Monday, November 3, 2008

Taxing the Middle Class Into Oblivion

This article was originally published at on Oct. 3rd, 2008.

A friend of mine, Jon, initiated a conversation with me the other day. He wanted to tell me a story. You see, he had recently received his property tax bill. Of course, his taxes had gone up. It seems the government had his house appraised and felt it was worth more than it had been last year. Never mind that his neighbor´s homes that have been for sale haven´t been selling, except those that were sold at bargain basement prices. Never mind that his neighborhood has half a dozen abandoned homes, something of a recent phenomenon. That didn´t matter to the county government who assessed his property and levied those taxes. They base their judgments on something other than reality. After all, Jon is still living in his house, but apparently on their land. They want their yearly tribute and they couldn´t care less what the reality of the neighborhood is, or what the reality of his financial situation is.

Jon called the local agency in charge of extorting money from the area peasants and lodged a complaint. He wanted to know why they were demanding so much when property values had obviously gone down. They told him they felt the value of his "land" had increased due to their hard work to make sure the area maintained the amenities that buyers in the real estate market would look for when shopping for a new home. Never mind that those buyers are now more or less non existent. Jon asked what they would say if he hired an unbiased assessor to assess his property to prove that its value had fallen precipitously. According to Jon, the agency flunky who had answered the phone laughed into it and told him that his taxes would never go down. He explained that they needed his money for their schools, and roads, and police, and fire department, etc. and that his taxes were destined to increase in perpetuity. This left Jon fuming.

Jon proceeded to go across the street to a neighbor´s house where a group of five men had already gathered. They were drinking beer and talking amongst themselves, as sometimes neighbors around here still do. Jon brought up the issue by asking these neighbors of his if they had gotten their tax bills. This opened up a can of worms as he quickly found out that all the neighbors had indeed received notices telling them their houses were worth more than they knew them to be worth and increasing the amount of tribute they needed to deliver to those sitting on the throne of county government. All six men were now fuming together. Someone actually had the nerve to mention the word revolution in a rather loud tone. He said something like "The people of this nation are going to have to have a revolution soon." This left the others speechless as they all just stood in silent agreement and contemplation for an awkward moment.

The neighborhood where this took place is inhabited by mostly blue collar tradesmen and lower income professionals. They are hurting. They are plumbers, mechanics, electricians, carpenters, roofers, computer programmers, etc. Some of these men haven´t had work in some time. Others have had less work than before. Others have been working without raises for years. Meanwhile, their costs have gone up. The cost of electricity and gas for heating has gone up. The cost of gasoline, as everyone knows, has gone way up. The cost of food has gone up. But most of these men have had no corresponding increase in their income, or are making even less than they were a few years ago. Take this into account and it´s little wonder why there´s a mortgage crisis going on. Then, to top it off, the government, those who claim they want to represent and help the little guy, the individual, the government goes and assesses even more taxes to an already financially overburdened middle class. Is it any wonder such talk is becoming common? Those in government, at all levels, prove time and time again they don´t care about you or me, they only care about themselves, their power, and taking our money.

Unlike business, the government doesn´t talk about scaling back. They don´t talk about decreasing salaries, or postponing projects, or scrapping them outright, or cutting unnecessary waste from their budgets, or any of the cost cutting measures a business would have to take to stay afloat. They know people will be forced to pay for their services, regardless of whether anyone uses them, and so they continue to grow their budgets and put the cost on the common man. Now the common folk are really beginning to feel the pinch and many are becoming very angry. They certainly no longer feel represented.

It wasn´t long after Jon had finished telling me his story that I read an article online. I didn´t read much of the article, but the headline used stuck out at me. It intimated that tax payers were going foot the bill anyway, regardless of whether congress passes a bailout package or not. I saw the headline and I got to thinking, are there those who don´t pay taxes? Is someone intimating there that there are two classes of people, those who pay taxes and the privileged who don´t? Or perhaps this headline meant that the individuals pay taxes and the banks receive them? Maybe it would have been more accurate for the headline to read "Middle Class America Will Foot the Bill for Bankers´ Follies No Matter What." Whatever the case, I felt my blood start to boil. My fate and the fate of my fellow countrymen could very well be in the hands of a group of incompetent politicians and blood sucking, money hungry bankers. It just doesn´t seem right. I guess that´s what we get for letting those same politicians infringe upon our rights.

The system we have is failing. We need to let the institutions that are going to fail do just that. We need to just let it happen and have faith that we the people, not the politicians or the bankers, can innovate and adapt to the changing conditions. A bailout will simply delay the inevitable and cost more than it should. The politicians believe that the common man is stupid, that he doesn´t know what this is about and what´s good for him. They need to give the common man more credit than that. Even I realize when it´s time to stop borrowing and start scaling back so that the debt can get paid off. We need real solutions, like an infusion of sound money and banking practices into the system. It´s time to get rid dead wood and start anew. If the politicians can´t see that, perhaps we should all simply stop paying our taxes and start paying each other for the products and services we need and use. After all, they are trying to tax the middle class out of existence, perhaps we should not pay the tributes they demand and force them out of existence first.

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