Tax Day Protest – More Proof America Is Delusional

I’ve always promised myself that I wouldn’t write about politics on this site, or any other. Politics is a lot like chasing your tail – no matter which direction you go, or which politician or party you support, the end result is unlikely to change much. It’s the story of a largely comatose culture that’s bent more on protecting what it has then forging a better path to the future. But the Donald Trump phenomenon has me coming out of my political shell, forcing me to defend a personality that I don’t necessarily even like myself, if only in the interest of fairness. The much documented tax day protest offers proof America is delusional, even on a gut issue like taxes.

And that’s what bothers me.

It’s bad enough that the political class are a classic example of the blind leading the blind. But when millions of Americans work so diligently to reinforce the blindness – that’s what keeps me awake at night.

The Tax Day Protest – It Sounds as American as Apple Pie

“Tax day protest”; doesn’t it just invoke thoughts of the Boston Tea Party, the Proposition 13 movement against high property taxes in California in the late 1970s, and other popular public protests against high and unfair taxes?

Tax Day Protest – More Proof America Is Delusional
Tax Day Protest – More Proof America Is Delusional
The right to assemble to make our concerns known to the powers that be is an integral part of the democratic process. In fact, it would be hard to imagine democracy having any real place in our society if we didn’t have that right. After all, the voting booth doesn’t always work when it comes to ushering in needed change, particularly when it comes to specific but broad issues, like taxation.

But nothing so noble occupied the minds of this past weekend’s protesters.

What the “Tax Protesters” Want

So what exactly is it that the tax protesters want? Lower taxes? Lower tax rates? A more equitable tax scheme? Tax simplification?

No to all of it. No, what the tax protesters want – and what they consider to be integral to US tax policy – is for our newly elected president to release his tax returns for public scrutiny.

Now I don’t want to dismiss this as an irrelevant concern. The nation’s leaders should be held accountable, particularly in regard to how they handle their income taxes. And there’s no doubt that Donald Trump very likely has a more complicated tax situation than the average citizen, and one that could raise more than a few questions.

And that seems to be the primary objective. I’ve already written that the Trump opposition has dedicated themselves to removing him from office and little else. That’s the real story with these tax protests.

The protests were apparently initiated by a group called TaxMarch.org. According to the website, the purpose of the protest was to “demand President Trump’s tax returns and a fairer tax system”.

That all sounds fair enough, particularly the part about a “fairer tax system”. But if you follow the news reports on Saturday’s events, the protests focused exclusively on Trump’s tax returns. It doesn’t appear that tax fairness – or any other reasonable demand – was part of the agenda.

There was something else that speaks volumes. According to a New York Times article, at least some of the people who attended the tax march protest were also present at the women’s march after Inauguration Day in January.

So there you have it. Tens of thousands of people, maybe hundreds of thousands, have dedicated their existence and free time to the removal of Donald Trump from the White House.

At another time and place we might rightfully refer to such a group of rabble as a lynch mob.

What the Tax Protesters SHOULD be Calling For – IF the Country Were Sane

If we look at the concept of a tax protest in the broadest sense, it should focus on issues related to the tax code that represent an impediment to the largest number of people, and may also be strangling the economy. And it’s actually a long list at that.

We can start with high marginal tax rates. The top federal income tax rate is 39.6%. While that’s lower than the highest tax rates that prevailed before the Reagan tax cuts in 1981, it still approaches confiscatory levels.

When combined with high state income tax rates, we’re looking at a marginal tax rate approaching 50% in high tax states. We can talk about tax-the-rich all we want, but the reality is that rates that high hurt investment and business formation. That results in less money and fewer jobs for everyone.

Then there’s also the matter of the 35% corporate income tax rate. While that may seem fair on the surface, it’s important to realize that the US is competing with other countries for international business. Many of those countries have far lower corporate tax rates. This has a lot to do with why so many companies are moving their businesses offshore, to more attractive tax havens.

But apart from high marginal tax rates, we should also look at the inequity inherent in the tax code. While the top federal tax rate is 39.6%, there’s also the FICA tax – and that’s as high as 15.3% if you’re self-employed. Since this is a flat tax, it’s also a regressive tax. It’s even possible that a person making $75,000 per year is paying more in FICA tax as a percentage of income, than someone making $500,000. What’s fair about that? Yet it never gets discussed.

Then there’s the complexity issue. The tax rates we’ve discussed so far are only the basic ones. There are also other tax complexities, including the alternative minimum tax, the phaseout of personal itemized deductions, depreciation allowances, limited investment loss allowances and a host of tax credits and surcharges that have rendered even relatively simple income tax returns in desperate need of a computerized tax preparation service.

