Income Taxes, The Vampire of Civilization - Part 3

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0><script type="text/javascript" src="http://hb.lycos.com/hb.js"></script> <script type="text/javascript" src="http://ratings.lycos.com/ratings/lycosRating.js.php"></script> <script type="text/javascript"><![CDATA[//><!]]></script> <script type="text/javascript" src="http://scripts.lycos.com/catman/init.js"></script> <script type="text/javascript" src="http://members.tripod.com/adm/ad/code-start.js"></script> <script type="text/javascript" src="http://members.tripod.com/adm/ad/code-middle.js"></script> <script type="text/javascript" src="http://members.tripod.com/adm/ad/code-end.js"></script> <noscript> <img src="http://members.tripod.com/adm/img/common/ot_noscript.gif?rand=738673" alt="" width="1" height="1" />  <iframe frameborder="0" marginwidth="0" marginheight="0" scrolling="no" width="728" height="90" src="http://ad.yieldmanager.com/st?ad_type=iframe&ad_size=728x90&section=209094"></iframe>  </noscript> <table cellpadding=0 cellspacing=0 border=0 height="100%"><tr> <td valign="top" width=165 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <A HREF="id17.htm" TARGET="_top" TITLE="Income Taxes, The Vampire of Civilizatio"><U>Income Taxes, The Vampire of Civilization - Part 1</U></A></div> <div> <A HREF="id21.htm" TARGET="_top" TITLE="Income Taxes, The Vampire of Civilizatio"><U>Income Taxes, The Vampire of Civilization - Prt 2</U></A></div> <div> <B>Income Taxes, The Vampire of Civilization - Part 3</b></div> <div> <A HREF="id23.htm" TARGET="_top" TITLE="Income Taxes, The Vampire of Civilizatio"><U>Income Taxes, The Vampire of Civilization - Part 4</U></A></div> <div> <A HREF="id24.htm" TARGET="_top" TITLE="Income Taxes, The Vampire of Civilizatio"><U>Income Taxes, The Vampire of Civilization - Part 5</U></A></div> <div> <A HREF="id25.htm" TARGET="_top" TITLE="Income Taxes, The Vampire of Civilizatio"><U>Income Taxes, The Vampire of Civilization - Bibliography and Footnotes</U></A></div> <div> <A HREF="id18.htm" TARGET="_top" TITLE="The Real Reason for Violence in America"><U>The Real Reason for Violence in America</U></A></div> <div> <A HREF="id29.htm" TARGET="_top" TITLE="Random Thoughts"><U>Random Thoughts</U></A></div> <div> <A HREF="http://www.hillracing.com" TARGET="_top" TITLE="http://www.hillracing.com"><U><B>Back toTom Hill,</b></U></A></div> <div> <A HREF="http://www.hillracing.com" TARGET="_top" TITLE="http://www.hillracing.com"><U><B>E.A. Inc.</b></U></A></div> <bR> <div> <B><IMG SRC="10983610.gif" border=0 width="131" height="97" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></b></div> </td> <td valign="top" BGCOLOR="#FFFFFF" TEXT="#080000"> <bR> <div> <B>The Draining of the Will</b></div> <div> <B>Production, Morale and Taxes</b></div> <bR> <div>      <I>His voice was like silk on a wound, gentle with an edge of pain. Like sex.  It was like velvet rubbing inside my skull.  It felt good, even with fear tearing through my body...  He could still have me.  Still take me down.</I><FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" ><I>48</I></FONT></div> <bR> <div>      The IRS seduces us with lures of tax refunds (they are graciously going to give us some of our own money back), deductions, tax shelters, and lower tax rates.  We consider that we must do our fair share to support our country because we are basically good people and we want to contribute to the well-being of our home land.  However, when we get that pay check every pay period and we see how much has been taken out for taxes, we at least cringe.  We wonder, "Why am I working so damn hard just to support a government that is giving my money away to those who don't earn it?<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >49</FONT>"  It usually feels good to live in the United States even though the government and the IRS instill fear in us, all the time knowing they can still have us, still take us down.</div> <bR> <div>      The vampire drains our will and tries to make us into one of his kind by punishing our desire to produce and thereby lowering our morale so the only solution seems to be to cheat the vampire.</div> <bR> <div>      As stated earlier, (page 6) the basis of morale is production.  Author and educator, Ruth Minshull agrees, "How a person spends his time strongly influences his emotional tone.  