Freedom From Millionaires

Here's an idea to kick around: income limits.

Going forward, anyone running for political office cannot have earned more than $75,000 in a single year, and most of that money must have come from working a job (as opposed to gifts or investment income).  While in office, no one will make more than $75,000 a year.  If an individual makes a penny more in a year while in office, they will be removed from office the day it is proven, with no pension.  If someone has left office on good terms and is receiving a legitimate pension, that pension will cease if it is found that extra income had been gained while in office.

Because it would be unfair to force people to cancel what investments they may have when entering a political campaign and for the duration of their time in office, whatever investment income they might receive while in office would be deducted from their pay as an office holder.  Yearly income while in office, from whatever source derived, will never exceed $75,000.  Gifts in any form are strictly forbidden.

If we want to stop having our lives run by millionaires, we need to stop putting them in office.

And think about it: though it is not in writing, in practical terms we already have income limits in place, and those limits serve to exclude the commoners from ever becoming decision makers.  Political offices are filled with members of "the Club," and they only want to work with fellow members.  

If we want to continue having this country run by people who can only think and act like millionaires, whose primary interests are those of themselves and other millionaires, then the solution is easy - change nothing.

"Eliminate the Loopholes!"

I often recommend that everyone in the world read Barlett & Steele's "America: Who Really Pays the Taxes?"  You may be interested to know that the book is not anti-income tax - it is a non-partisan, very enlightening look at our current tax system.

It is a testament to the power of habit that even the authors, esteemed investigative journalists who grew up under this system and have known nothing else, missed a critical piece to the problems that plague the income tax.  The information contained in this important book helped me understand that it is a very naive position to talk of eliminating the loopholes in the income tax, the loopholes that allow the wealthiest Americans to avoid the tax altogether.  It is naive when you understand that the income tax system is ITSELF the loophole.

Read the book.

What We Need Around Here Is An Income Tax!

Check out this recent story on income inequality.  It's worth noting that a drastic rise in income inequality through America's Gilded Age is what stoked the push for the income tax over a hundred years ago.  This incredible plan to redistribute wealth was set up to affect only the richest 1% of the population - only they were to pay an income tax when it first went into effect in 1913, certainly not the average working man or woman.

The people who actually put this plan in place were the richest 1% (red flag?).  The people who believed that this plan would be some sort of equalizer were the 99% (surprise!).  Time for our hundred-year reality check:

In 2011 (I don't yet have numbers for 2012), over 100,000 of the wealthiest Americans dutifully filed their tax returns and paid zero income tax.

In 2012, I earned income at well below the poverty line.  I filed my return and had to pay over $400 in income tax or face fines, confiscation of property or rights to property, or imprisonment.

Equalizer my ass.

Tax Man Assumes, Makes An Ass Only Of Himself

I'm a bald eagle!  I pay my taxes!
Chirp, chirp!

So, I filed my 2012 federal income taxes, and I have to say I remain highly unimpressed with this system of taxation.  It makes some very broad assumptions and makes one particular judgment that I find to be hopelessly unfair and infuriating.

First, I will remind the reader that 2012 was my first year back from a deployment which took me away from my business for a year.  This was a year of rebuilding.  Fortunately, but unbeknownst to the Tax Man (not that I was hiding it), I was able to bring a large portion of what I made overseas home – a cushion to help make ends meet as I went about the task of rebuilding my piano tuning business.

As I filled out the forms for 2012, it was clear that the IRS was not interested in what I did or did not bring home from my deployment.  The IRS was not interested in the state of my business, whether it was steady over the last few years or being built up again after a year away.  None of those questions came up on the 1040, the SE, or the C-EZ.  The only thing they wanted to know about 2012 is how much money I made.

Technically, I file as a single individual.  For all practical purposes, I am also helping to support two children – materially, emotionally, developmentally.  Note that I included materially.  However, due to how things went down for me during the divorce, not having the benefit of a lawyer, I technically have to file as a single person.

I say this because for 2012, my total income fell below the poverty line for a single individual, and well below for a household of three which, again, for all practical purposes, is much closer to the reality based on how much time my kids spend with me.  At this point, what is left from the deployment, that cushion, will cover one month’s rent plus one month’s child support.  That’s all that is left.  What the Tax Man compelled me to fork over two days ago is a relatively small amount to most people.  However, relative to me and my situation, it wasn’t a small amount.  The assumption has been made that I didn’t need it.  But I did.  I do.

The IRS judges that the amount they squeezed from me is needed by the government.  Isn’t that what taxation is all about?  The government needs it.  And if they don’t get it, they can seize the working man's bank account and everything in it to settle the bill, and tack on interest and penalties to boot. But bless their bureaucratic hearts, over 100,000 individuals and families that made more than $250,000 last year will pay zero taxes on their income (if the figures from 2011 are any indication), and the IRS has judged that the tens or hundreds of millions of dollars that represents is somehow not needed.  Why?  Because an expensive CPA or tax attorney crossed some t's and dotted some i's, keeping tens of millions of dollars from the Tax Man’s grasp.  Oh, and those are the Tax Man’s own forms those guys are filling out, printed up in his own office.  It’s as if the Tax Man is telling these wealthy people, “Here, fill this out.  This form is for you.  I don’t even want your millions.  But Henning over there has something I need desperately, and count on me to threaten his property and even his rights to property to get it.  And if that low-life fails to report his paltry income, into the slammer he goes!  Bwah, ha, ha, haaaaaa!!”

