April 21, 2011
We're already all wet
Now that I'm thinking about taxes, an additional rant. As I pointed out last time, I didn't have to pay any income taxes this year, and in times past have even qualified for the Earned Income Tax credit. So I definitely qualify as "non-rich." But I'm against "soaking" them.
The problem with soaking the rich is two-fold: 1) If a bunch of rich people hit a rough patch and start making half as much, or decide to take their income in capital gains, they'll still be rich, but the government will be broke; 2) "No taxation without representation" isn't just a snappy slogan, it's a law of human nature. It starts in childhood. Weasel a couple of bucks out of your parents and they're going to want to what you're going to do with it. We all expect a quid pro quo.
The more the government takes from corporations and the wealthy, the more they are going to want to know what's happening to their money, the more they're going to care about where it goes and how much, and the bigger the payoff for corrupting the process. The fiduciary responsibility of a corporation is to its shareholders, and it'd be irresponsible of them to not spend a few million on lobbyists and tax lawyers to make sure tens of millions more flow to their investors.
The answer is simplicity and transparency. Eliminate all forms of corporate welfare, farm subsidies, green energy subsidies, the whole lot. In turn, eliminate the corporate income tax and treat capital gains as ordinary income. Reduce all deductions to a single, individual deduction that is the same for everybody. I see no reason why home buyers should be privileged over renters, especially after they ruined the world economy. Oh, and get rid of Fannie and Freddie too.