phynedyning

A taxing unfairness

In Editorial on May 17, 2011 at 10:47 am

In January, 1995, The wife of the Communist governor of the Guizhou Province was executed for embezzling hundreds of thousands of dollars in public funds to build a restaurant, massage parlor and spa that catered to the handful of rich people that lived in Guizhou.

“We’re trying to teach our children (aged 4 and 6) about the mitzvah of tzedakah.  They each get $10 per week allowance and we ask them to put half of that amount in the tzedakah boxes we gave them.  Every month or so, we empty the boxes and take the kids to the store to buy food or toiletries to donate to local shelters.”

 

Some young parents told that to a group of us as we nibbled our way through an oneg at the Temple.  The parents said they knew about the “twenty percent rule”, but doubted the kids would become impoverished themselves by giving away half of their unearned income.  “Besides” they said “five bucks per week is still a lot of money to kids that age.”

The children are giving fifty percent of their gross “earnings” to charity.  Once they start paying taxes, they may wonder about the lesson their parents taught them.

The Phyne Dyner admits to being (and is proud to be) politically libertarian.  Taxation is not a large plank in the libertarian platform.

The political lemmings who dutifully follow the two major parties quickly point out the “necessity” of taxes to fund roads, hospitals, police, and fire protection.

I rebut that I agree that those things are nice to have and I have little (virtually no) objection to taxation for such purposes.  However, I deeply resent when the perpetual parasites (professional politicians) trot out those services as a ruse for more and higher taxes and fees…

…and then urinate the resulting loot away or allow others to skim from it.

And then pass it back to the parasites in the form of political donations.

A la CIETC, the Iowa Association of School Boards, and the emerging news of the disappearance of millions of dollars into the latest financial black hole known as the Iowa Foundation for Medical Care.

The pilfered or misspent monies will never be recovered.  Even low-level thugs are rarely held accountable and required to return the stolen loot.

A local mook defrauded Medicaid in increments of over $1000 by, for example, taking poor kids on one outing to the movies.

He was apprehended, convicted, and will be “forced” to return only $15,000 of the $150,000 he stole.

One good may come of the current recession/depression…embezzlers and financial chicanery are turning up like earthworms on the sidewalk after a spring shower.

I wonder if the small-time Medicaid crook would have engaged in the same theft of public money in the People’s Republic of China.

The Chinese take a dim view of the misuse of public funds.  They execute people they find with their grubby little hands in the public cookie jar…and send the crook’s family a bill for the 7.62×39 AK round used to execute them.

Tough love, Chinese style.

Still, I am not on a tirade about misuse and abuse of public money.  The subject is “taxes” and “charity”.

A lot of religious organizations enjoy tax-exempt status.   Presumably, these businesses are exempt from taxes because of the social benefits society reaps from the mere presence of a church, mosque, or synagogue.

Last year, despite the economy, the Phyne Dyner had a “good” year.  My scrawlings brought in some shekels, proving readers are not as discerning as many publishers claim.

Consequently, charity profited because I profited.

Now, I want to make it abundantly clear that I do not pen out some blather and then sit back and wait for the mailman to deliver huge royalty checks.  Figuring my earnings as hourly wages, I earn a single digit percentage of the minimum wage.

As do most small business owners and hands-on entrepreneurs.

But, because my entrepreneurship failed to generate a large amount of “deductions”, my charity did not matter to the feds or the state.  That, despite my charitable giving was at a significant percentage of my gross receipts.

It appears, because I am not Bill Gates or Rupert Murdock, my money is not as dear to me as theirs…or that of a church.

Here is where I get riled.

As a deduction, charitable giving merely reduces one’s tax obligation by the percentage amount of his/her tax bracket.  One does not get a quid pro quo dollar value as a tax credit for personal charity.  One merely gets a percentage adjustment to the gross income that gets taxed.

Poor people fed and sheltered by fifty bucks donated by working stiffs equally benefit from the donation as they do from the fifty dollars coughed up by a mega-church or corporation.

The matter of my small home office being part of my property tax bill also rankles me, since I cannot exempt that portion of my home from property taxes, as do churches.  I am particularly rankled by religious groups that proclaim the virtue of poverty, but display precious little real estate poverty themselves.

Fun word of the day, “rankle”.

I guess I should make clear that I do not regret being charitable.  Being charitable is not merely a good idea for us…it is The Law.  What irks me, is that my charitable giving is undervalued by the feds and state, despite the fact that my charity directly lightened the burden poor people place upon the feds and state.

Here is an idea that should get some popular support.

Since private donations do the same public good as “services” rendered by houses of worship and corporations, change charitable donations for most individual income brackets to tax credits, instead of tax deductions.

Because, unlike millionaires, mega-corporations, and holy men, poor people and the middle class can never fully escape taxation, set up the credit on a sliding scale according to income bracket.

Those earning up to $50,000 per year get a dollar-for-dollar tax credit, up to their total tax liability (state and federal).  Incomes from $50,001 to $199,999 get 60% of the credit and anything above $200,000 has a choice of claiming their charity as a deduction or as a 40% tax credit of the total charitable amount.

The credit decreases as income increases because high earners tend to be able to deduct “stuff” more readily than the guy who pumps gas or the gal who cuts hair.

Next, require every hoo-doo holy man engaged in the business of worshipping of invisible friends to prove the value of their charity to the public.  I do not want them to prove the existence of their invisible friend…just provide proof of the dollar amount given to the public good in the name of their invisible friend.

In short, stop giving tax advantages to people simply because they wear their shirts backwards.

Now, take another look at the kids at the beginning of the story.

They each have a gross “income” of $520 per year.  They give away $260 of their gross earnings to charity.  Unless they can come up with a magical dollar amount called “the standard deduction”, the value of their charity goes completely unrecognized by the feds and the state.

All the kids are left with is the warm feeling that comes from being a mensch.  They get that with the added un-warm feeling that comes with being unappreciated by the feds or state that is not unlike the feeling of sleeping in a wet bed.

See how this tale came full circle?

A wet bed.

Urine.

Tax dollars, confiscated as an interest-free loan to the state via payroll deductions or quarterly “contributions” getting stolen outright, or at least pissed away.

Writing is magic.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: