Federal Income Taxes

April 16, 2015

April 16, 2015

Hello everybody out there in farm country. This radio commentary is brought to you by Monsanto, and John Deere. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.

And now for today’s commentary—

Once again – just in time – I paid my federal income taxes. Do we have a good tax system to finance our federal government? I don’t think so. Only 5% of the public say, “It’s working just fine.”

Our Tax Code is too big and complicated. In 1914, when we started collecting income tax, the Code was 400 pages. Today, it has ballooned to 74,000 pages. We are at the point now that even H&R Block can’t get it right. Don’t try to call the IRS for help. No one will answer. I don’t blame the I.R.S. I blame the politicians. Over the years, they have added all kinds of exemptions for their voters.

That’s a proven way to buy votes. And once a company or individual is given a special tax break, it’s next to impossible to take it away. Taxpayers are allowed to write off their interest payments on their home. That’s not a business expense. Many companies pay for employees’ health insurance. And it isn’t taxed. There are all kinds of complicated loopholes that big corporations can use to avoid taxes. All of the tax experts agree that if we eliminated enough loopholes, we could dramatically reduce the tax rates. To get taxpayers and companies to give up these goodies will be a hard sell.

It seems to be easier to raise the taxes on the rich. There has to be a limit there also. The top 1% of earners are already paying almost 50% of the taxes. The top 20% pay more than 80% of the taxes.

At least we have members of Congress acknowledging that something must be done. The problem has pushed some of our aspiring 2016 Presidential candidates to recommend changes. How about a flat tax? Everyone pays the same percentage. That could be as low as 15%. Or, maybe a national consumption tax – almost all developed nations raise some money through a national consumption tax.

Other developed nations get only about one-third of their revenue from federal income taxes. We need to do something. Tax filing reminds us how bad our Tax Code is. It’s impossible to understand it, and it corrupts our Congress. Give a little money here. Give a little tax break there. That’s how you get the votes.

If you would like to review my radio shows going back more than 20 years, just go on-line to www.johnblockreports.com. Have a great weekend.

Until next week, I am John Block from Washington, D.C