Tax Tea-baggers Missing The Point
Wednesday - April 22, 2009
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I can’t handle much more tax or fees on my income, even with my minimalistic family budget. But I didn’t join that “Tea Party” last week on federal income tax day.
It was a play on the Boston Tea Party of 1773, but a major stretch. The colonists said only their local representatives to the Crown should levy a tax on imported tea. We do have taxation with representation. The people we elect are taxing us. We’re taxing us.
Some people can suffer increased taxation better than others. Income tax is progressive: The richer you are, the more you pay. Our excise tax is regressive. The poorest person here paid the same tax on a loaf of bread as our richest resident, Barbara Cox Anthony, did when she was alive and had $12 billion.
Taxation is a necessity to pay for governance, but those of us who are not state or county workers have reason to question if our tax should be giving them 21 days paid annual vacation after one year on the job.
But too much tax kills our incentive to produce the things that create our tax base. It’s sure killing me!
I have an IRA, but my withdrawals get taxed by the state and the feds. My wife’s salary, my MidWeek salary and our two Social Security checks (all taxed) keep our cash flow balanced. Mortgage, car expenses, utilities, property insurance, house upkeep, long-term care insurance, food - we don’t save anything. Why? Well, the state and the feds tax it, and I also pay the 4.5 percent Oahu excise tax as a non-employee columnist.
I suspect we’re better off than a large percentage of the people in Hawaii because of our fall-back IRA/401k stashes (now greatly degraded by the market collapse.) A lot of people are in a really bad way.
I think we agree that government got too bloated, and so did the state and county worker payrolls. Arbitration always gave more. Now we read that the city will pay huge salaries for train transit executives. Why aren’t we recruiting a nonprofit like TheBus? We’ll be subsidizing the thing anyway. I’m freshly uncomfortable. You, too?
Gov. Linda Lingle probably is on solid ground saying no new taxes but shaky ground by announcing that and no layoffs while the law-makers’ budget was still forming. She should have left everything on the table. But I think she’s grooming her record for a 2012 Senate run.
I’ve long promoted progressive flat-taxation as a fixall. End the deductions and special tax credits that fly all over the landscape. Have a percentage of tax that escalates as your gross income from all sources escalates. Dump all those ways not to count income, and the Hawaii capital gains tax system that favors the most rich.
I’d prefer a state sales tax that excludes food and medicine. Right now, our tax-ontax excise system can mount up to 12 percent by the time the consumer takes the item home. So an 8 or 9 percent sales tax would mainly hit those who buy big-ticket items while sparing the poor. Or use a Value Added Tax (VAT) on some transactions, as many countries do.
We really need to end all the special tax laws for this business and that (banks and insurance companies and tech start-ups or movie-makers). We need a level playing field that ordinary people can respect.
Why am I paying 4.5 percent excise tax for writing this column? I already pay state income tax on it. What’s the point? If I went into near poverty tomorrow, the state would still demand its 4.5 percent. There’s no break on the excise tax for being poor.
Clip this, and ask those smiley-face candidates for governor, mayor and the Legislature about it when they knock on your door next year.
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