American Intelligence Test #12 – Fair Tax, Equitable Strain, Just Burden

One of the divisive debates distracting the American people today is the nature of a fair tax system. The Democratic and Republican parties are predictably programmed to respond in their respective views on how to tax their constituent bases more fairly than everyone else. It’s a shame that the public and the media don’t recognize the pointlessness of these hard-coded inflexible stances the parties insist are unfair to the majority of Americans. So let’s look at what the tax system characteristics are and what would be fair. From there we can determine if the tax system is fair or not; and if it benefits the wealthier upper class, the middle income class or the lower income (poor).

So unlike previous American Intelligence tests, you don’t have the same latitude of deciding what the correct answers are. In this test, you are just wrong whether you agree or not with the answer. You will still have the opportunity to fulfill Lincoln’s paraphrased adage:

• Some of us can fool ourselves all of the time, and all of us can fool ourselves some of the time, but all of us can not fool ourselves all of the time.

Question 1:   On a dollar for dollar basis of earned income, who pays more taxes under the underlying structure of the current tax plan? Who pays the higher rate?  Someone who earns:
A.      $20K       B. $40K     C.  $100K   D. $500K    E. $1M   F. $5M   G. No one

Context: One view of fair is that the burden is equal. The question you need to ask is not: Is equal the same; but rather you should ask: Is equal unbiased?

Question 2: Companies and investors cannot grow and expand under high tax conditions.
True  / False

Context: Wealth in the US has not been created during high tax-rate periods. Employment levels decline when taxes are raised.

Question 3:  Tax credits, deductions, tax exemptions, tax deferrals, and other special tax treatments reduce taxes paid by the public.
True  / False

Question 4:   Americans are overtaxed and should have their tax-rates reduced across the board.

True  /  False

Question 5:   Which of the following resulted from over-taxation?

A.      Current recession
B.      Banking financial crisis
C.      Housing-bubble
D.      High unemployment
E.       National debt
F.       All of these
G.     None of these

Question 6:  What is the most damaging aspect of the current tax system?

A.      Redistributes wealth to the wealthy
B.      Redistributes wealth to the poor and middle class
C.      Discourages investment
D.      Over taxes the public
E.       Rewards harmful financial behaviors

Question 7: The wealthy do best when:

A.      Taxes are low
B.      Regulation is limited
C.      Taxes are high
D.      Middle class wealth increases
E.       National debt is zero

You’ve crossed the finish line, now we just need to see if you were in the right race.

1:  G       2:  F        3:  F        4:  F        5: C         6:  E   7: D

Q-1: You need to see what a progressive tax rate actually entails. And progressive does not reflect the political semantic context.

Q-2: The tax-rate does not predict the success or failure of companies or individuals unless it is so extreme that it prevents the public from being able to physically survive. The problem with the US’s present economic situation is not caused by taxes or government spending, but rather by the irresponsibility of Congress to connect the two.

Q-3: These selective tax-relief items do not reduce taxes, they simply redistribute the burden to those who cannot take advantage of them.

Q-4: Before taxes should be reduced, the public needs to be responsible for what they have allowed Congress to do as their direct representatives. If you don’t like what they did, kick them out; but you still are socially, philosophically, morally, culturally, ethically, … obligated to be accountable for what was done in your name. You must fix the problem, before you can have things the way you want them to be.

Q-5: Taxation did not cause any of these, they were all caused by the lack of a requirement of taxation that accounts for the policies that did cause them.

Q-6: It’s a classic case of unintended consequences, and it’s not because the rich are taxed to much.

Q-7: The American economy is robust, dynamic, vibrant, and healthy when the broadest range of the population does economically well. The concentration of wealth is a symptom of rot and corruption; it’s as un-American a condition as its antithesis. In other words, it reflects the status of our political parties.