Now everyone works for the government

According to Ronald Reagan, the American taxpayer is someone who works for the federal government without having to pass the civil service examination. That is truer today than in Reagan’s day. While the number of Americans on the federal payroll has dramatically increased, so has the number of us who work for the federal government without being on a federal agency payroll. Back in 1910, when Tax Freedom Day was first observed, taxes were just five percent of a person’s income, and Tax Freedom Day came on Jan. 19. Now we pay more than 26 percent of our income to the government, and we work until April 9 (three months later) just to pay our taxes every year. Those who call this “progress” need to pay attention to H.L. Mencken, who once noted, we now pay out twice as much in taxes as we used to get in wages. I don’t think anybody since Mencken has had the nerve to calculate that ratio.

Sadly, the news gets worse. When deficit interest rate payments are added to the tax bill, the Tax Freedom Day extends to May 17. Plus, some economists are saying that the nation’s economy has undergone a “structural” change, rather than a temporary collapse that can be readily reversed. Instead of a positive forecast, those economists are arguing that a rebound will take years and, in the meantime, people’s assets are worth less than before. More housing foreclosures will push the housing market into further decline; at the same time budget deficits, oil prices and health care costs will continue to go up. Amazingly, some on Capitol Hill believe that the way to reverse the so-called “structural change” is to pass another taxpayer-funded bailout for Wall Street banks. Again, the public would be propping up failing or failed banks, complete with billions of taxpayer dollars and federal oversight of even more institutions.

We learned recently of an Internal Revenue Service (IRS) proposal where “high wealth” individuals would be targeted for special tax enforcement programs to ensure that “everyone pays what they owe.” This shift of emphasis would aim at unmasking “aggressive tax strategies” of overseas enterprises so that they are “appropriately taxed.” This means that sophisticated business investments with complicated legal structures and tax consequences would be investigated at public expense in order to “assess” whether such arrangements “risk” tax compliance and the integrity of our tax system. In other words, big brother and the tax collector are joining forces to check out everybody who makes money to make sure they are paying enough taxes. Ironically, the rich are already paying more than half of all individual taxes, and the new laws are designed to “squeeze” from them “an extra $1.2 trillion over 10 years.”