For decades we have heard the same old rhetoric from the GOP that goes something like, “Government should be run like a business.” This makes sense when you consider that a business in our quasi-capitalistic country is not run like a democracy, more like a dictatorship given the CEO, or in the case of a closely held business, the sole owner, calls the shots. It’s not a democratic process. This may explain how they could rally around Donald Trump, our former fearless leader, who managed to bankrupt quite a few businesses in his career.
What I would really like to address however is how the GOP runs a business when they are in power. We have an organization called the IRS that under the Department of Treasury is responsible for collecting trillions of dollars, more than any other government, public or private, entity in the world, yet the GOP is constantly cutting their budget when they are in power which impedes the IRS ability to collect from taxpayers. It’s obvious to me as a CPA specializing in income tax, that the strategy is designed to lower the number of audits done by the IRS and create an environment where tax evasion and fraud go unpunished, a payback to their wealthy donors thanks to Citizens United vs. FEC that allowed corporations to make unlimited donations to political campaigns.
What’s frightening is that nothing is being done here. The law abiding taxpayers that end up paying for those who cheat the system are the victims. The other consequence is an underfunded government that has to borrow money every year, despite the fact we have experienced full employment over the past few years.
What’s also frightening is the Democrats lack of interest in changing the income tax laws that so clearly favor the rich, and I can attest to it because I prepare income tax returns. People like Warren Buffet feel guilty about paying a lower percentage of taxes than his secretary.
The other discrepancy here that can’t be allowed to last much longer if we want to keep our country strong is how the producers in this country are being heavily taxed compared to the idle rich. In California, capital gains and dividends are subject to a federal and state tax range of about 25% on income of up to about $500,000. Compare this to the producers who pay nearly twice that percentage at that same level of income and that doesn’t include employment taxes of about 15% on the first $145,000 in earnings.
We are in affect highly taxing those individuals that keep our economy running and rewarding the idle rich. This is a form of feudalism and will gut the middle class until it no longer exists.
Is this really what we want?