Life Is Not Fair

Death and taxes – two things everyone must experience. Oh, wait – almost everyone must experience them. You see, we cannot change how we are born into this world, how much money our parents have, or how talented we are. Life is not fair.

Currently, everyone who works and receives an income pay 10% in taxes – on the first $7150. After that, you will pay 15% until $29,050, at which point you will pay 25%. The federal government uses a graduated income tax on all working individuals, which means that the more you make, the more tax you pay. The other possibility would be a flat tax, which means that everyone pays the same percentage of his or her income.

One of the things that President Bush wants to do during his second term is to simplify the tax code. One of the ideas brought to the table was abolish the graduated income tax and implement a flat consumption tax. This is similar to the value added tax in many European countries. As expected, the idea summoned resistance from the left and has earned the label, “unfair.” They are right, it does seem unfair – but only because the system would merely be adjusting from what already is unfair.

A flat tax mandates that everyone pay an equal percentage of his or her income – THAT sounds fair. How should we deal with those who do not make much money? Quite simply, they pay less. If the government decides that it needs 20% of everyone’s income, but charges some less and some more, then they are messing with our standard of living. The government has been trying to “raise” the standard of living for low-income families at the expense of those who they deem “well off.”

I ask you, “How is this fair?”

There are many factors that go into what our standard of living will be - some factors we cannot change. However, I do not want the government deciding what is “too much” or “too little.” Let the combination of fate and effort determine how high our standard of living is. Being “well off” is not one of our inalienable rights.

Nowhere is this more evident than if we impose a consumption tax instead of an income tax. Imagine approaching the checkout counter with a TV in you shopping cart. The cashier proceeds to ask you how much you make, how many kids you have, and how much you gave to charity – then they assess your sales tax. You realize that Uncle Sam has penalized you for making more than your less fortunate neighbors have. While this would seem absurd, it is precisely what a graduated income tax accomplishes.

Flat taxes are fair, period – however, they may be less benevolent. Nevertheless, before you criticize me for not caring about the poor, I remind you that governments are inherently inefficient (that is a whole other article right there) and artificially forcing benevolence is not economically sound – not to mention it encourages tax evasion. We do not need the government telling us to give money to the poor because that is not the purpose of our government. Americans have their own way of giving to the poor – remember the tsunami? We showed the world that individuals in our country were willing to help those people affected halfway around the world – without the government forcing us to.

Graduated income taxes are no different from welfare. Of course, once you have hordes of people dependent on the government to establish a higher standard of living for them, you inevitably make people mad when you have to take it away. The problem is not the flat tax; the problem is that those who have been paying less than their share. Think of it this way – we all get one vote; we all pay one tax rate.

I will never win an Olympic gold medal in the 100-meter dash because I am not very fast. Should they allow me to start 3/4 of the way to the finish to make it even? This would be stupid and yet somehow people tell us that it is not fair that some make more money than others do. Life is not fair.