The Great American Tax Charade
Happy Tax Day! Are you feeling patriotic? Me neither. The truth is, the ever-changing tax code needs to make a huge change. Now, with an election looming on the horizon, there is no better time to get educated and make your vote count.
The tax code needs to be scrapped, burned, encased in lead and then shot into the sun, just to be sure that we will never hear from it again. We as a nation need to move in the direction of the John Linder Fair Tax plan or toward a flat tax, which is being utilized with incredible success in many countries around the globe. Our current tax code is an instrument of evil that politicians use to divide the country.
The sad reality is that if you are wealthy enough, you can afford to pay certain Wall Street firms to get you out of paying anything. Wall Street, Hedge Funds, and Insurance Companies make a fortune aiding the wealthy in finding loopholes. They have a vested interest in having a tax code as complex and unstable as possible. Those firms just so happen to be supporting candidates that agree with the Byzantine and oppressive nature of the code.
Companies like Apple have been known to tap into the global debt markets and borrow money, because overall it helps them save money. It’s cheaper to borrow and pay out the dividend than to pay the highest corporate tax rate in the world. While many consider this “tax avoidance”, tax avoidance is not illegal, tax evasion is.
In 2013, we watched people like Senator Carl Levin and Senator John McCain whine and wag their finger at Apple for saving money. This is pathetic and disingenuous. These two statists, as well as some of their peers, released a report that “alleges Apple avoided paying taxes on $44 billion in offshore, taxable income.” They also stated that “Apple did not break the law.” Why then, did they force CEO Tim Cook to testify, ultimately forcing Apple to retain a top law firm to protect themselves…from following the law?
The truth about corporate taxes is that they are nothing more than a tax on the consumer. Corporations just pass the cost on in the products they sell. Whether it is Exxon, Starbucks, Apple or the corner diner. The tax money comes from the products or services that are being sold. If Apple is wacked with higher taxes the price of their products go up, and it’s the consumer that feels the effects of this.
There will be no meaningful tax reform as long as we the people continue to put the same types of people in positions of power. Without fail, every single time we change rules or rates, there are new and intricate ways that the powerful and politically connected find paths around the taxes. Before the Obamacare rules the tax code was over 60,000 pages long, and has been steadily growing since its creation. When the income tax was passed over 100 years ago, it applied to the top one-half of 1% of the population and the form was one page.
Do we really need that many rules and regulations, when no matter how many we add corporations find a way around them? And how can we stop doing this? I feel that the most prudent course of action by conservatives in Congress, rather than going after the President for unscrupulous behavior in utilizing the IRS to target opponents, would be to take a stab at tax reform.
The problem with that idea is that I do not think there are enough high character individuals to make reform a reality. Too many of our current crop of so-called conservatives love the power of the tax code as well. Unfortunately, I highly doubt they will do a darn thing about reform, except pay it lip service.
Chris Markowski is the founder of Markowski Investments, a Tampa-based financial company. He is also the radio personality behind “Watchdog on Wall Street” a weekly national radio show.