It seems to me – in my simpleminded thinking – that these tax issues are a whole lot more important than Donald Trump’s income tax returns.

Why Taxes Don’t Really Matter to the Left

I know that the issues listed above matter to me, as well as to millions of other Americans. But why do they not – and never – seem to matter to the Left?

There are several reasons:

The government dole. It’s now estimated that nearly 50% of Americans receive some form of government benefits. With half the population on the receiving end of tax revenues, there’s little concern among the group for the tax burdens born by those who pay them. Translation: there’s more political capital in sucking up to the takers than to the payers.

The tax code includes generous tax breaks. Chief among them are the home mortgage interest/real estate tax deduction, and tax-deferred retirement plans. Many people will ignore high tax rates, so long as they have the benefit of generous deductions that keep them from ever reaching those tax rates.

Let’s consider a household that earns $250,000 per year, which makes you well placed in the top 5% of household incomes nationally. On the surface, you would assume that a family with such a high level of income would want to see some sort of tax relief. But that’s not the way the tax code works.

Let’s say that this family lives in a $750,000 house, that secures a $500,000 mortgage. They pay $20,000 per year in interest on the loan, and $15,000 per year in property taxes. That means that they get a $35,000 tax deduction for mortgage interest and property taxes. Right there, their taxable income drops to $215,000.

There are a number of IRS approved tax-sheltered retirement plans that enable you to defer up to 20% of your income per year (up to $54,000 per year in total), which means that a couple earning $250,000 per year could shelter $50,000 of it from taxes. Combining the two major deductions – home expenses and retirement savings – this couple’s taxable income drops to $165,000.

With personal exemptions and various other permissible tax deductions, this couple is able to further reduce their taxable income by another $30,000. That means that out of a taxable income that started at $250,000, only $135,000 is subject to federal income tax.

That gives this couple a marginal tax rate of just 25%. But because the tax brackets are tiered, the couple will pay only about $25,200 in total federal income taxes. That represents roughly 10% of their combined income of $250,000. If that describes your household, what’s not to like about that kind of tax system?

Tax-sheltered returns on tax-favored investments. Not only are the contributions to retirement plans tax-deferred, but so are the investments earned in the accounts. If you have $300,000 in your employer-sponsored 401(k) plan and it earns 7% for the year, you will have $21,000 in tax-deferred income.

The same is true with your primary residence. Not only are the mortgage interest payments and real estate taxes deductible from your income, but the profits on the sale of your home are generally also tax-free – which is even better than tax-deferred. The IRS allows couples to reap a gain of up to $500,000 on the sale of the primary residence without having any tax liability on said gain.

This naturally benefits high income households more. If you’re a working-class family, and you purchase a house for $150,000, it might be worth $300,000 in 20 years. That would entitle you to a tax-free profit of $150,000.

But if you’re a high income household, and you purchase a house for $500,000, it might be worth $1 million in 20 years. You’ll have a gain on sale of $500,000, that will be completely tax-free.

What we have is a tax code that favors higher income and wealthier taxpayers. Yes, all taxpayers get some form of relief, but higher income produces higher benefits. Higher income also means that a larger amount of your income can be dedicated to wealth generating assets, such as a home and a retirement plan.

These generous deductions and provisions largely neutralize the opposition to high tax rates that we would normally expect from wealthy and high income earning households. And we haven’t even talked about the generous tax breaks that are available to corporations and the very wealthy, who are often able to reduce or completely dodge taxes either by moving assets offshore or into trust accounts.

Why the Tax Day Protest Offers Proof America is Delusional

What this all means collectively is that any opposition to either the complexity or the severity of the tax code is seriously muted. In the meantime, the Left are able to play the class warfare card, to keep both government spending and tax collection at levels that are sucking the life out of the general economy and weakening the job market year-by-year.

Unlike the 1970s and 1980s, there is no longer a large and vocal constituency that opposes this trend, and insists on a move toward a more reasonable, rational and balanced tax code. Naturally, the solidly left leaning mainstream media do their bit to help their buddies in the protest marches. They, like the protesters, keep the attention focused on Donald Trump’s tax returns – as if the substance of the tax code is a complete nonissue.

Moral of the story: never rely on the mainstream media to provide a narrative of what’s really going on in this country and in the world. It’s beyond either their ability or their agenda, and which it is really doesn’t matter. The tax code is a wreck, but all that matters is Donald Trump’s tax returns. If that isn’t proof America is delusional, then I don’t know what is.

