Responsibility #74

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=110 BGCOLOR="#666699" TEXT="#080000" bgproperties="fixed" background="04900840erlcjm.png"> <div> <FONT SIZE="5" COLOR="#FFFFFF" FACE="Arial" ><B>NATIONAL SECURITY--Structural,Moral,Economic,Domestic,International</B></FONT><B>     |     </B><A HREF="index.htm" TARGET="_top" TITLE="NATIONAL SECURITYStructural,Moral,Econom"><U><B>home</B></U></A></div> <div> <A HREF="id33.htm" TARGET="_top" TITLE="Responsibility Contents"><U>Responsibility Contents</U></A>   |   <A HREF="id34.htm" TARGET="_top" TITLE="Responsibility 1"><U>Responsibility #1</U></A>   |   <A HREF="id35.htm" TARGET="_top" TITLE="Responsibility 2"><U>Responsibility #2</U></A>   |   <A HREF="id36.htm" TARGET="_top" TITLE="Responsibility 3"><U>Responsibility #3</U></A>   |   <A HREF="id37.htm" TARGET="_top" TITLE="Responsibility 4"><U>Responsibility #4</U></A>   |   <A HREF="id38.htm" 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to President, et al,"><U>Health Care Letters to President, et al, 8/24/94</U></A>   |   <A HREF="id123.htm" TARGET="_top" TITLE="Arguments for Delay in Enactment of a He"><U>Arguments for Delay in Enactment of a Health Care Bill</U></A>   |   <A HREF="id124.htm" TARGET="_top" TITLE="Post WORLD WAR IIPost COLD WAR Deja Vu"><U>Post WORLD WAR II--Post COLD WAR Deja Vu</U></A>   |   <A HREF="id125.htm" TARGET="_top" TITLE="Responsibility 89"><U>Responsibility #89</U></A>   |   <A HREF="id126.htm" TARGET="_top" TITLE="Responsibility 90"><U>Responsibility #90</U></A>   |   <A HREF="id127.htm" TARGET="_top" TITLE="Responsibility 91"><U>Responsibility #91</U></A>   |   <A HREF="id128.htm" TARGET="_top" TITLE="Responsibility 92"><U>Responsibility #92</U></A>   |   <A HREF="id129.htm" TARGET="_top" TITLE="Responsibility 93"><U>Responsibility #93</U></A>   |   <A HREF="id130.htm" TARGET="_top" TITLE="Responsibility 94"><U>Responsibility #94</U></A>   |   <A HREF="id131.htm" TARGET="_top" TITLE="Responsibility 95"><U>Responsibility #95</U></A>   |   <A HREF="id132.htm" TARGET="_top" TITLE="Responsibility 96"><U>Responsibility #96</U></A>   |   <A HREF="id133.htm" TARGET="_top" TITLE="Responsibility 97"><U>Responsibility #97</U></A>   |   <A HREF="id134.htm" TARGET="_top" TITLE="Responsibility 98"><U>Responsibility #98</U></A>   |   <A HREF="id135.htm" TARGET="_top" TITLE="The Structure of Our Nation is Unsound"><U>The Structure of Our Nation is Unsound</U></A>   |   <A HREF="id136.htm" TARGET="_top" TITLE="Ltr. to Editor, 3/19/96, Property Taxes "><U>Ltr. to Editor, 3/19/96, Property Taxes and Education Funding</U></A></div> <div> </div> </td> </tr><tr> <td valign="top" width=190 BGCOLOR="#CCCCFF" TEXT="#080000" background="04311c00egdysm.png"> <bR> </td> <td valign="top" height=370 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> Responsibility #74</div> <div> To the People of the United States of America:</div> <bR> <div>      <U>6th postscript, April 1994</U>.  This is a continuation of paper #73.  We began a discussion of a potpourri of news items concerning taxes and appropriations advocated, proposed, and/or enacted, by individual citizens, through various levels of government, up to the President, during the terms of President Clinton and the 103rd Congress to date.  These demonstrate how clearly and widely the nation continues to avoid the lessons of history, at the risk of catastrophic consequences.</div> <bR> <div> 2. On tax day 1994 (April 15), a news article had the exciting banner: "Hold on, Washington thinks you're rich".  The text called to the attention of 1993 tax-filers, that the new President and Congress had enacted new tax brackets of 36 and 39.5 percents, retroactive to January 1st of that year.  It noted that the 36% bracket applied as low, for single taxpayers, as taxable incomes of $70,000.  Since the President (as a candidate) had promised to raise taxes only on the rich, obviously the country now had a great many new rich people.</div> <div> Notwithstanding the sarcasm regarding the definition of rich, nor the question raised as to the constitutionality of passage of a retroactive tax, the important thing to appreciate is that the government has succumbed again to the disuniting, inequitable, anti-<I>"property rights",</I> employment and expansion of multiple income tax brackets.</div> <div> The article also noted that Congress raised the federal estate tax rate.  Why do we have federal (and States') estate taxes? Why should a portion of a person's estate be confiscated upon death?  Has not that estate, as it was earned and accumulated, been subjected to all the other pay-as-you-go taxes (i.e., income, capital gains, sales, real property, personal property, etc.)?  What new benefit before or at death did the decedent, his family, or his property, receive from any government (federal or State) which constituted <I>"just compensation"</I> for the property taken for public use?  </div> <div> Why should the decedent (or his beneficiaries) be treated adversely in comparison to those who have chosen to spend or squander the earnings or gifts of their lifetimes?  Indeed, in general, the nation will have been much better served through jobs and industries dependent on the savings and investments of accumulated estates!