Taxes: Are We Sure We Need The Carbon Tax?

QuestionBelieve it or not, on social media, I have witnessed people advocating for Carbon Taxes for the United States and Canada in more than one or two posts.  Mentally shocked, stunned, and intrigued, but not wholly surprised by this turn of events, I have been reading some of the literature, the websites, and the emotional pleas.  May I congratulate the producers of this literature on the masterful job of marketing ideas anathema to liberty as espoused by these materials?

Before those marketing the Carbon Taxes break out the champagne and meatless burgers, let’s discuss something seriously.  When was the last tax that actually did what it was supposed to do?  What is an effective tax being collected and used at funding the government without developing the need for debt?  Name your favorite tax; if it doesn’t make the list below, leave it in the comments; I will research it, and if it is doing what it was supposed to do, I will retract this entire article and issue an apology!  I will put this conclusion against every single tax, in every government, across the globe.  The tax’s only stipulation has to be effective in every nuance of the word “effective” as listed in the Webster’s Dictionary.Lemmings 4

Social Security was an early contender and loser.  Social Security began with a considerable fund, then Congress voted itself the ability to raid the fund, paying “IOU’s,” and now the fund is all but bankrupt, and if you were born after 1980, do not expect to see a dime of forced taxation through Social Security.  Between skyrocketing costs in administering the program and the government raids, there are no retirement funds in this Ponzi-Tax scheme.Access Your Social Security Benefits Information Online | East Brunswick, NJ Patch

Medicaid/Medicare is another early contender, another tax that is directly witnessed in the paychecks of Americans, and a program fraught with fraud, laced with expenses, destroyed by exorbitant wages for bureaucrats and processes that are so byzantine that pretzel factories have fewer twists and turns.  Another Ponzi-Tax scheme that is underfunded or overstaffed to the Nth degree, and the government continues to add everything but sanity and common sense to the program.  As a point of fact, Medicare and Medicaid, being state/federal shared programs, the convolutions and responsibility for who pays make the Tasmanian devil of Warner Brothers fame look like he is strolling in a park as he walks calmly past.Medicare vs Medicaid (EVERYTHING YOU NEED TO KNOW)

Fuel taxes were a very short non-contender on this list.  The government has been pushing fuel taxes as the direct means of fixing roads, bridges, tunnels, and other infrastructure projects.  Still, there is never any money in the fund, and there are constantly terrible roads and bridges to point to that need immediate fixing.  Worse, the only solution is to increase the taxes paid, not to answer where the money went that was collected to pay for the repairs.Fuel Tax

In Maine, as a kid, we had a DARE program.  The program was doing a good job and helped to keep kids off drugs.  In November, the election carried a tax addendum that parents and teachers all got behind to push to approve because the program was doing a good job.  The following January, directly after the tax went into effect, the government announced that the DARE Program was being canceled as too expensive.  The tax was not returned, not canceled, and is still on the books as a valid tax for the taxpaying public, but the program has been dead since the mid-1990s.  A similar event occurred in Utah, Arizona, and I would bet several hundred other places as well.Geauga County Sheriff - Law Enforcement - DARE Program

Sales tax, do they promote sales; no.  Does a sales tax improve sales; no.  Does a sales tax help those who sell goods and services; no.  Does a sales tax aid the area the sales tax is collected in regarding sidewalks, street maintenance, sewers, etc., for the common good and improvement of society; no.  Why do we have sales taxes?Bookkeeping & Tax Puzzle Pieces: Payroll and Sales Taxes

Inheritance Tax, Generation-Skipping Transfer Tax, Gift Tax, etc. – better known as the class of death taxes, are more interesting contenders for this list.  Do inheritance taxes promote or demote savings, spending prudence, and family wealth?  Go on; I will wait; you can discuss this amongst yourselves for a moment. … Need more time.  No worries.  I can wait.  …  Since the government began charging inheritance taxes, less people have saved money, fewer people leave money to their family and friends as it causes long-term problems for the living.  The social aspects of this single tax are so incredible; we could spend several years describing the fallout and never cover all the details.Death And Taxes Quotes. QuotesGram

Excise taxes – also referred to as “Sin Taxes.”  These are taxes, not fees, passed onto the consumer by the soda, fast food, tobacco, and alcohol manufacturers to prevent kids from using these products that the government collects and then misspend.  No, these are direct taxes that raise the final costs before and at the register that everyone thinks is a good idea to deter people from using those nasty products.  Except, how many people have been stymied by the taxes on sin products; research claims the number to be a statistical zero.  This means that when the error margin is taken into account, the number is too small to be statistically significant enough to measure.  Puritans passed this logic into tax code; thank them the next time the government figures you should pay more for a Playboy than a National Geographic, more for a pack of cigarettes and a six-pack of beer.  Since fast food is considered a sinful commodity, sin taxes apply, are you eating less fast food because of the sin taxes and sales taxes?  By the way, are you losing weight from the height of taxes on your sin foods and drinks?