If he is idle, without goal or direction, he will go downscale."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >50</FONT>Downscale means to go down in emotional tone.  What is the significance of this statement, that production is the basis of morale, in relation to income taxes?  Is there really any connection?  Does the earlier section on the history of taxes have any meaning in this discussion?  I believe the answer to all of these questions is yes.</div> <bR> <div>      The 16th Amendment authorizing the collection of income taxes was enacted in 1913.  Coincidentally, shortly thereafter, in 1916, the first child labor law was passed by Congress.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >51</FONT>  Also, not so coincidentally, according to the World Book Encyclopedia, juvenile "delinquency rates were reported rising during the early 1900's".  The World Book goes on to state that during the 1970's about half of all arrests for burglary and theft in the United States were of people under the age of 18.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >52</FONT>  Look in the daily papers in 1995 and see if you think the statistics have improved.  I think not.</div> <bR> <div>      Did the 16th Amendment have any direct bearing on juvenile delinquency?  Probably not.  The point is that when a person is denied the chance to produce and contribute to that person's group or family, then that person's morale will drop until the only game in town becomes protest, rebellion, and alienation from the group or family.  Eventually, that game turns to crime as a means to create an effect.  (I pity the teenager of today that is trying to create an effect on his/her formerly hippie parents by getting tattoos, wearing earrings in places other than ears, coloring his/her hair, etc.  We've been there, done that, and now we're cutting our hair and wearing suits and ties, just like our parents did.  I suggest looking for a more survival way to create an effect.)  However, I'm not attempting to solve the issue of juvenile delinquency at this time.  I am trying to arrive at a better understanding of the effects of income taxes on our society.</div> <bR> <div>      Now you might ask, "Well, if we're all paying our income taxes, then aren't we contributing to the country and so why should we feel alienated from it, and why would we want to change to another type of tax system?"  Good question.</div> <bR> <div>      First of all, not everyone is paying his taxes.  I'll go into more detail on that in a later section.</div> <bR> <div>      Here are some interesting graphs.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >53</FONT></div> <bR> <bR> <div> <IMG SRC="05007bd0.gif" border=0 width="263" height="189" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"><IMG SRC="05107bd0.gif" border=0 width="263" height="189" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <div>      Notice that the unemployment rate rises coincident with the taxes collected.  It would seem logical that when the unemployment rate reaches a certain high that the taxes collected will plummet.  (It is very difficult to squeeze blood out of an unemployed turnip.)  Do we really want to find out how high the unemployment rate can get before we reach "critical mass"?</div> <bR> <div>      The income tax system destroys initiative.  Lowered initiative means lowered production.  Lowered production equals lowered morale.  Lowered morale begets unusual solutions to raise the morale and one of those solutions is crime.  As stated earlier, crime is "an act that is against the law."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >54</FONT>  Most people's solution to the inequities of the income tax system is to cheat on their income tax returns.  This is a crime.  Tax evasion carries a potential sentence of five years in jail and a fine of $100,000.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >55</FONT>  When you sign your tax return you are stating that it is correct and you sign it “under penalties of perjury.”<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >56</FONT>  You probably won’t receive the maximum penalties for a simple cheat on your return but I wouldn’t want to have to bet on it.  Do most taxpayers consider themselves criminals?  I doubt it.  But they are, in the sense that every time their tax return is incorrect, for whatever reason, and they file it, with their signature at the bottom stating it is correct, then they have committed a crime.  