4.14.2009

Great American Past-Time: Complaining about Taxes

So, while a small minority of people are out and about allegedly protesting tax policy, and government waste, few are mentioning what the real problems with the system are, and how to solve them. This is obviously too huge a topic to discuss thoroughly here, but here are some highlights:
Caveats/Observations: 
1) Taxes are generally thought to be distasteful, irritating, and complying with a tax code that's "seven times longer than the Bible" is bothersome at best. 
2) The Federal Government does a terrible job conducting tax policy: The estimates on revenue losses due to inefficiencies in the tax code largely surpass $100 billion. 
3) If the Federal Government were an exchange listed publicly traded company, the CEO would be fired immediately, and the business would be bankrupt- on this data set alone: The best estimates on revenue that isn't captured from existing delinquencies, mistakes, and insufficient manpower to effect collections is also in excess of 4.25% of the total federal Title 25 authorized collections. All federal receipts for FY 2008, amounted to roughly $2.66 Trillion, which means that another $113 billion dollars could be added to revenue, just by the government doing it's job properly.
So Yes (!), frustration with waste, inefficiency and incompetency are warranted regarding taxes and tax policy. However, when you look at the federal debt obligations, the open ended/ongoing commitments made, and the vast infrastructure which constitutes the Federal Government, any sane person realizes that a solid, stable, fair, lean, efficient, and effective tax policy/implementation is a necessity. 
The argument for relegating substantial components of the Federal infrastructure and returning more administrative power to the States, is a nobel one: which is to say a useful goal that should be taken seriously and made part of our road map to future effective governance. But the facts on the ground make achieving that goal in the near future a virtual impossibility. First, the Federal Government has too many obligations, especially to sovereign states, and domestic entitlements. Second, the state governments are largely a disaster: straightjacketed by referendum, incompetently managed, and also in significant debt jeopardy. 
All these entities (taxpayers, federal, states) need to stop complaining about the tax systems we have and do something. How about these basic "Econ 098" ideas for starters: closing loop holes, capturing all the revenue under code, writing sensible tax policy and enforcing it fairly, writing and utilizing better budgeting, and just generally treating every government entity as if it were a failing business needing to process through an aggressive turn around phase. 
Once we clean up our mess, then and only then, will we have earned the right to begin to invest less in the federal government and more in ourselves. And for the critics who don't like that reality:  take a more central/active role in understanding the inner workings of our government so that you can help fix what's broken, instead of sending tea bags with Fox Noise. This problem started because you were not paying close enough attention over the last several decades, and now you have an obligation to pay for your lack of diligence: and you will continue to pay in taxation until you fulfill your responsibilities as citizens.

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