Wealth Tax – Did this tax increase the number of wealthy people; no!  Did the wealth tax make taxes more “fair” and “proportionate” for the lower and middle class; nope!  Did the wealth tax equal anything; no!  However, the tax did help increase the number of tax lawyers bilking people making money out of their hard-earned dollars to hire them and defend their fortunes.  Ask Majority Leader Pelosi how many she has to hire and keep on retainer to avoid taxes; oh wait, she is exempt.  But her husband’s income isn’t.  How many tax lawyers, accountants, bookkeepers, and money managers does he have to hire to prevent him from paying taxes?  Just remember something, according to the government, your cellphone is considered a luxury, and is charged a wealth tax.  I know people who live out of their motor-home, they are considered homeless, but their home is charged a luxury tax rate.  They do not have any other home to live in, and live year round at various campgrounds as they save enough to move down the road.  They are not rich, they sold everything, bought a used motor home to pay the bills, they are not retired; unfortunately, they are not alone in America either.  Think the language is skewed where taxes are concerned; I do!OMG, They're paying a wealth tax over there - millionin10

The government already collects a significant amount of taxes classified as “Environmental Taxes” on everything from fuels and oils to chemicals, aerosols, bottled gases, and firefighting retardants, among many other products.  There are environmental taxes on the fuels you and I use in our vehicles, the trucks that carry our goods to market, the farm machinery raising animals and grains for markets, and that power the ships sailing the oceans.  How much cleaner is the water and air with these taxes?  These taxes were intended to help protect the environment; instead, these tax proceeds flowed into mysterious accounts and then into murky government payments.  Now the government wants to increase taxes with a carbon tax to protect the environment.  Are these environmental taxes going to disappear if a carbon tax is implemented?  I did not see this mentioned in the literature; surely, that was a simple oversight, and the government will correct their mistake and eliminate taxes no longer needed.Revenue from environmental taxes in EU reached nearly 360 billion EUR - Finance and Markets

Here’s a fun exercise, search the phrase “effective taxes,” and you find how language has been plasticized where taxes are concerned.  An effective tax is an average tax.  Not that the money went where it was supposed to go, not that the tax effectively funded the government without producing debt, simply acknowledging that you paid the average of everyone else.  Think the government was effective in using your tax money?

Knowledge Check!Do you see a commonality here?  Failure to fulfill a purpose leads to increases in taxes, fees, surcharges, and other tax schemes, and the money never goes where it is intended.  Honestly, can you trust the government to accept your hard-earned money and create a healthier environment?  I have my doubts.  Feel free to correct me.

© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.

Sales Tax Holiday’s – Pure Politikal-Gimmickry

Angry Grizzly BearUntil I moved to New Mexico, I had never heard of a “Sales Tax Holiday.”  As a kid, I learned about rebates from an economist who defined rebates as money that did not have to be charged, which pays for a program to give some money back after the purchase concludes.  However, rarely are rebates actual cash returns, but get “built” into the price to sell the product.  Consider all the gimmicks and rebates involved in selling a car, and you know the truth and deceptiveness of rebates.  Sales tax holidays are one of the biggest scams perpetrated in 17-different U.S. states, and it is time to rip the bandage off this festering wound and apply some sunshine disinfectant!

What is Politics?

Politics is too often a word with so much baggage; people become confused and stop listening after hearing the word politics.  According to Webster:

As a Noun, “the activities associated with the governance of a country or other area, especially the debate or conflict among individuals or parties having or hoping to achieve power.”

    • The activities of governments concerning the political relations between countries.”
    • The academic study of government and the state.”
    • Activities within an organization that is aimed at improving someone’s status or position and are typically considered to be devious or divisive.”
    • A particular set of political beliefs or principles.”
    • The assumptions or principles relating to or inherent in a sphere, theory, or thing, especially when concerned with power and status in a society.”

As a Verb, politic/s is derogatory and is defined as “engaging in political activities.”

Knowledge Check!From Old French Politique “political,” Latin from Greek Politikos, and Polits “citizen” and Polis “city.”  Thus, we have described the term politics in all its glory and inhumanity.  Is the term more understood?

