Tuesday, September 20, 2011

Tax Reform: Tax the Rich or Class Warfare: Isn't it all Just Politics?

Tax Reform, Tax the Rich or Class Warfare: Isn't it all just politics?

The politicians are at it again, this time in the supposed effort to reform our tax system and reduce the deficit. But it all smells like politics all over again.

One side (I'm not even going to dignify each side with their desired labels in this column) says that high income earners should pay more than the 40% they pay now. The other side claims that constitutes "class warfare". To me, it's all politics.

By framing the tax reform discussion in the way the politicians have, they have created a no-win scenario for us all. Tax reform is not about giving rich people the business. It is also not about inciting emotions by pitting different income earners against each other. Tax reform has always been and should always be about simplifying the tax structure so it is understandable, simple to comply with and is not filled with hundreds of exemptions and give-aways to special interest groups.

Tax reform is not about fairness since that is a relative and subjective concept. What is fair to one group is the goring of another group's ox. Tax reform cannot focus on what is "fair" if it is to be accomplished.

Second, for real tax reform to occur, politicians MUST stop viewing our money as theirs. What we pay in taxes is our money going to the government. The system that we fund through our taxes is the system that we elect politicians to work out and decide on, not to bring our country to crisis and stalemate as they argue over their petty positions of power. In other words, asking politicians to work on tax reform is like asking irrational people to make rational decisions.

For tax reform to work, it has to occur outside of politics which today are ruled by emotions and irrationality. As long as politicians act irrationally, then it our mistake to expect them to make rational decisions. Perhaps it is simple as realizing that we don't have the right people in Washington doing the business of our country. At least, they have demonstrated they are wrong for the job over the last 3 years.

What do you think? Let me know your thoughts and comments and join our conversation. When it comes to taxes, it is your money after all.

Bernie Greenberg

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