</div> <div> The same question applies to the imposition of gift taxes.  Why should anyone be required to give the government, a portion of what he chooses to give to someone else?  The properties that constitute gifts have been (before given) and will be (after receipt by the new owner) subjected to the pay-as-you-go taxes. The government(s) have given no benefits, nor incurred any costs, by virtue of the giving.  As recommended in a previous RESPONSIBILITY paper, in the cases of both estates and gifts, settlement on capital gains taxes should be triggered by change in ownership of the various properties transferred.</div> <div>      </div> <div> 3. Politicians, special interest groups, journalists, et al, are forever deluding their constituents, members, readers, etc., by pressing the funding of appropriations on businesses (vis-a'-vis individuals).  This deceit is a principal feature of the Clinton (as well as other) proposed Health Plans.  </div> <div> Two journalists, in a newspaper article of April 10,1994</div> <div> (entitled "Journalists look at who pays taxes"), quoted two other reporters: "If corporations in 1994 paid taxes at the same rate as corporations did through the 1950s, the U.S. Treasury would collect an extra $250 billion a year.  That's two-and-a-half times as much money as corporations presently pay in taxes." 'And if 1950s corporate tax rates were in effect today,' "nearly two-thirds of the federal deficit would disappear overnight."</div> <div> Hogwash!  Only individuals, one way or another, pay the costs of corporate taxes.  Taxes constitute a cost of doing business, whether applied before or after what ever definition is given to net income-taxable income.  </div> <div> Tax costs of doing business result in one or more of the following: (1) competitive market permitting, customers pay increased prices; (2) where all or a sufficient number of businesses are saddled with the added tax, the economy is subjected to inflation; (3) where businesses are unable to increase prices (due to competition or government imposed price controls), the first avenue of attack is to trim employee expenses (layoffs, decreased discretionary benefits, shortened hours, use of contract or part-time employees); (4) same premise as (3), cut-back or cancel plans to increase hiring or buy capital equipment; (5) same premise as (3), decrease or cancel dividends to stockholders; (6) results (3), (4) or (5) cause less tax receipts from effected individuals (which in turn necessitates the government to increase tax rates to make up the tax loss or allow a greater deficit); (7) if the added tax cost proves to be the limiting burden on the camels back, the company exercises its final options (i.e., cuts operations, moves out of the country, merges, falls victim to a takeover bid, Chapter 11 or 7 bankruptcy), anyone of which decreases jobs and business tax revenues. </div> <div> Stop with the placebos!  There is no easy way to end deficits and start paying off the national debt.  As argued in prior RESPONSIBILITY essays, the line for imposition of taxes on businesses should be drawn at the distinction of taxes incurred by business operations.  A couple of prime examples will make clear the rationale.  </div> <div> Health, injury, or death, risks or incidents, on the job are clearly a cost of doing business--the costs of which should be borne by the employer, and equitably distributed among customers through the prices of products and services sold.  This is already done through the Occupational Safety and Health Act and other requirements on the employer.</div> <div>     </div> <div> In contrast the provision for (non-work related) health care benefits for employees should not be mandated, nor incentivized or subsidized (through tax deductions or credits, or payments), by the government.  Tax incentives and subsidies constitute particular (vs. general) welfare, place tax burdens on non-participants in the largess, and are therefore a violation of <I>"property rights".</I>  Health care benefits have been treated by the IRS as tax exempt for covered employees since World War II.  The law or administrative finding should have long ago been repealed, or found unconstitutional by the courts.</div> <div>   </div> <div> Mandates on employers, tax exemptions, and subsidies are primary features of the Clinton Health Plan.  It (or any alternative employer mandated, tax advantaged or subsidized plan) should be rejected as inequitable and unconstitutional.  If there is to be a mandate, it should be on the individual.  Where employers choose to pay for health plans, the benefit should be treated the same as wages and salaries for tax purposes.</div> <bR> <div>      Similar conclusions can be drawn for Social Security and tax-deferred retirement plans.  These examples will be covered at the outset of the next paper.</div> <div>           Publius IV</div> <div> <A HREF="id108.htm" TARGET="_top" TITLE="Responsibility 75"><U>Responsibility #75</U></A></div> <div> Back to: <A HREF="id33.htm" TARGET="_top" TITLE="Responsibility Contents"><U>Responsibility Contents</U></A></div> <bR> </td> </tr></table></body>