Taxes and the economy

I took a stab at our taxes the other day. For reasons not worth going into, doing our taxes is a little complicated. That’s in addition to the normal, everyday, absurd complexity of the US tax code mind you. Nothing illegal, just a lot of numbers to crunch.

Now, I know that doing taxes is never an enjoyable experience, but I found this year’s effort particularly infuriating. That sounds weak. I’m infuriated by a lot of things, customer service agents, the tone deaf idiots on American Idol, excessive elementary school testing…. But taxes anger me in ways that other otherwise ridiculous things don’t.

It’s not the cold, detached anger that I feel when I see an economic fallacy repeated as basic fact, and it’s not even the hot anger over a public policy that results in widespread poverty. It’s a different kind of anger. Doing my taxes generates the same kind of anger that I’d feel if I watched someone punch my mother.

I’m not roused to anger because the amount I have to pay is exorbitant and extortionist (it is), or because what I pay for is so absurd and pointless (that’s true too), but because I am so clearly targeted for excessive taxation. The government has decided that I, and others like me, should pay more than other people who make more than I do. In other words, the United States government has determined that my family must suffer a disproportionate burden of the collective load.

I’m not complaining here about “progressive” taxation (although that’s awful too), I’m complaining about outright discrimination. We don’t pay more because we’re rich, we pay more for two absurd reasons:

1) We’re married.
This is my first year doing taxes as a married man. It’s truly disgusting. By my calculations, we’ll pay at least 10% more (in federal taxes alone) than we would if we were able to file separately. That’s just absurd. Why the status of my marriage should make an ounce of difference to the government is beyond me. The penalty shows up in a number of places (child tax credits, deductions, etc…) and the cumulative effect is huge. We don’t wallow in excess cash and the added 10% that we’ll need to fork over to the feds will cost us dearly. This is becoming a popular issue, but I think it bears repeating that Bill Clinton vetoed a bill that would have ended this disgrace.

2) We don’t own a house.
That’s right. We rent. We don’t own because we can’t afford to buy. The fact that we rent means that we don’t benefit from the interest deduction available to homeowners. If our rent were a mortgage, we’d pay 20% less tax. I don’t want to hear about property taxes–we pay those too, in the form of higher rents. We have less capital, less money, and less wealth and yet we pay more.

And I see politicians (Clinton, Obama, McCain) pandering to rank populist sentiments and calling for a federal bailout of the sub-prime crisis. A policy that would raise my taxes to subsidize people who own houses they can’t afford. (but still enjoy the tax breaks that come with home ownership, of course.) To add insult to injury, a bailout will mean an increased tax burden, which would make it harder and harder for us to save for the increased down payment and higher rates that a bailout would inevitably induce.

Now, I’m not envious. I don’t want anyone else’s taxes raised, I just want a system that’s fair. When I look at the numbers and realize that as a married renter I’m paying 30% more tax than I otherwise would, I get angry. I don’t want to be penalized for getting married and I don’t think the government should be in the business of making it more difficult for people to become home-owners. I’m not jealous, I’m just angry…. Very, very angry.

Can someone explain to me why a flat tax is unworkable?


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s