Where Do We Go From Here?

As I’ve written in the past, I don’t know where it is we go from here. Certainly it isn’t anyplace rational. The people who complain about the things that really don’t matter are the ones who gain the national audience. The people who might speak up about the issues that really do matter are too busy working, paying their bills, paying their taxes, taking care of their families and tending to their own business. They don’t have time to take a day or a weekend or a week and spend it marching in contrived protests against imaginary ills.

For whatever reason, the Left and the mainstream media have always controlled America’s national agenda, at least superficially. This is why both were so surprised when Donald Trump won the election at all. They were so certain that they had it all nailed down in advance, that the outcome was virtually a given. But when enough of the population went the other direction, they went into panic mode, as if sensing that they’re losing control.

My guess is that this will be the trend going forward. That being the case, for those of us who refuse to participate in circus acts, who would rather focus on what really matters in life, the best course of action may be to simply bide our time, and stay true to our beliefs. The circus act frantically shifts from contrived issues to imaginary ones, but if we can stand our ground perhaps we can restore the vast center that once made this country great.

Please feel free to share your thoughts.

( Photo by Fibonacci Blue )

13 Responses to Tax Day Protest – More Proof America Is Delusional

  1. The tax protestors are against the person who wants to lower their taxes? Unreal. And yes, I agree with you that the are delusional. Do they think there is a line on the tax return labeled “Russian bribes” or whatever it is they think will be disclosed? It is an excuse, pure and simple, to throw yet another hissy fit because their entitled selves didn’t get the election outcome they wanted.

  2. Hi Kathy – One of the things that annoys me about the Left is that they’re always ready to resurrect 1969 – with the protest marches, the holier-than-thou causes and the hippie/dropout commaradarie crap. It’s a big feel good fest that makes them think they’re taking the high road and saving the planet. They always need a devil at the center of their storm, to put a human face on their cause. So Trump “stars” as their 21st century version of Richard Nixon, a role they tried to paint Ronald Reagan into in the 1980s. Counterproductive and tiring always, but the mainstream media lapdogs – liberals themselves – give it the seal of legitimacy without which the whole side show would collapse. Whatever the cause du jour, the ultimate aim is to topple the presidency, after which they think we’ll return to Nirvana. It’s all very simple minded.

    They don’t care about lower taxes. In fact, any move to lower taxes will be fought tooth and nail and alleged to be another attempt by Republicans to throw grandma out on the street and to starve babies and children (translation: they’re own cherished government programs might get cut). This would be amusing were it not so damaging to the rest of us. It’s why we can’t move forward and fix our biggest problems. They fancy themselves “progressives” but they’re really obstructionists, bent on preserving the status quo come hell or high water. And it goes without saying that they don’t see any of this in themselves.

    This is why I don’t like to write about politics, it’s very frustrating because it’s always the same-ole-same-ole. I’ve lived long enough to see it play out again and again. It’s called planned paralysis. Deflect, obstruct, paralyze.

  3. I am a somewhat left-leaning person who was willing to give Pres.Trump a chance to prove he is actually FOR the good of the American people, like he emphasized in his Inaugural address and his very impressive State of the Union address.
    However, his recent aligning himself with Bush era warmongering Neo-Cons and Wall Street scions, makes me think he was either a liar to begin with or was somehow co-opted by the very forces that he said he came to Washington to ‘drain the swamp’of.
    I think all the ruckus about his so-called ties to Russia has made the man paranoid and he is now knocking himself out to disprove that he had a bromance going on with Putin.

  4. Hi Mary – That gets us away from the tax protest issue, but that’s fine, this is an open forum for the exchange of ideas. I’m Libertrian, but I agree with all that you’ve written. I voted for Trump because I didn’t want another 4-8 years of the status quo that Clinton represented. But now I find myself wondering where Trump sits. I never believed that rhetoric about draining the swamp – Washington is drain-resistant and a place where the swamp dwellers have a knack for outlasting would-be reformers. I’m also of the opinion that the missile strike against Syria was mostly to deflect the Trump-Russia hysteria and to draw in support from the neo-cons. Trump is a survivor who knows how to silence the opposition, and being as emotional as he is none of it is out of character. The Left is behaving hysterically and Trump is responding in kind. This is a serious situation we find ourselves in because it will lead to unintended consequences.

