Taxes

Taxing everything

Problem: Everything in life is either taxed or regulated, which makes life more difficult and takes away our precious time.

Can you come up with a more complicated tax system than what we have in this country? For god sake, what are there, 70,000 pages of federal tax code at this time? Can you imagine a book with 70,000 pages? I can barely get through a book of 200 pages. Is it even possible to be in compliance 100%? Can you really tell me that the IRS couldn’t find something in those 70,000 pages to put you in violation if they wanted to? This makes a criminal out of just about every middle class citizen. Why do we need all of this nonsense anyway? Why does Oregon’s tax system mimic this mess? Why won’t the politicians come up with something simpler? Ohhhh…$$. A different tax system wouldn’t let politicians give special deals to their buddies. Shoulda known it. Our tax system makes the rich richer and the poor poorer.

 

A day in the life of Antoine Sly…

 

My alarm clock goes off at 7 am and wakes me up. I snooze it a few times because my bed is way too comfortable. Finally, I look at the clock all irritated and think to myself…”Hey, it’s 7am for a reason. Why isn’t it 8am? Because the government say’s it’s 7am. Hmmmm…” I think as I yawn and roll out of bed. “I wonder what else the government controls in my life?” I turn on the light, the lightbulb is the one the government lets me use, and the electricity is taxed and regulated. As I put my hand on the bed to help my fat ass stand up, I feel that annoying tag on my pillow that says, “if you remove this tag, you’re going to spend the rest of your life in jail” and I remember there’s a tag like that on my mattress. The government controls my bed and pillow. Not a good start to the day.

Man…sure gotta piss. Head to the toilet, lift the seat and think, “If my wife really loved me, she’d leave that dang thing up when she’s done.” Flush. The government tells me how much water I can flush and they tax that flush.

Brushing my teeth and realize the toothpaste is approved by the government. Chlorine in the water comes from the government. The little ladies makeup is on the counter only because the government allows it. My shampoo, conditioner and soap are all government approved and that shower water was taxed. Shower head and drainage for the shower…government approved. I’m surprised my piss wasn’t regulated or taxed. I’m sure someday it will be.

Moving through the house, I realize pretty much everything about my house is regulated by the government. If I want to add an outdoor kitchen, I need to get the government’s permission. If I want to remove a tree from my yard, I have to ask my government masters first. Well that sucks. I pay property tax every year, and as I look at my tax statement, I see I also get to pay extra for bonds and other crap. Funny, when the value of my house went to shit, my property tax went up. Hmmmmm. Isn’t it based on the value of the property? Guess not.

I start to make breakfast and turn on the TV for some morning news. The TV is regulated and the TV show is regulated. The batteries in my remote are regulated. Swallow a blood pressure pill, and some vitamins…all regulated by the government. All the food in my entire kitchen is regulated, including the herbs my wife grows. Speaking of which, I can’t collect rain water because the government owns the rain. Really? Really. Oh, and speaking of my wife, she’s taxed and regulated. You know, marriage license and fee.

Geez…fine way to start the day. Let’s head to work. Maybe things will get better.

Open the car door. The car is regulated from bumper to bumper, tires and all. Every couple years I pay registration…a tax. I pet Fido before closing the car door…there’s a tax on my dog. Close the door, start the engine, which of course takes gas…taxed and regulated. Turn on the radio, what I hear is regulated by the government. The news says a cop shot someone. Guns are regulated, ammo is regulated, and cops get paid vacation when they kill a person. He’ll probably get his gun back and be back on the beat in no time. I shouldn’t use words like “the beat”.

I pull out of the garage and into the street…an onslaught of regulations!! Holy shit! Where I can drive, when I can drive, how I can drive. Everything I see on the side of the road…billboards, signs, businesses, schools, bikes, people walking, people crossing the road, people talking on the phone in the car next to me, the baby seat in that lady’s car. Better get off the road quick before I go mad thinking about all the taxes and regulations I’m seeing and hearing.

