Sushi Money

Does anybody like paying taxes?   How many of you feel a personal, moral obligation to pay the government more money so that the politicians can decide what to do with it?   Between income, business, property, personal property, sales taxes, etc… it’s hard to imagine paying more.  For goodness sake, in my state we pay personal property taxes on items we’ve owned for years and years.  We pay the same tax, albeit at a lower amount, every single year.  For the privilege of owning a small outboard motor or equipment trailer for example, we get to pay taxes on the value of those items every single year. 

But guess what?  We are going to pay a lot more taxes in the years ahead.  MarketWatch spells it out pretty clearly in 10 Reasons Your Taxes Are Going Up.   I’m not going to dive into a debate about which political party is going to raise taxes more (even though the Democrats will!), but given the economic and demographic challenges the nation faces going forward, it’s hard to see a way around it.

I’ve got a few ideas:

• What if every now illegal immigrant actually paid taxes?  Many of the estimated 12 million illegal immigrant workers thrive in the other U.S. economy- the one based on cash.  If we can find a way to implement a guest worker program or something to increase legal immigration, think of the increased revenues we could see.  Of course, some folks just call them unauthorized migrant workers…  Uh, don’t think so-  illegal is pretty accurate. But more importantly, in terms of U.S. population growth between 2005 and 2050, the Pew Hispanic Center estimates that 82% of the U.S. increase of population will come from immigration.   We’ve got to encourage the legal immigration to this country, and for every citizen paying their fair share of taxes.  Admittedly, the entitlement benefits would also increase, but right now many illegal immigrants receive welfare and education services far in excess of what is paid into the system, and that’s got to change.
• Many working adults in society are not only going to live longer, but they’re also going to work longer.  If retirement is as much a crisis as many experts predict, then a lot of folks are going to be working a lot longer in life.  Those who do work longer will pay more in taxes, and that will help fund government programs.  Of course, working longer might be better for our health anyway.  But it would be nice to have that as a choice, and not a necessity.
• Implement a national VAT program.  What’s that?  It’s the great big, gigantic tax that is placed on everything you buy, seen in Canada and many western European countries today… it’s called a Value Added Tax.  Some say it’s a regressive tax because it’s a burden carried mostly by consumers regardless of income level, and because businesses recover a portion of the VAT every year.   So the VAT is supposed to be on the excees value throughout the production, supply and retail chain.   Seems like I remember someone proposing a VAT tax to fund health care in the early 1990’s?   It may yet come.
• Start a national lottery!  Based on the success of state lotteries, PowerBall and MegaMillions, it would seem that could be a huge source of revenue.  And why not?  If the states can do it, let the Federal government sponsor a few organizations to conduct a lottery.

Honestly, I am not a fan of increased taxation.  I would rather see our resources focused on helping businesses grow stronger, and bringing more business to the U.S.  But there’s another reason taxes are going up- and that’s simply because the wealth in society is growing larger.  

A recent study showed that global wealth of rich clients grew by 12% over the past five years.  Those same assets held by investors with over $1 million dollars is forecast to grow by 50%  and hit $75 trillion by 2012.  That’s an incredible sum of money… and somebody is going to find a way to increase taxes on it.  The gap between the poor and the very wealthy is growing wider.   Many of us are still climbing the slopes, but we too will pay our fair share in the years ahead.

I don’t like paying taxes, but I accept the necessity in order to fund certain programs and benefits.  I do not favor larger government programs that require further tax increases to maintain funding.  It seems like it’s going to be a huge wrestiling match in the years ahead, especially if people think we’re going to fund a national health care program.    Is that possible?  Do you want to pay for it? What else can we do?

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