    That said, I’ve noticed a pattern of politicians who once in power get the religion of the neo-cons and Wall Street elite. Hillary Clinton certainly fell into that category. It may surprise you to know that I voted for Obama in 2008, hoping against hope that he would be different. But by 2012 it was apparent that he sold out to the same groups. This seems to be the way of Washington. It doesn’t matter what they say on the campaign trail, once they’re in positions of power they gravitate toward the same place. It’s almost as if once in office they get their marching orders and the course is set.

    I don’t have a lot of hope going forward. I believe we’ve descended into fascism, where an unholy alliance between big government and the financial establishment rule against the interests of the citizens. In the process, they collaborate with the mainstream media (the propaganda arm) to keep us distracted with meaningless side shows, like this “tax protest march”, political correctness, intentional racial tensions, and low quality entertainment (please read my post on the Kardashians) – all intended to keep us at odds with each other or perpetually distracted from the real issues. So it’s no surprise that “tax day protests” focus not on fixing the dysfunctional tax code that would benefit us all – but on getting Donald Trump to release his tax returns. It should make even a believer suspicious.

  5. Hi Kevin: Politics is a touchy subject, and that’s why I consider myself for middle of the road. Fanaticism of any sort, on either side, is useless to everyone. I admire your stand and what you’ve stated here, and you are obviously a lot more informed on taxes in this country than I am. All I know is we work hard as self-employed people and pay a boatload of them. I have a relative or two who like to hang out on the government dole, and needless to say, we don’t have much of a relationship. Actually, I want nothing to do with them is a better way to put it. I read your reference to the article about 50% of Americans on some sort of gov’t hand-out. I want to be shocked, but, sadly, I guess I’m not. Life is all about the choices we make, some better, some not so much, but I’m pretty darn tired of feeling sorry for people who make stupid choices and then cry the blues and blame the world for their woes. I’m not a liberal or conservative, but I don’t want anything handed to me that I didn’t earn, and many of us out here are right there with you when you say people don’t want solutions, they only want their own way. Spoiled brats…the lot them. Well-written article, Kevin. Thank you.

  6. Thanks Bev. My political philosophy is governed by a combination of my faith, my upbringing and my life’s experience. As to faith, I know that I’ll answer to God for the way I’ve lived my life. And over the years I’ve come to realize that I can rely on God in those dark valleys, and don’t need to turn to the state. Growing up in an Italian-heritage family taught me to value hard work and accomplishment, to take care of my family, and to play it straight. We have a few leaches in the extended family nonetheless, but I was blessed to be surrounded by a large cast of adult men and women who were the best roll models possible. None of the men skipped town, many were self-employed, and there was no substance abuse. Then in adult life, I’ve been a salaried employee, a contract worker, a commissioned salesman and self-employed. It’s given me a broader view of what the average person is up against. My 11 year stint in public accounting allowed me to see firsthand how the government/tax code penalizes self-employment. I’ve faced dangling over the poverty line with kids in tow and learned that the only way out is to fight your way back. The combination of the three factors – faith, upbringing and life’s experience has made it impossible for me to be narrow-minded, and to always consider that the real questions and answers lie outside the common debates (and to realize that those debates are always carefully framed and controlled).

    All of it gives me a more independent view of politics, and also puts me at odds with the mainstream. For example, Liberals have called me a fascist, heartless and a reactionary; conservatives have called me liberal. None of those labels are remotely true, but extremists realize the value of hanging labels on people to shut them up. My hope is that more of us who have an independent view will stand up and demand real reform. Our primary problems are centered around protecting extreme positions, including those who believe that they’re entitled to lifetime government support. There are too many young people who are physically able-bodied but are on SSDI due to some psychological/emotional issues. Most never put in the theoretically required 40 quarters of FICA contributions to qualify, but here they are. Sitting home watching TV, and doing and selling drugs for entertainment and extra cash, while laughing at the people who work for a living. It’s so obvious but the government turns a blind eye and keeps adding more to the dole. That’s just one example of the bogus “issues” that rule the day while we debate hate speech and engage in endless undeclared wars and a host of other follies. We better never have another depression because we’re not psychologically prepared to deal with it. But as a believer in God I think we need to shut it all out and do what we know is right. One way or another it’ll all be sorted out in the end.

