I read an article last week, which suggested that Warren Buffett, America’s richest man WANTS the IRS to charge him more tax. I initially decided that either the summer heat must be getting to me and I’m seeing things or that Mr Buffett had just visited Amsterdam or something! Billionaires arguing about paying more tax! aren’t you guys supposed to complain about the “insidious tax burden” they face having to pay 2-5% of annual earnings in tax, against the 30-50% the rest of us pay (once you factor in VAT, rates, income tax, National Insurance, etc). Then I hear about several French Billionaires wanting to do the same thing! What is our crazy world coming too!
I think I see a potential policy here for Obama. He introduces some form of one off super tax on the wealthy, or a new top rate of tax for multi-millionaires. But as with everything in America we need to market it properly. I suggest the name Providing Appropriate Tax Requirements In Our Time or Patriot Tax for short. This would put the cat among the pigeons. Those right wingers who love to drape themselves in the US flag would suddenly face the accusation of being unpatriotic by dodging tax (either through legal loopholes or by using more illicit techniques). “Why does Bachmann hate America so much?” or “why are the Koch brothers so un-patriotic?” would be comments the left wingers could say and still keep a straight face. Fox News won’t know what to do!
More importantly it would combat what to me is a serious problem with many of the world’s super-rich who seem to think that its okay to cheat on you’re taxes if you’re rich enough or you’re crazy right wing politics disagree with said taxes (even in situations where you’re job or business is dependant on high levels of government spending). This policy would hammer home the point that there is never any excuse for such behaviour.
Take my example. I oppose council tax. For those not from UK shores this is a tax that is calculated based on the value of the house you live in (whether renting or the owner). The bands are very wide and thus someone living in a 1 bedroom apartment in Camden Town can wind up paying the same tax as his super rich neighbour in a 5 bed penthouse in Notting Hill. Meanwhile, Billionaire Phil “Tax-less” Green pays no council tax (nor income tax), as he flies in every week from Monty Carlo and stays in a plush London hotel. Or how about if you bought a house many years ago in a working class suburb and retired? Now just because you’re neighbours are all yuppies and the house price has gone up since then you’re living on cat food just to pay off the council tax. It’s basically a horribly unfair tax, the tax equivalent of driving down the street randomly shooting up the place with a scatter gun. A local income tax to me would seem much fairer as this would link ones ability to pay to the amount one pays in tax. But do I pay council tax, despite my objections to it? Yes, I do, reluctantly, so reluctantly in fact that I just realised forgot to pay it yesterday so will have to run down to the post office! Either way, objecting to a tax is no excuse for not paying it (unless you genuinely can’t afford to pay it or they’ve overcharged you, which is a common occurrence with the council tax!) as you merely shift the tax burden onto your fellow citizens. If you disagree with a tax, vote for parties who pledge to change it…of course I did that, they got into power and are still squabbling, go figure! And of course the rich frequently do this, buying up politicians get them to repeal taxes but not the services of the state that it supplies to them.
Of course as I pointed out in a prior post, we cannot simply tax the rich and that will solve everything. But certainly it will go along way to solving the financial problems of several states. An increase in general taxation in many countries (the US particularly) is inevitable as are some spending cuts. In the US the military budget and excessive farm subsidies plus the various corporate welfare and other elements of political pork would be my first targets for the axe.
But certainly the rich need to realise that the gravy train they are rolling along in is about to reach the end of the line, and they are going to have to pay their own way from now on. And the rich have every incentive to support these policies. As I also pointed out in a prior post the rich have the most to loose if major trading nations start filing for bankruptcy. Some of those debts that will be defaulted on are owed to them, or owed to the bank or hedge fund which all their money/gold/shares are tied up in. So supporting higher taxes, as Buffett and Bettencourt propose, isn’t entirely an altruistic move. Also, by agreeing to a modest tax hike now they are heading off the possiblity of a much more severe one in the future.
Either way we all need to accept, that none of us like paying taxes, but it’s a necessity, as its sort of nice to have police, firemen, emergency services (like those all important hurricane warnings going out now stateside), roads, libraries, schools, parks, sports grounds, art galleries, hospitals and public transport – amongst many other things! We have to pay for those services some way, and if we don’t pay for them via taxes then we pay for private companies to supply the same service. And the experience here in Britain is that those private services usually cost more and supply a poorer quality of service (see my comments on British Railway privatisation).
There are but two certainties in life – Death and Taxes. And scientists are working on the first of these!
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