Who cheats on their tax returns?  Hall and Rabushka claim "millions of otherwise respectable people – doctors, lawyers, accountants, carpenters, plumbers, contractors, retailers, restaurateurs [<I>sic</I>], and others – who engage in legal activities... fail to report all or some of their income to avoid paying taxes."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >57</FONT>  Diogenes (the IRS agent) states, "my guess is that at least half of all taxpayers and probably more have cheated at some time during their taxpaying careers."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >58</FONT>  Adams, putting the estimate of cheaters a bit higher, explains, "This is the crux of the problem – everyone is in a constant state of illegality, arrestable at any time for a "felony" manufactured by the state."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >59</FONT>  It would seem that a lot of people cheat on their tax returns. Does the IRS think so, too?</div> <bR> <div>      Directly from the vampire's mouth we get;</div> <bR> <div>      In October 1995, IRS offices around the country will initiate the Taxpayer Compliance Measurement Program (TCMP), a two-year program of audits designed to measure the compliance levels of U.S. taxpayers.</div> <bR> <div>      Returns selected for a TCMP audit are subjected to a more in-depth examination, usually requiring taxpayers to support <I>every entry</I> (emphasis mine) on the tax return.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >60</FONT></div> <bR> <div>      The IRS just doesn't trust the American taxpayer and they are going to look at every vein and artery in the taxpayer's financial body to make sure that the taxpayer isn't hoarding a little blood for survival.</div> <bR> <div>      According to <FONT SIZE="3" COLOR="#0099FF" FACE="Times New Roman" ><A HREF="http://www.kiplinger.com/letters/tax.htm" TARGET="_top" TITLE="http://www.kiplinger.com/letters/tax.htm"><U><U>The Kiplinger Tax Letter</U></U></A></FONT>, "<U>the gov't wants tax cheats investigated."</U><FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" ><U>61</U></FONT>  and "<U>IRS is shooting for its highest audit rate in six years</U> in '95... an additional 450,000 audits... pushing the audit rate to 1.25%."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >62</FONT>  Seems like a small percentage, doesn't it?  Kiplinger goes on to state that the IRS has to hire 5,000 more vampires, er... examiners, all of whom will have to be trained.  If the IRS could hire 100,000 examiners and put them to work right away, it would do so and you would see that percentage rise dramatically.  Now that 1.25% is per year which makes it a strong possibility that one out of every two people in the United States will get audited at least once in their taxable lifetime.</div> <bR> <div> <IMG SRC="062fa850.jpg" border=0 width="506" height="389" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <div>      Diogenes says, "of the 1.5 million returns examined by auditors and agents that year (1971), a million – two-thirds – showed deficiencies.  The dollar total of those deficiencies was almost $3.5 billion."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >63</FONT>  Carrying this out to two-thirds of 106 million returns filed for 1994 that means that taxpayers are cheating the government out of $247 billion dollars a year.  The estimated deficit for the fiscal year ending September 30, 1994 was $253.5 billion<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >64</FONT>.  <U>The money taxpayers cheated the government out of could have practically handled the deficit!!!</U>  If everybody filed their tax returns (I'm talking about drug dealers, prostitutes, etc.) since 1913 and no one cheated, the United States would be so rich by now we wouldn't know what to do with it all.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >65</FONT>  BUT IT ISN'T WORKING THAT WAY!!!  WHY NOT???  BECAUSE THE EXISTING SYSTEM PENALIZES PRODUCTION THEREBY LOWERING MORALE AND CREATING A SOCIETY OF TAX CRIMINALS!!</div> <bR> <div>      Am I alone with this idea?  I think not.</div> <bR> <div>      Jack Trotter, a Houston CPA and investor, says, "our current system levies taxes on production...  Thus we get less income produced..."