Politics is a descriptive tool used to identify certain human activities where power is sought, and devious means and divisive gestures are employed to obtain that power.  Every action tied to securing power through devious means and divisive gestures is politics or political, which means derogatory.  For those needing more, derogatory is “showing a critical or disrespectful attitude.”  Thus, at the root, politicians by their very name and nature are derogatory towards those who elect them into power.

What is Realpolitik?

Bobblehead DollRealpolitik is politics or diplomacy based primarily on considerations of given circumstances and factors, rather than explicit ideological notions or moral and ethical premises.  For a long time, the American public has witnessed the same political gamesmanship (realpolitik) in the U.S. House of Representatives, the Senate, and the Presidency.  All because those in power have intentionally blurred the line between a Republic and a Democracy to stay in control.  Never does realpolitik benefit the rule of law or provide equality as a primary and fundamental governance position.

Sales Taxes

Use the link on Sales Taxes to appreciate progressive and regressive taxes more fully.  The sales tax sits at the highest pinnacle for regression of all the progressive ideas needing to be eliminated.  Consider this, in states with the highest sales taxes, the sales tax is a reversed pyramid scheme where the final consumer winds up paying taxes on business-to-business transactions, dynamically increasing the price of the final goods or services delivered.Gravy Train 3

From an article on sales taxes by the Tax Foundation, we find the following important information:

“Narrow sales tax bases reduce collections, but more importantly, they make the tax less neutral and less economically efficient. Many states exempt certain goods (like groceries or clothing) from the sales tax for political reasons, excluding many consumer services (such as dry cleaning, haircuts, or tax preparation) largely by historical accident. Most states instituted their sales taxes during the Great Depression, when services made up a much smaller portion of the economy. Since then, the portion of total U.S. personal consumption dedicated to services has grown significantly, while the purchase of goods has declined. This trend has contributed to the erosion of states’ sales tax bases over time, an unintentional base narrowing that puts upward pressure on sales tax rates.

How can a person tell that sales tax schemes create inequitable tax bases:

Curiously, a policy expressly designed to inject progressivity into sales taxes—an exemption for groceries—largely fails to accomplish its purpose. Studies suggest that the exclusion of groceries beyond the necessary exemption for food purchased using SNAP or WIC does not favor lower earners.”

What is a Sales Tax Holiday?

Lemmings 2Simply put, a sales tax holiday is a day, usually just a single day when the government allows you to purchase goods and services without paying a sales tax on the receipt.  However, all the other sales taxes are still built into the cost of the good or service; just on this special day, the final receipt sales tax is not charged.  Sales tax holidays are one of the most inefficient and ineffective methods of “sharing unanticipated government money surpluses with the taxpaying public.”

How do we know sales tax holidays are a gimmick, are ineffective and inefficient, and are nothing but the practice of realpolitik?  In 2017, the Federal Reserve researched and found that sales tax holidays only shift normal patterns of purchases, not spurring economic growth, not increasing sales, just moving sales to a holiday to see a minor benefit on regularly planned purchases.  What’s worse, sales tax holidays discriminate unequally, making taxpayers the fool.

Tax Scheme 2For example, Florida in 2021 held a “Freedom Week” where camping supplies and outdoor hobby supplies were tax-exempt.  As a disabled person, I cannot camp.  As an empty nester, there are not many outdoor hobbies for myself and my retired spouse to enjoy where we need supplies.  Thus, people like myself and my spouse would not benefit from “Freedom Week.”  The same goes for tax-exempt school supplies; not having children in school, we do not benefit from a sales tax holiday as kids prepare to go back to school.

Worse, those in the lowest income brackets, guess what, they do not benefit from sales tax holidays either!  Just like in the example above regarding the sales tax “exemption for groceries—largely fails to accomplish its purpose and does not favor lower-income earners.  Hence the politikal-gimmickry of sales tax holidays.  If your circumstances do not allow you to participate in the sales tax holiday on the exact day (or days) provided by your state, you lose, and the politicians could care less.

Janelle Cammenga, writing for The Tax Foundation, makes the following case:

Sales tax holidays are political gimmicks that distract from genuine, permanent tax relief. Sales tax holidays are free marketing for businesses to advertise for a 4-7% discount on products.  If a state must offer a “holiday” from its tax system, it is implicit that the tax system is uncompetitive. If policymakers want to save money for consumers, they should work to reduce the sales tax rate year-round.”

Tax BurdenI agree, mightily, sales taxes are progressive, which makes them a poor tax, to begin with.  Adding sales tax holidays make a sales tax worse!  Yet, they are sold to the public as if they were the best thing since sliced white bread.  While it may be true that taxes are the cost of society, there are better ways to collect taxes, and there are infinitely better ways to spend taxpayer dollars than the profligate waste we see happening daily!

© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.