I park the car and make a quick stop at Starbucks for a coffee. A $5 coffee. Yeah, it’s good. I wonder what went into that coffee to make it so good? Forget that, why is it so damn expensive?! Well, rent for the building. The cost of the equipment. The cost of coffee beans and the sugary goodness they put in. The cost of the cup, and the printing on the cup. Oh yeah, the cost of the design of the printing on the cup. Electricity to keep the lights on and the machines working. The cost to get the goods from the producer to the store. The cost of the barista’s hourly wage, their health insurance, their unemployment tax, matching their social security, TriMet tax, Workers’ Benefit Fund, their vacation, their maternity leave if they have a baby, their training, and their uniform. Oh…let’s not forget, the federal and state income tax Starbucks pays. The tax on the equipment. The extra $$ they pay to meet regulations (some of which are BS). Whew…that’s a lot and I’m sure there’s more. I used to think Starbucks paid for all of that stuff…but now that I think about it…I’m the one paying. And if Starbucks expenses go up, I pay for that through an increase in the price of my Super extra di grande a basso contenuto di grassi cremoso gelato vanigliato moca con panna montata e gocce di cioccolato. Decaf.

I get to work, sit down at my desk, and see my paycheck stub sitting there. I don’t usually pay much attention to it, but since taxes are on the brain today, let’s check it out. Federal income tax, state income tax, FICA (social security), Medicare. Curious, how much does the average person pay in taxes? Everything included. A quick Google search on the Internet which is regulated…about 50% of income is ultimately taxed. Wow. So that means, when I work for eight hours, four of those hours are for paying taxes. The first six months of the year, I’m working for the government. That’s screwed. What exactly do I get when the government takes half of the $$ I work hard for?

I work four hours and breath a sigh of relief…my daily duty to pay my share of the tax burden is done. Squeeze in a quick phone call to the doctor and dentist to make my regular appointments. The doc and dentist are both heavily regulated. Everyone knows that. Oh, I’m talking on my cell phone…regulated and taxed. The next four hours are all for me. Four more go by and I’m outta here. What a relief.

Gonna hit the bar for a quick drink on the way home. “I’ll take a nice cold one!” Beer and alcohol are taxed and regulated. Step outside for a smoke, taxed and regulated. Gamble a bit while I’m here…taxed and regulated.

I’m talking to a guy (turned out he’s a tax accountant) at the bar about taxes. He brings up a good point. Even though Oregon doesn’t have a sales tax, doesn’t mean we don’t pay one. Every tax paid by a business is passed on to us. Damn!! He’s so right!! He rattles off some: Personal property tax for business, excise tax, corporate income tax, unemployment insurance tax, your companies share of social security, TriMet tax, Workers’ Benefit Fund, weight-mile tax, hazardous substance fee, petroleum load fee, transient lodging tax, timber tax, business licensing, health department permitting, permitting for just about any professional business, privilege tax, and Multnomah County Business Income Tax. He says there’s probably more he missed. I ponder that while finishing up my beer. Those taxes are built into every single product and service I pay for. If they weren’t there I’d be paying a lot less.

I better get going. I’ve had one beer so the government probably thinks I’m drunk already. Driving home, I hear on the radio, “the cost of living rose by 6% this year”. Hey wait a minute, I got a 2% pay raise. That doesn’t sound too good. Maybe it wasn’t actually a raise?

I finally get home, exhausted from a day of way too much thinking. I sit down with my wife and we talk about our days. She’s not too happy to hear that just about every single thing in our lives is either taxed or regulated. She, like me had no idea. Time, air, love, death, food, drink, movement, education, my $$, what I buy, what I sell, what we see, what we hear, where we can go, what we can do. Time for bed.

 

Life isn’t easy when you’re in the middle class. We have to constantly be watching and figuring things out because if we don’t, we won’t be able to pay our bills. Taxes are a heavy burden on us, and we don’t really realize it. But taxes are only part of the problem. As the price of energy (gas, electricity, etc.) goes up, so do the prices of pretty much everything. Now it costs more for the farmer to grow food, for that food to be processed, and transported to the store. So…not only does it cost more for you to drive your car when the price of gas goes up, but it also costs you more to eat and feed your family. This happens when the price of anything goes up. The increase eventually is paid by the middle class. The ruling class don’t care because they can afford it. The middle class can’t, so they have to work harder and longer just to get by. The family suffers, and it’s a very serious deal.

Why is it that taxes are so complicated? Those 70,000 pages of federal tax law protect the rich, and hurt the middle class (Yes, I know, that’s not how you thought it worked. Taxes are suppose to hurt the rich and help the poor. That simply is not how it works). The state spends millions upon millions of your hard earned $$ administering all the different taxes we have, then they spend millions upon millions of your hard earned $$ chasing after the people who don’t pay the taxes. This is $$ that is wasted by the state and it doesn’t have to be, but of course, the ruling class like it so they won’t get rid of it.

