CHARLIE MITCHELL: Tax laws don't have to be a bowl of spaghetti

By Charlie Mitchell

OXFORD – Taxation is necessary. It could be neat, clean, balanced and transparent. But then what would folks demagogue?
Picture this: Fat cat directors of Buzz Beverages sit at a board table in their three-piece suits. They’re puffing cigars as their accountant prepares to deliver the year-end report and distribute hefty dividend checks.
As he takes his seat and cracks open his portfolio, the accountant has a realization.
“Dang,” he says, “I just remembered. I was supposed to pay corporate income taxes.”
He continues, “Not only that, I failed to include the property taxes on our manufacturing plants and our headquarters, our equipment and inventory taxes, the taxes due for our fuel, on our trucks and warehouses. Oh, and I forgot the payroll taxes and Social Security matching money on our employees. And I forgot the excise, sales and use taxes we owe, too, as well as the regulatory and inspection fees.”
The accountant stands up to leave. “Sorry,” he says. “Be right back.”
Cigars drop to the floor.
The scene is ridiculous, but it’s the image nurtured by those who say “taxing business” is the surefire way out of any economic black hole.
It embodies the idiotic view that commercial enterprises don’t calculate their overhead- including taxes – in setting prices and operational plans, including whether and where to build plants or expand operations.
Raise operational costs for Buzz 10 percent and the price of Buzz products rises proportionally. The business doesn’t pay taxes. The customers do.
Do some sellers of goods and services set prices unreasonably high? Is there profiteering from time to time? Yes. But a parallel business precept is that the marketplace will eliminate the overchargers, too.
Equally irritating is the insistence that “the rich don’t pay their fair share.”
In the first place, both Mississippi and federal income tax laws have from their inception been “progressive.” It’s not the more you make the more you pay. It’s the more you make the larger the percentage due each April 15.
A low-income household has a small pie and the taxman takes a small slice, if any. A high-income household has a much larger pie and the taxes take a larger slice of the larger pie.
President Barack Obama says closing personal and corporate loopholes could result in billions of new revenue. No doubt he’s right. Any CPA will tell you the behemoth IRS code, most of which has been “adopted” as Mississippi income tax law, is slap full of carve-outs for special industries or employers who have hired the right lobbyists, made the appropriate campaign donations.
It is well-documented that even the IRS can’t interpret or apply with certainty some of its regulations that are conflicting at best, overlapping at worst. More twists and turns than a bowl of spaghetti.
What’s most offensive, however, is when the president and some of like-minded supporters defend taxing the rich even more because “they don’t need the money.”
For a long time now, Congress has felt moved to establish minimum wages and other workplace rules, but never before in American history has a public official felt there was any authority to establish a “maximum income.”
The nation has always had the rich and the super-rich, Vanderbilts, Carnegies, Fords and, more recently, Bill and Melinda Gates. They’ve been friends to humanity, not enemies. They should be (and have been) our philanthropic heroes for their energies and innovations, not vilified because wiping them out would be a convenient fix for an irresponsible government.
Further, there is absolutely no authority anywhere for the proposition that government is somehow righteous, as Obama seems to believe, if it confiscates money it decides citizens don’t need.
Flat tax.
We need government and the services and security it provides.
Government needs money – lots of it.
Everybody benefits from government. Everybody should pay. Everybody, even people on welfare and unemployment.
Plug the plug on all the speechifying and deduct or otherwise collect 10 percent of each dollar of income.
Force Congress to budget the way the Mississippi Legislature does, meaning last year’s income is the general basis for this year’s budget – including scheduled payments on the debt.
It would put a lot of lobbyists and perhaps entire accounting firms out of business. It would leave a lot of news-talk shows with nothing to yap about. And it would restore fiscal sanity.
Do it. Then let’s go out for a Buzz.
Charlie Mitchell is a Mississippi journalist. Write to him at Box 1, University, MS 38677, or e-mail cmitchell43@yahoo.com.