Yes, the judgment I find so infuriating: the government needs the little it can get from me (money it assumes I don’t need) to the point that it will threaten my property and very freedom, but it doesn’t need the millions from those who, by the stroke of a pen, are let off the hook.

Some of you may have heard me interviewed recently on a friend's podcast about taxation, and you may have thought something along the lines of: Well, he just needs to be a better business man, or, He needs to do a better job finding those deductions for his business, or things to that effect.  I would just say that, as a working man trying to feed myself and my kids, which is perhaps my highest responsibility to society, I don’t need the arrogant and uninformed assumptions of bureaucrats and legislators as to what money I need or don’t need (especially money I've earned), and I don’t need to be judged by my fellow citizens as to my business acumen or the dexterity with which I handle a tax form.  I shouldn’t have to have an MBA or be a CPA to go out and earn my living.  I define success in business as not having to ask for handouts to support me and my kids, and in that light, I am successful.  I'm out there making it happen.  At least I was smart enough to know I’d need that cushion coming home from deployment, and smart enough to not blow it on a brand new car or think I can afford that two-bedroom now.  And I’m smart enough to have stopped using credit cards years ago.  Everything I buy is paid for right there and then; no looking back, no interest.  I’m a "credit" to myself – I don’t need some faceless banker’s approval as a measure of my success.  Want to measure something?  Measure this.  [crude gesture]

Save your platitudes on fairness.  This system was put in place by the rich, for the rich (see: history).  The better we understand this connection, the clearer it will become as to why the millions who are in my situation have to put up with this crap.  And all this crap goes away without a tax on our earned income: the assumptions, the judgments, the inquisition, the squeezing, and the threats of fines, confiscation of property, and prison being unceremoniously and unapologetically shackled to earning an honest living - a fundamental human right.  There is a better way.  I’m looking for it.  I am convinced that part of the answer lies in our past (obviously, pre-income tax), and part of it lies with the creativity of those in the present.  If I find it, I’ll let you know.  You might help by looking around yourself.

Keeping the Uppity In Their Place Since 1913

This man was torn from
his family and imprisoned
for trying to keep
the money he earned.

Actor Wesley Snipes has been released from prison, having served a three-year sentence for tax evasion.  There is no reason anyone should have to face such harsh punishments in connection with earning a living (no matter how much you make) unless the earning of that living violates the rights of other people.

For future reference, Mr. Snipes, if you want to avoid the income tax, take a page from the Louis B. Mayer tax avoidance playbook:

Section 329 of the Revenue Act of 1951 applied to one person in the country: Louis B. Mayer, head of Metro-Goldwyn-Mayer studios (MGM).  Mayer is never mentioned by name.  His lawyer, Ellsworth Alvord, simply described a unique situation of Mayer's, and anyone who could show that the description pertained to them would receive the benefits of Section 329.  Alvord had close connections with the Senate Finance Committee and used these connections to have Section 329 inserted into the Revenue Act of 1951, saving Mayer nearly $2 million in federal income tax.  (What would that amount to in today's money?)

I am connected. Hear me roar.

Bleeding Hearts and Patriots

This Onion article is funny, yet, as you read about the potential havoc that is about to be wreaked on this fictional young man by the IRS, I hope you will consider how very real and dark and unnecessary it all is.

A self-employed person.  Leave him alone
and let him earn his living.

Liberals, as much as you portray yourselves as caring about how people are treated - or left alone - by government, why the averted eye when it comes to how revenue is collected? The IRS and state revenue agencies have destroyed lives through the enforcement of the income tax, but that's okay, I guess.  Ever read about people owing tens of thousands in back taxes on the sales tax or any kind of consumption tax?  Ever?  Ever read about people having to pay late fees and interest on missed sales taxes?  Ever read of someone having their car or home or bank accounts seized to collect on consumption taxes from three years ago?  Ever hear of someone going to prison - having their family ripped apart - for sales tax evasion?  Nope.  And you likely never will.

Conservatives, did you know there is no valid connection between patriotism and the income tax?  Sure, a lot of companies like Liberty Tax use good ol' American icons in their logos and advertising, like bald eagles and the Flag and the Statue of Liberty and portraits of Ben Franklin, but does putting a picture and an idea together necessarily mean that those two things are connected?

9/11

If you suddenly find yourself wanting to throw Flipper into Guantanamo, well, let's just say you're not a very deep thinker.

So, I hope you enjoyed the Onion article, but I hope you will give the issue of taxing our earned income some thought beyond what you might be accustomed to.

They Don’t Want You To Feel What I Feel

The title of this post assumes that you are not self-employed and never have been.  The self-employed have felt what I’m feeling, but even some of them – most of them – have not.