Wouldn’t it be better if there was just one page of tax law that took virtually NO state resources (aka, your hard earned $$) to administer, and it was fair to everyone? Call me Crazy, but I don’t want the state wasting my hard earned $$ when it could be used for something that’s actually helpful to the middle class, rather than a costly pain in the ass. I’d like to pay taxes only when I choose to pay them. I’d like it even more if I didn’t have to pay taxes at all. Yeah, I must be Crazy to think something stupid like that.

There are ideas floating around for a replacement for the income tax. You may have heard talk about a “flat tax”. This is where everyone is taxed at the same rate and no deductions are allowed. No more 70,000 pages of deductions for the ruling class. The idea is to simplify the tax system to the point that it can be filed on a 3×5 card. Of course, there are some issues with this system. If you’re interested, you should look it up and see what you think of this plan. The main problem I find is it’s not voluntary. The government still takes your $$, and if they want, they’ll throw you in jail for not paying. Also, the rich ruling class can still pass their tax down to us in the middle class.

Another alternative is the “Fair Tax”. This is basically a sales tax. With this system the federal government places a tax on goods and services. To offset the cost of necessities (medicine, food, clothing, etc.), the government sends every single citizen (or household) a check every month. This is an interesting idea and you should look it up. But of course, I see problems with it.

 

Solution: Eliminate every single tax and fee in Oregon, and replace them with one consumption tax called the “Flux Tax”. A tax that fluctuates based on how much $$ is required for the government to provide services Oregonians decide are needed, and wanted.

As you read this next part, keep in mind, the Governor doesn’t have the power to change the tax code. It would take an act of the State Congress. I, as Governor, could create the legislation and it would be up to you to help pass it, if you even want it. I have no desire to force you into something you don’t want. My goal is to minimize taxes, yet be able to fund every single government program the people want; have an easy tax system that everyone understands and everyone is subject to (including criminals and drug dealers); create incentives to stop wasting $$; and benefit the middle class, not politicians, special interest groups, or the ruling class. I call it the “Flux Tax”(N) and here’s how it works…notice, there aren’t 70,000 pages.

The first part of this plan is to eliminate government waste, as we talked about in the previous chapter. Every dollar wasted is a dollar that could be spent on something Oregonians need, or it can go back in your pocket. Once waste is eliminated, our government will cost less so less revenue will be required.

The next part of this plan is getting rid of every single existing tax and fee in the state. No more income tax, property tax, car registration fee, gas tax. Every Oregonian would be able to fish with their driver license, no extra charge. In fact, there would be no charge for a driver license. No more paying to park on the mountain or to visit a state park. All taxes and fees, state and local, would be replaced with one, simple tax called the “Flux Tax”.

The “Flux Tax” is a sales tax (I know, Oregonians don’t like even hearing those words, but think about it, NO OTHER taxes or fees!). Something very important that you need to understand…this sales tax is applied ONLY to NEW items and services. New houses, new cars, new furniture, etc. would be taxed. A used house, car, or anything purchased from Goodwill or Craigslist would NOT be taxed. Under the Flux Tax, things that are necessary to sustain life are not taxed. Gas, food, medicine, energy, water, health care, etc., will not be taxed. Listen to this next statement very carefully…these things make the Flux Tax a voluntary tax! If you don’t want to pay it, you don’t have to!!

Now, you might be of the mindset that the rich should pay more taxes than the middle class. Well, the Flux Tax makes that happen. Rich people aren’t going shopping at Goodwill, and they spend much more $$ on EVERYTHING…and it’s all new stuff. This won’t stop under the Flux Tax and the rich ruling class will pay. On the other hand, those who don’t make much $$ can be more thrifty and be taxed very little, or none. This especially helps low and middle income families, who our current tax system screws. Imagine…lower gas prices, no tax on smokes or alcohol (you may not agree with smoking or drinking, but we know that low income people (in general) like to smoke and drink, and they are the ones who really can’t afford the outrageous tax placed upon them), no hidden tax on your house rent, no more paying DEQ or DMV, no paying to take your kids to the park or fishing.

