Taxation Without Representation

                                                                                        

We've already reviewed some, but certainly not all, of the expenses assumed in our names by the government pledged to uphold the Constitution. The greatest of these are the so-called “entitlements,”ⁱ such as the welfare package, Social Security, Medicare, Medicaid and the like.ⁱⁱ It's a mixed bag. Part of it is shared by the states,ⁱⁱⁱ while the Federal government is solely responsible for many of the programs. Indeed, some of it is funded through the donations^iv of individuals. But the combination of the cost of entitlements and the debt service for what we owe^v is more than can be handled by the implementation of an internet service so they will not be further addressed here, except to note that these programs are here to stay. Their promises have been around too long for us to back out now, and too many people have come to depend on them. All that we can try to do is to rein them in, make their administration less burdensome, and implement some of the cost-saving methods that have been proposed.

 

But it's time to return to the use of the internet to reduce the National Debt, and, more specifically, how we can trim the expense of collecting revenues.   I am most interested in the revenues provided through the Internal Revenue Service, the IRS.^vi For better or worse, we all deal with it. At least we're supposed to.

The tax system is chaotic. And no one understands it although there are a lot of interpreters who claim they do, or promote their own ability to play the system. Filling and filing taxes is a big business – especially for tax franchises and computer software makers. The IRS is now able to handle returns filed electronically, but that merely remains an option. Universal internet access should be used to make this kind of filing mandatory. Forms should be completed on line – using a government-designed audio/video program guiding taxpayers. There's a lot of money in it and it makes sense that some of it should go back to the taxpayers. The program would ask the same questions as (or possibly better questions than) existing programs and services. Actually they should be a lot better. It's reasonable to expect that the IRS's questions will be more perceptive than someone else's, since no one could possibly understand IRS regulations better than the IRS,^vii and the forms should be simple enough^viii for the average citizen to manage on his own. All IRS forms should be included in the program so that it is (theoretically) possible to complete the task on your own. Even so, some individuals may still require “professionals” to do the dirty work for them, especially for businesses or others who require complex returns, but if the government program is mandated the rest of us can get a cut of the action, even if done by a professional.

Requiring electronic filing of a governmental form, with no option for any kind of filing requiring expensive human intervention, will provide more than the saving of money (a Good thing by itself). Instantaneous auditing of all returns will be possible, as well as immediate payment. By instituting governmental credit/debit cards the IRS can rapidly collect what is due, as well as interest payments on what is owed. And if refunds are warranted, they can be credited immediately. The credit card accounts that result from this system can also be used to collect fees for other services^ix

Converting the existing method of tax collection to an internet/credit account such as this will allow the government to identify those who haven't filed their returns.^x As would be the case with voting, machine function would be frozen if tax forms are not filed. Until the form is completed,^xi what might appear on screen is a notification of the penalty, which would increase daily, for not filing the tax forms.^xii Prior to the filing date, for some predetermined period of time, a daily countdown of days until the deadline would be on screen continuously until filing, and it may annoy some people enough to file, in order to rid themselves of the reminder.

The discussion, however – that of mechanisms of lowering the debt – cannot be completed without acknowledgment that many jobs will be lost. It was previously suggested that the workers would be beneficial to private industry, especially computer construction, but there could be governmental jobs as well, though some may require retraining. Many individuals will be needed for computer repair and internet management, and this will absorb some of the bureaucrats who won't be needed. Most important, though, will be construction of the “infrastructure” – an act dear to the hearts of all our people. Included in such an effort, of course, would be the construction of communications capabilities, including the burying of overhead wires and cables which are susceptible to weather damage, and the protection of the nation' electrical system.^xiii But this is only a small part of what needs to be done. Great efforts should be undertaken to shore up those areas in which damage can be anticipated from future episodes of unusually harsh weather. It will require a large work force to do this, but it will lessen costs and grief in the future. It may diminish the expenses for agencies like FEMA.