For five years (’07 – ’11), I stopped filing my federal income taxes as an act of civil disobedience.  During that time, I wrote letters to the IRS and my state and federal representatives, including the President.  I wanted to know how a tax on my earned income does not reduce my fundamental right to work to a privilege.  No one could tell me it does not.

I have recently filed returns for all of those missed years and am now considered as being “in compliance” with the IRS.  The alternative, of course, is to be torn away from my children and thrown into prison.  Another way to look at that is my children having a parent taken from them.  The point being that my compliance is not based on a change of heart or perspective – it is based on being coerced; it is compulsory compliance.  You are in compliance for the same reason, though you don’t feel the coercion as I do because you’ve never tried to buck the system.

Now that I’m in “compliance,” I have a right pretty tax bill that has accumulated over those five years, and the IRS is wasting no time in using their draconian measures to squeeze the blood from this turnip.  But, as my previous post noted, I’m using some free legal aid to try to get into a non-collectible status (based on my current low income) to stop collection activities.  This process has required the attorney working on my case to ask a lot of questions pertaining to my personal and business affairs, and through this I have been made more keenly aware of how it felt having nothing to do with the income tax for those five years.  You need to know how it felt.

First, during those five years, I was conscious of feeling free, independent, and most interestingly, responsible.  You might think I'd have been feeling irresponsible, knowing that I was not obeying the law.  No, I never felt irresponsible in any way.  I felt a new and deep sense of being responsible for myself, my kids, my life – a sense of ownership.  Of course, I was also conscious of the fact that I was paying taxes every day as a consumer, renter, and user of utilities.  I felt like my own man, but not in the sense that those on the political left might assume: self-centered, isolated, aloof.  I felt like a man living and moving and freely participating in society; like a man who has something to offer society – my talents, my services, my abilities.  I felt proud and I walked tall, and I earned every penny I made.  I also received every penny I earned, and it felt right.

My pride and sense of freedom did not come from a feeling that I was “stickin’ it to the Man.”  Those feelings came from a noble and pure place, not from a place where I rise at the expense of someone or something else.  I never felt ugly, or wrong, or sneaky, or conniving, or low, or worthy of contempt.  I certainly never felt that I deserved to have my property seized or to be thrown into prison, not by a long shot.

Now that I’m back in the system, I’m being asked what the name of my bank is, asked to add up my income over the last three months and give the average.  What’s the make/model/year of your car, and is it paid off?  When was it paid off?  What's the mileage?  We need documentation of your court-ordered child support.  Do you have any other bank accounts?  Savings?  What percentage of your phone usage is personal and business?  Any other sources of income?  And on and on...

Now I feel like I’ve moved back in with my parents.  I don’t feel independent; I don’t feel trusted.  I find myself wondering (literally) if I’ll have to justify eating lunch at a restaurant instead of going home and fixing a PB& J because it’s cheaper.  As the attorney gathers information, I find myself hoping I am struggling “enough” for the IRS to leave me alone.  And if that isn’t the definition of the American Dream, I don’t know what is.

I don’t feel like a man; I feel small, like a kid.  I feel watched; I feel like someone who must justify his existence to a bureaucratic machine, like when I had to beg for the use of my own money when they seized everything in my bank account in October, money I earned and that I was using to live on.  I feel this sick need to point out to them that I don’t have cable and I’m not a member of my local public radio station because they want me to give my money to them, right?  Aren’t you proud of me?  Am I pleasing to the Great and Powerful Internal Revenue Service?

I feel used, like a much-squeezed teat being milked by cold bureaucratic hands.  The paying of income tax does not conjure up in my mind anything like Patriotic Duty or Good Citizen any more than looking at the obedience and cooperative behavior of concentration camp prisoners makes me suspect that they must have been good Nazis.  No “good” behavior that is coerced is anything to brag about.  Let’s drop the pretensions about “dutifully” paying our taxes this April.  You do it so they can’t flush your life down the toilet.  What’s noble about that?  How does that earn you the title of Good Citizen?  Connecting the payment of income taxes to patriotism or good citizenship is laughable.  You’re just obedient – that’s all you are.  That's all we are.

I have done what relatively few Americans have done.  I have lived in mindless, unquestioning obedience to income taxation.  I have been burned by it as only the self-employed can be.  I have stepped back and questioned its existence.  I have researched its beginnings and its transformation into what it has become.  I have disagreed with its premise and reason for being.  I deliberately stopped filing and paying for a number of years in protest, and sought to have an open discussion with relevant government officials regarding it.  Faced with its ultimate punishments, I have felt compelled to capitulate and come back into compliance, but only technically, not in my heart.  I know what it feels like to live outside of the income tax, and it feels right.  That’s probably the best word I can use: right.

But you don’t know how it feels, because you’ve never been there.  And, unless we change the laws, you probably never will.  And that makes me feel sorry for you as I’d feel sorry for anyone who’s never walked on a quiet mountain trail.  You can’t know what you’re missing if you’ve never been there.

This is how the income tax system is set up, to prevent as many as possible from feeling what I’ve felt.  Gross income, net income, take a little out with every paycheck.  It’s all you know.  It’s normal.  It’s necessary.  It’s fair.

It’s no big deal.  Yes, just stay right there.  It’s no big deal.