This article was last modified on May 9, 2006.


Pat Sajak’s Tax Reform

Pat Sajak correctly identifies that no one seems to agree on what to do about the tax code. Some want taxes lowered, some want them increased, others want a flat tax, and other options exist. This might seem like a simple and common sense observation, but it has two things of note about it.

First, credit must be given to Pat Sajak for identifying that certain people wish taxes to be raised. I happen to be one of those people. While many people will blame the government for raising taxes, they are not the only people who want to increase taxes. People in all walks of life see the benefits that come with higher taxes. The problem is not in what you are paying in, it is what you are getting back (and Sajak identifies this, as well). If the return is greater than the amount put in, then taxes being raised seems like a wise and frugal choice. Most advanced countries (such as Canada and Denmark) have used this system with great responses. But I am not trying to make an argument for higher taxes, so I will move on.

The second underlying point is that taxes are but one problem with democracy. With so many options available, you simply can’t make all the people happy. You can’t even make half the people happy. With three or more choices available, I am sure that none of them would achieve a fifty percent vote (and even then, it would only be fifty percent of the voters, not the overall population – meaning only about twenty percent of the country agrees). With a decision being left to the rabble being a guaranteed failure, perhaps it is best we do not rely on them to legislate our tax codes.

Now, there are many ideas regarding how to reform taxes to create a better taxing body, as stated in the introduction. But one of those bright ideas is not the idea of Pat Sajak, who wishes to stop withholding income taxes altogether. That’s right, you get your entire paycheck.

Does this sound nice to you? Getting an extra couple hundred dollars a month to play around with? Of course it sounds good, everyone wants more money. But this idea is a disaster waiting to happen.

I said above that taxes are good if the return is greater than the investment. And that is precisely what taxes are good for. Giving this money to the consumer to put back into the system would do nothing to increase the return on that investment. We aren’t getting a better deal somewhere besides from the use the taxes already have. Because Sajak doesn’t want us to have our money to spend. He knows we have to pay for the government. He just wants us to get it physically before paying in so we can see how much we are actually spending on taxes (instead of the check deductions most of us never look through).

This creates the increased problem of people not paying their taxes. Maybe Sajak has high hopes for the American people. Maybe he thinks they would gladly pay their taxes his way. I am very doubtful. How many people refuse to pay their bills month after month? Some people are simply not responsible and will never be. Giving them tax money only adds one more thing to be responsible for, and people will screw that up. Tax evasion as it stands is a big enough problem, but how out of control will things be when all the irresponsible people stop paying in?

This method of tax collection adds the problem of the extra step: writing a check and mailing it. The benefit of this is that the United States Postal Service would have an incredible influx of customers, but this hardly outweighs the negatives. One life lesson I live by is it is always best to make things only as difficult as necessary and as simple as possible. The extra step only adds the potential for human error. Sure, this step could be overcome by using direct deposit and then having the government directly withdraw from your bank account. But this only repeats what could have been done automatically by the government from your check.

And this extra step of writing a check is precisely what Sajak is hoping for. Why? He believes that the American people, if they look at what they pay in taxes each month, will become more involved in the political system and pay more attention to where their tax dollars are spent. Sajak’s idealism makes me blush. He says, “We have been conditioned to think of the money withheld as never having belonged to us. And that leads to the way government looks at taxes. It’s their money, not yours. It was never yours. They decide how much to keep, and they allow you to have the rest.” Even if it is true that people see their net salary as their “real” salary, is it really better to add the extra step? I would rather have the government take what is “theirs” than get money only to have to pay it back. This creates a false sense (or a real one if you’re delinquent) of debt, and creates the impression of reneging (“you give me the money only to take it back the next week?”).

Does Sajak really think people would become more involved in politics if they saw their money being spent on a tax bill? Let me see:

a. People pay property tax with a check, and this does nothing to change the way people view their property.

b. People seeing what they pay on taxes are going to want their taxes lowered. I do not suspect they will become interested in politics and see what happens in Washington. They will just want more money back, regardless of what this money may be used for (which may or may not be good depending on your tax views).

The fact is that some or most people do not care about politics and never will care about politics. This is the second problem with democracy I wanted to highlight. Every election we try to bring more people into the system and register them to vote. But these are people who had no desire to vote. They never cared about the issues and never bothered to become informed. Leaving voting as an option rather than a forced thing leaves voting in the hands of the concerned. Wouldn’t better choices be made by thirty percent of the people than one hundred if those thirty were informed? Otherwise you have a majority (seventy percent) voting on a whim and we may as well draw straws.

Compare this to having ten people, three of them neurosurgeons, and having them vote on how to perform brain surgery on your children. Do you really want to encourage the rest of the people to be involved? I assure you this push will do nothing to increase their knowledge of brain surgery.

Sajak’s motives are noble – giving America back to the Americans and shaping this country in their image. But what sounds good on paper hardly ever appears the same in practice. Why create more hassle and criminal offences when the system works? The same people who want to change the tax code (see first paragraph) are the ones who already know something about taxes. Don’t let the children teach the teachers.

Sources:

Sajak, Pat. “A Modest Proposal.” http://www.patsajak.com/news2.php?view=says&id=25 November 15, 2004

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

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