Most important in the construction effort would be the building of new roads across country. Much is said about the inefficiency of the automobile as a source of transportation^xiv and the need for more public transportation. The reality, however, is that Americans love their cars. And the personal vehicle can get someone to the place he wants to go, rather than to a “central” clearing house inconvenient to everybody. And the individual driver makes his own schedule. Imagine having modern highways coast to coast with E-ZPass and never having to stop between Key West and Point Barrow^xv or wherever. At least not for tolls. The availability of the roads will create a stimulus for the automobile industry and a need for additional gasoline, until another power source is perfected. Many displaced workers could be employed in the shale-oil industry. Properly managed, shale-oil will make us the greatest producer of gas in the world, and if that is as much of a boon to our economy as anticipated, it will certainly have a long-lived and beneficial effect on our National Debt.

And that brings us back to where we started. There's been some rambling, and there's one more topic I want to cover,^xvi but the bottom line is that a national internet capability will offer the possibility of changing America (for the better). We might even get our representatives to actually represent us and cut our taxes. A higher internet may help us lower our safety net – at least what it costs us.

Enter.

Next episode: “Oh, Give Me A Home” – Help for the foreclosed.

i      How these are viewed depends very much on your philosophy. Some see them as a religious obligation – an act of charity – while others see them as a moral obligation of the rich toward the poor; some consider them to be in keeping with the Constitution, though some view them as contradicting the ideas of the Founding Fathers. Some don't care about the ideas of the Founding Fathers, and some simply don't care.

ii     Conservatives argue that the whole system represents redistribution of wealth from those who have, to those who do not; that the provision of entitlements furnishes a paving stone (or several stones) on the road to Socialism. Liberals point out that everyone, even Conservatives, gains by government programs. (Some might even contend that Socialism is preferable to Capitalism – but that's a different discussion.) They're likely to cite such benefits as the funding of the government itself, the military, road building, and various subsidies. These, however, are dwarfed by the entitlements which the government has taken on itself, and, indeed, some of the programs noted by the Liberals, like the government and the military, are specifically mandated by the Constitution. (Many of our citizens would prefer to pay fees for the non-Constutionally-mandated services if, in exchange, their taxes were significantly lowered because they were not forced to pay for services they did not need or want.)

iii    Or imposed on the states. Like “entitlements,” definitions are in the eye of the beholder.

iv    “Donations” isn't really an accurate description of the funding method of Social Security since participation is mandatory. In any event, your donations may not cover the extent of your benefits, and the difference must be covered by those currently working and by taxpayers in general.

v       Over sixteen and a half trillion dollars at the time of this writing (February 13, 2013).

vi      The Sixteenth Amendment to the Constitution legalizes the income tax, but our “representatives” (the legislators), and the bureaucrats they hire to write the rules, have found ways to soak us that we would never have approved if given the opportunity. In reality we understand neither the rules nor the forms.

vii     Okay. You can stop laughing now.

viii   Perhaps it's wishful thinking to credit the IRS with the ability to make anything simple, but it would be nice if they could.

ix     Like the “co-pay” for computer repair, lottery payments, and the fee for voting if the individual accepts it.

x       It hasn't been discussed, but a parallel internet mechanism would have to be instituted for businesses, charities, and other organizations, so they can receive pertinent information and file necessary documents.

xi      No matter how long it takes.

xii     In addition to interest on unpaid taxes.

xiii  Perhaps we should consider a second electric grid as well to provide redundancy in times of disaster.

xiv    And its carbon tireprint.

xv     We'll give Canada a cut if they participate.

xvi    See “Oh, Give Me A Home,” which will appear on March 17^th. I'll bet you can't wait.

Write If You Get Work

 

There's a not very old saying: “To err is human, but to really foul things up requires a computer.”ⁱ As a human I'm proud to say that we've progressed. We don'tⁱⁱ need machines to do things very badly. There's a movement around the world to achieve justice, and that's our current plan to solve the world's problems. It began with the “Arab Spring” and a drive to gain political justice. From there it progressed to social justice and equality. With the economic downturn around the world this was inevitable. The movement is unfocused and a way of blowing off steam. It's full of sound and fury. But what is the aim? “Tax the rich!” That'll do it. There is no recognition that even if the “rich” have benefited from the current economic meltdown, they didn't cause it, and taxing them won't solve it.