  7. General response to all readers – I just came out of the hospital after emergency surgery for a ruptured appendix. My roommate and I had some political discussions on ideas similar to this article and comment thread. At one point he was on the phone with his wife and he said “you’re not going to believe this but I’m sharing a room with a guy who has similar political beliefs as me.” Coincidence? I doubt it. I think that there are a lot of “us” – more than we believe – but we keep our opinions to ourselves, perhaps because they seem too “radical” against the carefully crafted mainstream political arguments. Please stick to what you believe, become more vocal, write your opinions in forums, and let’s see if we an ignite a grass-roots groundswell of sane politics for once. Thank you to all readers and commentors, your comments truly add depth to the discussion.

  8. I am glad you are doing better after your appendicitis.
    I saw your mention of SSDI. I believe it originated as a program to help the permanently disabled who could not do any meaningful work because of their disability. There are people who fit that category but believe it or not, they have the hardest time obtaining disability funds of any category.
    I used to work in the building that housed the disability court and I saw people with oxygen tanks and such being turned down in favor of kids with ADHD and people with mild neurosis. In the ghetto, they call it ‘crazy money’ and entire families get the money for each kid. Certain lawyers rake in big bucks helping them get the money.
    I know a woman, whose ‘disability’ consists of not liking to get up before Noon, not wanting to wear a regular work outfit, etc. She gets about $800 a month of psych disability. I know she has worked and still does work as a street musician and does odd jobs around town. Oddly enough, she does declare her extra income on her taxes and to her disability worker.
    I saw terrible abuse of the program when I worked at Social Services.

  9. A close friend of mine worked in the county welfare office back in the 1980s and reported exactly what you wrote Mary. She told me that they had no intention of lowering the number of people on welfare because it would hurt their department and their jobs (of course we all know that SSDI is the successor to welfare). She objected and left the job. I’ve seen what you’ve seen Mary, people who are “disabled” because work gives them panic attacks or because they get nervous being around people. Friday night my sister told me of a 26 year old healthy guy (who I know as well) who’s on SSDI but HE can’t remember why(???). Yet people who have severe physical disabilities, who’ve paid into the system for decades, get declined or their cases are held up for years. It’s a classic case of the inmates running the asylum. There’s a Bible prophesy that warned us that this time would be coming – “For the time will come when people will not put up with sound doctrine. Instead, to suit their own desires, they will gather around them a great number of teachers to say what their itching ears want to hear.” – 2 Timothy 4:3. This in the most educated and advanced nation in history – how did we get here???

  10. Re: Tax protests – I agree – the whole thing, from the Syria Attack to the so-called N. Korea threat and all the various stirring up of racial tensions and class warfare are ‘false flag’ events. A great movie, ” Wag the Dog” by director Berry Levinson, explains in a fictionalized manner, all about false flag events and created political crisis.

  11. Agreed Mary, it’s all part of the distraction and keeping us divided. I’ll have to watch that movie, though it may be “preaching to the choir” in my case, and just fuel my already well-entrenched cynicism. In looking back, I now realize that I attended a progressive high school. They warned us of this kind of thing, and that was back in the 1970s. But I think the 70s were a more cynical time in general. I’m fortunate to have been born when I was.

  12. Regarding the welfare offices: The Virginia state office had to take over the running of the local Richmond office because the big cheese at the local office had them shredding case papers on extremely abused children. She didn’t want her record to show all those abused kids!
    There, in some cases, has been too much push to reunite families when those families should never be reunited. Severe abusers and drug addicts and alcoholics should not be raising kids. I know some addicts and alcoholics recover but they should have a stiff standard to prove they have recovered enough to take back their own kids. That push was part of the problem in the local office.
    I did not work in the field or the local office. I worked in the Central Registry of Child Abuse and Neglect, where we kept databases of those convicted of child abuse or neglect. I will say most of what I saw was the result of people having too many kids too young and unprepared and too poor (and sometimes too stupid!) to raise them. Alcohol and drugs played a part. However, once in a while, I came across people whose type of abuse and/or neglect could only be called evil incarnate. For some odd reason, I was the worker that always ended up with those forms coming across my desk! I caught some people who it was hard to believe that they were human because their behavior was so low.

  13. You’re fueling my cynical side here Mary! I’ve long noticed that the worst offenders (of all stripes) – the real abusers/criminals – seem to get off, while the incidental/misconstrued events drag people through the mud. Some serial abuser gets to keep their kids while a teacher gets slammed for hugging a kid, or some other harmless act. I’ve become cynical to the point where I think the purpose of the criminal justice system is to keep the worst offenders on the street, perhaps to preserve criminal justice jobs and to increase funding (through public fear). As long as the true bad guys are still on the loose, the whole system keeps moving forward. If a few innocents have to be sacrificed along the way, then so be it.

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