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Tuesday, August 9, 2011

Tax code and behavioral modification - Editorial

The tax code was originally intended to fund government, but has morphed into a behavioral modification program. Taxation is routinely used to target certain activities, either to discourage an activity (tobacco taxes, for example), or to encourage it (like the home mortgage deduction). Not content with simply funding government, our legislators think they know how we ought to live, and they reward or punish us based on our conformity with their values.

One way they do this it to fund certain programs or benefits with taxes that are earmarked for that specific purpose. These include campsite fees, gas taxes, tolls, car licenses, Social Security, etc. The stated intent is to make the users of a service pay for it. But I’m sure you know that the real reason government does this is to create new revenue streams while simultaneously leaving the existing revenue structure open for continued manipulation.

This is why the city of Bozeman can keep increasing water and sewer taxes while simultaneously justifying impact fees by saying they keep service costs lower for existing property owners. This makes perfect sense if you love the power government has over the people. As a bonus you get to pretend to help them as you suck money out of their pockets. Diabolical brilliance.

I have this picture of our government officials gathering around a table in the dead of night to invent new ways of prying money out of our hands. They rub their hands together and cackle at their cleverness as they create new burdens for us. “Woohoo, I have an idea. How about if we pass a law that requires everyone to pay a tax on plastic grocery bags?” “Hahahahaha, that’s good, but what about this: Why don’t we make it illegal to smoke in places where people like to come and smoke?” Snorf, chortle, guffaw.

Each new tax, every one a “worthy” cause with compassionate intent, piles on until we taxpayers reel under the burden. Under the guise of improving our lives (at least, improving it according to their priorities), government makes it harder for people to live them. And more expensive.

But the fact is, we just cannot afford this anymore. Government has been riding the crest of prosperity funded by debt, and the carnival is ending. The false prosperity of the Bush years, buoyed by gargantuan spending programs guided by a philosophy of government economic intervention that is traceable back to the New Deal, has led to this latest financial crisis. Ironically, Bush III (Obama) has been content to make no change in the Bush II approach, deepening the financial devastation.

I was guardedly optimistic that the TEA party influence would reverse the tide. I applauded as they stood firm as one bad deal after another paraded by. However, there are just not enough of them to make an impact. And unfortunately, so many caved. All told, 59 freshmen voted for the debt bill and 28 voted against it. Only a few short months and the TEA partiers are now part of the problem.

We watched an elaborate dance with much posturing and bellowing. Boehner wobbled like a tower made of jello, and the Democrats, having no plan on the table, became the party of no. But once again, in the dead of night I’m sure, they cut a sweetheart deal that benefits only government. And yet again, we will pay. Dearly. This deal will add $12 trillion to the national debt over the next ten years. It raised the debt ceiling. There are no cuts, it only lowered rate of increase. Slightly.

Unfortunately, there are still so many of us still cling to this failed system. It’s like trying to squeeze just a little more toothpaste from the empty tube. But it’s time to face the truth. From the City of Bozeman to the feds in D.C., the clever manipulations of government have yielded no answers. We are out of money. It’s time to face reality.

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