“There is always an easy solution to every human problem—neat, plausible, and wrong.”^iii,iv As I pointed out last week, the top tenth of the American population pay more than two thirds of all income taxes collected, while nearly half of our population doesn't pay any. And the hole most people are in has nothing to do with the “rich.” People are greedy – even the average citizen – and consume things they don't need, believing that they can deal with the costs later. That's what happened with credit card debt, mortgages, education, etc. They believed the day of reckoning would never come. And they believed that they were entitled to what everyone else had. They were keeping up with the Joneses, in a big way.

There were expectations^v which, if not met, demonstrated the greed of others. Nothing was their own fault. The “one percent” were responsible for the plight of the ninety-nine. So now they're venting. Not that it will help, but they want justice and retribution against those not as badly off as they consider themselves.^vi These are presumably the people who caused natural disasters like Katrina, the economic failures in our country and in Europe, hunger in Africa, and like that. The “rich” did it.^vii The solution is a simplistic one and one that won't work – both because of its nature and because of the severity of the problem. It may feel good but it isn't practical. Let me offer some solutions for the US. Perhaps the world will follow them, too.

Our real problem – the one requiring protesters to take to the barricades – is that there is no social justice. There are rich and poor, and since we're not rich we must be poor – at least by that standard. There aren't enough jobs and there are needy and hungry all around. There is no question that the distribution of resources is not equal^viii and equality doesn't exist. Not here and certainly not around the world. But “life is unfair”^ix and we have to “play the hand [we're] dealt.”^x Even socialism has its winners and losers. So here are some sample guidelines as to how to improve the situation of those protesting. (Problems will be presented afterwards.)

1. Require those receiving supplementation from the government to be gainfully employed. That's hardly an original suggestion, and it's been tried before, but there were always objections to it. Admittedly it's not a perfect solution to the problem of entitlements,^xi however it's a good starting point. In the past there have been many who complained that the jobs were menial^xii and the salaries too low, but, from a public policy perspective, as well as one of self-image, it is better to work for a meager salary than to receive charity. It's better because it changes the perspective of those who are now working from that of dependence, to independence. Perhaps some would prefer to live off the dole, but this should not be an option.
2. Salaries should be higher than welfare payments, even after taxes and health insurance are removed. That should encourage people to take jobs. And despite the apparent lack of positions, “make-work” projects, like those under the Roosevelt administration, can be established.  

3. Since there are many who are homeless, one of the projects might be the establishment of new towns on government land with the building of homes and other needed structures. Perhaps if an individual has a stake in a property,^xiii he (or she) will maintain it. Individuals might also be taught (subsistence) farming which would lower their food costs. Such towns should have health care facilities, as well as stores and local government buildings. Training in the construction trades would be needed by many, but the skills would be useful later on. Child care facilities should be part of the town and could serve the dual purpose of allowing parents to work, and providing jobs for them.

4. The “military” should be enlarged rather than curtailed. The Army Corps of Engineers could provide training for many and jobs for others while rebuilding infrastructure. In addition, the training for which the military is justly praised can be used to teach trades to other of our citizens. Indeed, the services could take over the manufacture and provision of many of the materials which we now obtain from private vendors. It could also offer ministrations and facilities for which the taxpayer now contracts out.

5. The “military” could also provide centrally some of the services now provided by the states and local municipalities. These include, among many others, policing, jails and penitentiaries, printing, judicial services (to a point), and health care services. The multiple administrations around the country now required are costly and inefficient.

6. It will still be necessary to provide some supplements and food stamps, as well as universal health care, but the cost for these programs should be reduced by the taxes collected and the fact that those earning a living will have lesser needs.

7. Those who are unable to work because of health or psychological issues should be given whatever care is necessary to return to work. They should be offered group housing rather than forced to live on the streets.

8. Those refusing jobs and the services offered should have to seek whatever charitable assistance was available privately. It should not come at taxpayer expense.                        
9. Institute a national lottery. The states are making out like bandits.
10. Link corporate taxes to job and salary production. The more new jobs a firm creates in the United States, and the higher their salaries, the better their tax benefits. The new employees will both increase income taxes and purchases. And they'll lower the unemployment rate.
11. Link tax brackets to the value of the dollar. If people's taxes aren't going up their spending will.