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >66</FONT>  When you tax something you get less of it.  That's why we have import tariffs, to lessen the imports so they don't so easily compete with local products.  President Clinton recently threatened the Japanese with a 100% tariff on Japanese luxury automobiles.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >67</FONT>  His reason for doing so was to force an agreement with the Japanese.  Doing so would have meant fewer sales of luxury import vehicles and consequently fewer such cars imported into the United States.  So when you tax something you get less of it.  Taxing production (income) gives one less production.</div> <bR> <div> <IMG SRC="064aa8b0.jpg" border=0 width="426" height="395" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <div>      Patrick Buchanan puts it another way in his bid for doing away with income taxes.  "...workers would no longer be taxed at higher rates for overtime.  There would be every incentive to work longer."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >68</FONT>  Why work more and produce more if most of the extra production (income) is taxed?  A single man working 40 hours a week at $10/hour has $46 taken out of his check each week for Federal withholding (income tax).<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >69</FONT>  If he works an additional ten hours a week at time and a half for overtime he has $73 withheld from his pay, an increase of $27 or 59% increase in taxes for a 25% increase in work. Twenty hours of overtime is even worse.  (See table below.)</div> <bR> <div>   <A NAME="gross_pay_chart"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="1" ALIGN="bottom" WIDTH="1" HSPACE="0" VSPACE="0" ></A></div> <div> <TABLE BORDER="2" CELLPADDING="1" CELLSPACING="1" WIDTH="647" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP BGCOLOR=#E5E5E5 HEIGHT= 39 WIDTH="88"><div> Hours Worked</div> </tD> <tD VALIGN=TOP BGCOLOR=#E5E5E5><NOBR><div> Gross Pay</div> </NOBR></tD> <tD VALIGN=TOP BGCOLOR=#E5E5E5 WIDTH="106"><div> Federal Withholding<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >70</FONT></div> </tD> <tD VALIGN=TOP BGCOLOR=#E5E5E5 WIDTH="100"><div> Social Security / Medicare</div> </tD> <tD VALIGN=TOP BGCOLOR=#E5E5E5><NOBR><div> Net Pay</div> </NOBR></tD> <tD VALIGN=TOP BGCOLOR=#E5E5E5 WIDTH="178"><div> Percent of Increase in W/H Tax Versus Increase in Work</div> </tD> </tR> <tR> <tD VALIGN=BOTTOM HEIGHT= 20 WIDTH="88"><div> 40</div> </tD> <tD VALIGN=BOTTOM WIDTH="76"><div> 400.00</div> </tD> <tD VALIGN=BOTTOM WIDTH="106"><div> 46.00</div> </tD> <tD VALIGN=BOTTOM WIDTH="100"><div> 30.60</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 323.40</div> </tD> <tD VALIGN=TOP WIDTH="178"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="20" ALIGN="bottom" WIDTH="178" HSPACE="0" VSPACE="0"></tD> </tR> <tR> <tD VALIGN=BOTTOM HEIGHT= 20 WIDTH="88"><div> 50</div> </tD> <tD VALIGN=BOTTOM WIDTH="76"><div> 550.00</div> </tD> <tD VALIGN=BOTTOM WIDTH="106"><div> 73.00</div> </tD> <tD VALIGN=BOTTOM WIDTH="100"><div> 42.08</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 434.93</div> </tD> <tD VALIGN=TOP WIDTH="178"><div> <B><U>59%</U></b> / 25%</div> </tD> </tR> <tR> <tD VALIGN=BOTTOM HEIGHT= 20 WIDTH="88"><div> 60</div> </tD> <tD VALIGN=BOTTOM WIDTH="76"><div> 700.00</div> </tD> <tD VALIGN=BOTTOM WIDTH="106"><div> 115.00</div> </tD> <tD VALIGN=BOTTOM WIDTH="100"><div> 53.55</div> </tD> <tD VALIGN=BOTTOM WIDTH="64"><div> 531.45</div> </tD> <tD VALIGN=TOP WIDTH="178"><div> <B><U>150%</U></b> / 50%</div> </tD> </tR> </TABLE></div> <bR> <div> Such taxation is not much of an incentive to work overtime.</div> <bR> <div>      William Keffer, senior lawyer for an oil company in Dallas, tells us:</div> <bR> <div>      Our income tax system punishes productivity.  If any concept should be anathema to the American spirit, it is this one.  Our free-market ideals and entrepreneurial tradition should reward productivity.  The income tax takes our money before we even see it and dares us to make more – only to surrender more of it involuntarily to the government.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >71</FONT></div> <bR> <div> Mr. Keffer is saying that the concept upon which this country was founded, a free society, is being compromised with the income tax system.  How can we be free and at the same time be forced to pay an unfair tax?