is fair!
Moving on to the most discriminatory policy baked into the federal income tax code and accepted by those favored by the tax code is the adoption of progressive tax rates on “earned income.” This tax policy is the most glaring example of prejudicial tax legislation on the books, and it is tolerated with little grousing in America. Why? Do you really want to know?
An Associated Press release dated April 7th (go to Google to look it up) is the source of the following statistics. In 2006, before the Great Recession, the top ten percent of taxpayers paid 73% of the federal income taxes collected from individual tax payers. It has been estimated that 49% of individual tax payers paid no federal income tax in 2008. Many of those filers who paid no taxes received some financial assistance from Uncle Sam. For 2009, the people involved with estimating tax revenue predicted that 47% of individual tax payers would pay no federal income taxes for that year. What group did you belong to? Are you pleased with this news?
Whatever happened to the tithing concept? It went out the window when governments took over the role of God to provide for those suffering humans who need divine intervention to meet their personal needs. I won’t bother you with the history of the ebb and flow of the progressive tax rates which always increase when the federal government gets in a pinch and can’t borrow enough money from the future unborn taxpayers who lack the voice to object. (We will soon find out if the leaders of China finally decide to stop loaning the U.S. government money. These inscutable Asians have to be concerned that unborn Chinese are likely to be saddled with uncollectible debt.)
If fairness and justice are legally defined by popular government action, we will have to adjust our personal criteria about what’s “fair” and what’s “not fair.” We can’t argue about what’s just, can we? Life is what it is, and the role money plays is crucial. Those who feel that they don’t earn enough are in the majority, and our children are taught in school that the majority rules in America. When it comes to paying for democracy, the Communist Manifesto dictates: “From each according to his abilities (to pay) to each according to his needs.”
Can you imagine what Americans would do when the majority of the member nations in the United Nations pass a law that requires rich Americans to contribute to helping the financially stressed humans in other parts of this globe? (The U.S. already makes the largest contribution to the costs of running the U.N.) That seems to be the direction our altruistic leaders are moving if you extrapolate their taxing policy into the future!
Whether you are rich or poor, it’s nice to live in America, where there are examples of “unjust fairness or unfair justice” in all 50 states.