The Un-Taxed Mind – Democratic, Republican or Independent

Who could have believed it? Taxes emerging as a substantive national political issue, and is and will be centerpiece of the Presidential primaries and soon the main campaign. Now on the Republican side the tax issue threads as expectable seem to be lowering tax rates (but across the board for everyone equally because that is the only fair approach) and insuring that capital gains rates are maintained or even reduced because they will create jobs. The Democratic position is to reduce the tax rates for 98% of the public and raise it for millionaires; and to guarantee that everyone pays their fair-share. With such a small distinction you might think that it would be hard for this to be a truly significant and pivotal issue. But don’t misjudge the minor difference, it resonates well within the minds of the public particularly because it is so poorly understood or discussed; and simple and meaningless proclamations often comfort those frightened by what they do not understand.

The public faction(s) that will decide between the presidential candidates - The Independents, are thus the group to which this issue has to be leveraged. Now this presents a problem for the candidates since the Independents’ take on taxes is both unclear and disparate. They are neither represented by an unified organization or any organization for that matter, nor do they have a conformist party line agenda that is to be adhered to. The parties’ response to both their respective core groups and to the essential and important group of Independents is to date lacking any substantial value.

In their standard knee-jerk reaction, the policy wonks are casting out various tax baits to see if they can find something that lures voters to bite. This explains the plethora of tax credit proposals flung upon the media waters. Tax credits in all shapes, sizes and flavors are being mass-marketed in hopes of finding that ‘killer’ tax credit that will seize the public’s ‘must-have’ solution, the popular pandering item of the moment. Clearly whoever can put the first tax-credit app on the i-phone will dominate the election, if for no other reason than it will distract the public’s attention from seeking to actually understand the issue.

The public will be energized and mobilized by this issue because it affects everyone’s life directly and personally. And as everyone knows, if you get the tax rate right then America will be magically restored to it vibrant and vital self. Everything in America will be fine again. The world will have returned to its proper balance with America atop the financial pyramid of nations. But of course this is a politician’s shell game, a fiscal flight of fancy, and a completely disingenuous attempt at electorate deception. The tax structure will only assist America in achieving its economic goals if it is based on sound and intelligent concepts. If we rely upon the politicians, we are all lost.

So why do the politicians and the parties perpetuate their participation in this phony pandering? Because politicians know that people feel their own taxes are too high and that others are getting unfair tax breaks. The reason for this is that they believe the tax code is designed to be intentionally complex, arcane and bureaucratic to prevent the average person from comprehending it. And yes the tax-code is arcane, complex and convoluted but the larger problem is that people don’t understand even the basics of the tax structure. How then are they to comprehend the significance and value of the positions, policies and arguments that politicians are making about their respective approaches to taxes; if they don’t understand the basics. More importantly, how are they going to figure out that just understanding the structure and processes doesn’t explain how that tax system is being actively used against them?

The politicians probably don’t understand so they can’t explain it. They don’t apparently know enough to even appreciate how the tax system can be used productively to attain the very goals that they advocate. Doesn’t matter which party or orientation: Democrat or Republican; Conservative, Liberal, or realist; Left or Right; young, adult or elderly; or even well educated or ill-educated.

The tax system is a man-made process for accomplishing exactly what it was intended to do; it raises the funds required for government. But it has been tweaked, twisted and transformed into a system that does much more than that. Now it protects some interests differently than others. It assumes that old principles have been correct and are still effective when they are neither. It assumes that the crafters of the tax code (politicians and their able aides) actually understood the consequences of their decisions when they did not; and it assumes that their intentions were for the benefit of the nation and the public when there is little reason to believe that was the case.

So if taxes are important to the public in this election then the public needs to demand of politicians that they provide more than small unimportant words bytes that sound like something but which are nothing more than the blanket from a crib that comforts the frightened and insecure child. Politicians worthy of your vote should be explaining how the tax system they endorse treats everyone fairly, and why that treatment produces results. If you think they have or are doing that, then you don’t have a clue. And if politicians do present their ‘plan’, then all they need to do is put it out there and then be ready to answer the questions that follow. When the unexpected insight into their plan is brought to light then they will have to admit that they just didn’t understand.

Taxes are not really hard to structure fairly, they are just hard to be honest about. And it is not difficult to use taxes to restore America’s economic vitality, but you have to actually know what you are doing; and that is not easy.