“Why do you call it a Flux Tax?” Great question! “Flux” means the tax will fluctuate based on a number of different factors that are determined by the people’s representatives, the state legislature. NOT the Governor (hopefully me). The Legislature meets every other year and hashes out a budget. The budget will represent the wants and needs of Oregonians. Every single Oregonian will have some skin in the game since everyone sees their $$ go to the government when they buy something new, as opposed to their $$ being taken from them behind their back, like it is now. Once the budget is agreed upon, some super smart guys get together and figure out how much of a tax will need to be in place to meet the budget. The goal is to keep the amount of income from the Flux Tax as close as possible to the actual amount of $$ needed (this could include establishing a rainy day fund) to run the state, county, and city governments.

This is where we see the tax fluctuate. Every quarter (or six months, or year, whatever the people want) the super smart guys get together and take a look at the situation as it is at that point. If the tax brought in more $$ than the state needs, the tax is lowered for the next quarter. If the tax brought in less than expected, the tax is increased. Other things will be taken into consideration such as more $$ expected to be spent by consumers in the fourth quarter, and less in the first quarter. This means the tax should go down as the population increases and/or more $$ is spent in Oregon.

“You idiot! You’re going to devastate the businesses at our borders that rely on people from other states shopping there!” Pull your head out of the party butt and think about it for a second. How about we exclude people from border states from paying the tax at the border towns? Pretty simple, huh?

So, part of the appeal of this tax is it’s simplicity. It will eliminate many, many government agencies whose purpose was to create new taxes, collect taxes or oversee taxing you for pretty much everything you do or buy. This is going to save a lot of $$. Another benefit is those who dodge the income tax (criminals and the ruling class (possibly one in the same)) will not be able to dodge taxes anymore. Another great benefit of this tax is everyone will have a stake in the system. We’ll all need to come together through our representatives and figure out our wants versus our needs, then decide how much we’re willing to pay for them. This will really streamline spending by our government. And of course…if you don’t want to pay taxes, you don’t have to!

VERY IMPORTANT: When you consider this idea, think about how it will work in the production, distribution, and sales of products. Since companies would be paying no taxes or fees, the cost of production and distribution is WAY less, and the price of goods and services will drop for the consumer. This price drop will offset the tax Oregonians are paying for the item. So…the price of a house goes down because there are no longer taxes or fees placed on the builder, then the tax is added and the price goes back up. Effectively, the price stays about the same, while at the same time, your income is not taxed, your property is not taxed, you don’t pay tax for your rental house or apartment, etc. Bottom line…the people of Oregon win, which is the way it should be.

“But…why would those rich bastard companies lower their prices when they can just no longer pay taxes and keep their prices high?” Very good question. I like to think that the market always adjusts to different circumstances. People and businesses will not want to do business with other people and businesses who are gaming the system, and those doing the gaming will be forced out, or will comply with market demands. If that’s not good enough of an answer for you, then let’s get Crazy and figure something out. The other alternative is to leave things the way they are now, continue to waste your hard earned $$, and continue to hurt the middle class. I think we’d be better off getting some Crazy people together to find a solution…if the market solution doesn’t work, which I think it will.

“Well, how will our cities operate with no property tax?!!” Not a tough solution. Each city gets a stipend from the state based on population and some other factors. The amount will increase (or decrease) every year based on a number of different factors. These factors will be applied equally to every city, no special favors or rules will be allowed. The money each city receives can be spent however they see fit. If they want more money, they’ll have to get Crazy creative…it can be done.

One more important thing about this tax plan…it’ll create jobs and better pay. More businesses will make their home in Oregon, and the ones that are already here will have more $$ to spend on payroll.

This tax plan only applies to Oregon, not the federal government. I don’t think it would work at the federal level. But that doesn’t mean there’s not a better way for the federal government to take our $$ so they can waste it. Here’s a simple solution that would work and would be fair to everyone. Tax the states. That’s right…send out 50 tax bills every month (or every quarter, year, or whatever) and collect 50 checks. “Well that won’t work because blah, blah blah.” Whatever. If I were to tell you back in 1913 that we’re going to implement an income tax system with 70,000 pages and tax advantages for rich people and corporations, you’d crap your pants. Think about it. Let’s get Crazy and make some changes that benefit the middle class rather than the ruling class.