It is anticipated that many problems would arise, both involving the participants and those whose jobs might be affected by the work performed by those now receiving welfare. Those who are working will resent others if they are making as much money (a situation that will have to be avoided), or, as is inevitable, if they displace them, and those whose private firms are no longer needed to supply the government will lose their business. It would be up to the rest of us to help out. If we truly believe that equality is appropriate,^xiv we should be prepared to pay for it in the form of increased taxes. There is no way that increases limited to the few are going to solve the problem. So the rest of us should be ready and eager to share our resources. Those resources will both support those who need help in the form of employment and the projects that are undertaken. It may make our lives a little more difficult, but there will be a fairer sharing of the burden as we all help to carry it.

For without considering the many, taxing the few is futile. It is an act of envy and vengeance. It may yield some increase in receipts, but that will be small in comparison to the needs. Until we're ready to tax the many – to tax ourselves – we're not likely to make much progress; until we're ready to cut down our spending we won't make a dent in our debt. In fact, it will increase as we increase social programs. And there will be people other than the poor who will benefit from those increases because they find legal ways to do so. They may provide the services that are mandated by the increased entitlements. They may find ways of exporting the provision of necessary services abroad^xv to achieve higher profits at the cost of jobs in the United States. That's contrary to our current problem of job shortages, but providing jobs is not their priority.

Will the system I am proposing work? Of course not. Mencken would tell us that immediately. But it will keep us busy for a while, and out of the way of those who are really solving whatever economic problems don't correct themselves.

[Please note:  There are some formatting errors which I was unable to eliminate.  Sorry about that.]

Next episode: “Dina” – Not the one in the kitchen.

i     The Farmer's Almanac, 1978

ii    Actually, we never did.

iii    H. L. Mencken, “The Divine Afflatus,” in the New York Evening Mail, November 16, 1917

iv    In order to get something right, you need several thousand pages of regulations. They're certainly not neat and plausible. Or understandable. They must be right.

v     Nothing is worse than raising expectations. If you don't expect much you'll settle for less. Once your expectations are high, what is needed to meet those expectations increases.

vi    It would be interesting to know how much the average “poor” protester spends a month for his/her hand-held electronic devices, the monthly communication charges for telephones, texting, Tweeting, and the like, “apps,” newspaper and magazine subscriptions, cable or satellite service, health clubs (including those that promote zumba and Pilates), running shoes, exercise gear, high-end coffee, yoga, lottery tickets and casino gambling, meals out and the expensive diets to deal with their results, useless dietary supplements, overpriced movie tickets, travel, and other similar bare necessities.

vii    In reality, it was the congressmen who did it. They should be watched carefully and be taxed for the extra perks they receive from the government and for the benefits they get from lobbyists, and punished for putting in special legislation to aid the lobbyists' clients. And they should have to live by the same laws as the rest of us. One of our goals should be to take the perk out of pork.

viii    Globally there is also a maldistribution of resources but no major protests exist that suggest that we should send ours around the world. Would the world reciprocate? I doubt it, so we'll just redistribute among our own citizens. (This brings up the issue of illegal aliens, but it's better not to raise that issue at this time.)

ix    President John F. Kennedy, news conference, March 21, 1962. There are many variations of this view, but the real issue relates to why that is the case. Who makes the decisions that are unfair for others? Do they relate to national policies, natural disasters, a nation's lack of resources and industry? All play a part – greater or lesser – depending on the particular example of “unfairness.”

x     Jawaharlal Nehru.

xi    There is no perfect solution or complete solution. But if we wait for one we'll never do anything.

xii    Many of those who are sensitive to the menial nature of the jobs offered are socially conscious individuals who, despite their own virtue, would probably bristle if the unskilled and poor were offered positions paying more than their salaries. Or if the people for whom they were protesting became their supervisors. That wouldn't be menial for the others, but it might make their own activities menial.

xiii    And maybe forty acres and a mule.

xiv    Some might call that socialism, but such a label would be rejected even by some of the more liberal of the protesters.

xv    Eg medical jobs like teleradiology, the production and manufacture of food products, other manufacturing positions, telephone jobs, etc. Even if we encourage job creation in the United States, there will still be money to be made by exporting some jobs. We have to find a way to tax that.