<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >72</FONT>  Are we really free if we are punished for producing?  We punish convicted criminals by sending them to jail.  The rest of us are punished by paying for crimes committed by others.  Welfare recipients, illegal immigrants, convicted criminals all take something for nothing; they do not exchange something valuable for something valuable.  The taxpayers and honest citizens (not necessarily mutually inclusive) pay for these crimes of others, either through paying taxes or by getting robbed outright.  Many people are wondering why they should continue to pay for these illegal and/or lack of exchange activities.  What happened to the taxpayers' freedom?</div> <bR> <div>      Economic columnist Howard Katz says:</div> <bR> <div>      The reason freedom is so important is that <I>it is a prerequisite</I> to any other value.  Without freedom... no other values are possible.  For men living as serfs under the control of a government bureaucrat there is simply no point to working for any value.  Why try to build a business when a government edict can destroy it at any time?  Why work for twenty years of your life to build something when a bureaucrat's mistake can wipe it out?<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >73</FONT></div> <bR> <div>      Again, why try to do better when there is no personal benefit?<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >74</FONT>  How can a person improve his life and that of those around him if he is not free?  <FONT SIZE="3" COLOR="#0099FF" FACE="Times New Roman" ><A HREF="http://www.taxhistory.org/Studies/charles_adams.htm" TARGET="_top" TITLE="http://www.taxhistory.org/Studies/charle"><U>Charles Adams</U></A></FONT> decries our present tax system and its impact on freedom:</div> <bR> <div>      "America is the freest country in the world."  That may have been true in times past, but it is not true today, not by a long shot...  And the reason?  Our income tax and our government's zeal to enforce it at all costs, including our liberty if it gets in the way.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >75</FONT></div> <bR> <div> The IRS employs gestapo tactics in auditing our tax returns and in collecting our money, including unlawful seizures and illegal entry.  James Payne says, "if they can't pay, the IRS moves to collect.  In the process, it (IRS) can destroy their lives, subjecting them to a modern form of debt bondage."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >76</FONT>  There have been many horror stories about the IRS collection tactics, people being kicked out their homes, committing suicide, etc.  Congressman George Hansen tells the story of a man who was killed as a result of a $39.65 IRS levy.  The man had asked for a hearing before the IRS was paid the $39.65 by the bank but the bank went ahead and paid the IRS and the whole issue escalated into a gunfight with the local sheriff and the man was shot in the head and died.<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >77</FONT>  The vampire got real blood in this case.  The freedom we brag about in the United States is tainted by such tactics.</div> <bR> <div>      We must reclaim our freedom and do so by changing the tax system.  That is how the United States was begun, by a tax revolt (Boston Tea Party).  We need not have a violent revolt, but we do need to change our present tax system.  Thanks to our Founding Fathers we can effect such a change by legal means.  Doing so will re-create this country into a strong nation once again.  Many economists, accountants, lawyers, congressmen, and tax advisors agree.  "When tax rates are lowered, the economy thrives..."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >78</FONT>  "An immediate effect of [a] new tax structure(s) will be to give a powerful boost to economic growth."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >79</FONT>  "To free Americans from the fear of frame-ups and arbitrary rulings; seizures of property; penalties; and interest would be the greatest act of emancipation since 1865."<FONT SIZE="1" COLOR="#000000" FACE="Times New Roman" >80</FONT></div> <bR> <div>      With a new tax structure we may find we can escape from the spell cast by the <I>beast</I> and no longer fear him.</div> <bR> <bR> <div> Copyright © 1995, 2000 by Tom Hill - All rights reserved.</div> </td> </tr></table></body>