This article was last modified on May 13, 2008.


On How Taxes Work

The following letter was submitted to the Post-Crescent on May 13, 2008:

Initially reading Lewis Rusch’s letter on income taxes, I was moved by his prose and reasoned approach to the issue. However, upon further reflection, I found two glaring problems. First, the letter is blatantly plagiarized from a viral e-mail. And second, Rusch’s reduction makes the issue of wealth distribution far too simple. Even supposing the beer analogy holds true, income taxes are far from the only transfer of money between the government and its people.

In times of war, the poor overwhelmingly get placed on the front lines while upper class investors become war profiteers. As oil and gasoline prices rise, an Exxon CEO makes record salary as the impoverished can no longer afford even to look for work or drive to school. When the housing market crashes, the firms causing the crash get bailed out while the home-owner is left homeless and bankrupt (did we learn nothing from the Savings and Loan crisis of the 1980s?). Individual farmers will never see the subsidies that large agribusinesses (e.g. Archer Daniels Midland) receive.

Some businesses, such as the airline industry (Boeing), weapons manufacturers (Colt) and private contractors (Halliburton, Blackwater) get billions in no-bid contracts, when they would otherwise be forced to close up shop. Successful technology firms get large grants to develop new gadgets — essentially paid by taxpayers to find more things to sell back to them. The legal system focuses on and punishes more harshly petty crimes than million-dollar white-collar crimes.

So, yes, the wealthy pay more than their share of income taxes (even ignoring the cap on Social Security taxes). But the most wealthy among them reap the benefits in spades while the rest of us suffer in an economy where, adjusting for inflation, we will never earn what our parents have.

Also try another article under Letters to ...
or another one of the writings of Gavin.

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