Tom’s Big Picture

Among some of my friends I have apparently earned a reputation of a tax protester of sorts, so I thought I should clarify my position.  My theological position on this, like so many things, is flexible in the specifics but clings to a absolute kernel of truth, ableit filtered through human error.  I am a weak theonomist I suppose, in that I see the tithe, at 10%, to be a reasonably realistic appraisal of a just rate of tax.  After all, it can’t be unjust, since God imposes it, and it is probably very nearly close to ideal since God is perfect.  This is the weak case, that taxes should be no more than around 10%.  The strong case is that God demands 10%, and so the state should demand much, much less, being much less than God.

It becomes clear at some point, I believe, that tax rates are fundamentally unjust when they get out of the neighborhood of 10%, that any takings beyond that are in violation of the higher law of self-preservation and providing for one’s family, and that men may band together and righteously resist such takings.  For the American colonists, who were of the strong anti-tax variety, this level was somewhere around 3%.

Now maybe one can argue that our economic excess production is so much higher due to the higher productivity of our economy that the government can take more without substantial harm to ourselves or our families.  But such a position also implies that the government owns us and our labor, that we are literally slaves whose production can be taken at will at our master’s pleasure.  But I will grant this as well: perhaps our mode of life is necessarily more complicated and more money is needed.  And I will reduce my claim of my right to resist to a doubling of God’s rate: the state may take 20% and no more, and perhaps I have no cause to complain, for blessed are the peacemakers who do not quarrel over small wrongs.

But whether you are as flexible as I am in allowing 20%, or share the fire-eating spirit of our ancestors who fought and bled over 3%, nearly all should agree that our current system is extremely unjust.  My effective tax rate on marginal earnings is 35%, which Obama seeks to raise to 39.6%.  In addition, though my marginal dollars are not subject to the self-employment tax, they are subject to the Medicare tax of 2.9%, for benefits that are mathematically impossible for the government to ever deliver to me as someone (for a precious few weeks) still in my 20’s.

So every dollar I earn is subject to a marginal rate of 42.5%.

Now if I am really doing what I am supposed to do as a Christian father and head of household, I do not really work for myself, but for my family, as a mere trustee of wealth for future generations.  In preparing a will recently, it dawned on me that my family business is an asset the government will value for estate tax purposes, and that it will likely be subject to the estate tax, due to the valuations presently at play in my industry.  This means every dollar I earn is first subject to a 42.5% income tax and, after I pay those taxes, on top of that is also effectively subject to a 45% estate tax, if I intend to use the dollar, as I should, for the benefit of my progeny and not my own selfish pleasure.  Oh, and if I try to leave the money to my grandchildren instead, they double-estate-tax that (not technically the estate tax, but a little thing the IRS calls the “generation skipping transfer tax”), ensuring they eat 45% of my family’s savings every 30 or so years when a generation dies off.

So the effective rate my family pays on an earned dollar is equal to 1 – (1-0.425)(1-0.45) or 68.375%.  Every dollar I earn is subject to a government levy of 69 cents.  And we call ourselves a free country?  And this is not even counting state taxes, sales tax, property tax, or even the net cost of unnecessary government regulation, or the fact that each subsequent generation who inherits will also lose 45% of the principal.  And even then, as I prepare my tax return, I am informed that I owe AMT, the Alternative Minimum Tax, you see, because I’m getting too much of a deduction for property tax and they take away the first 3% or so of my charitable deductions.  Then TaxCut tells me that they’re taking away my child tax credits, which makes me question why I ever got social security numbers for my kids (hey, if they’re not giving me a tax credit, why not just have my kids “off the grid” where they never get sucked into this system? Under Obama’s plan, they could not pay taxes for 20 years and then apply for amnesty as an illegal alien, paying a $500 fine with no back taxes.).  The red number at the top of the screen gets bigger and bigger and I suddenly start to entertain Arlington Road-style revenge fantasies.

But it gets even worse.  Unless I am a successful speculator and know when to exit the dollar (and I pray for the divine revelation to do so!), I will eventually also pay an inflation tax equal to the current federal deficit as a percentage of GDP.  Right now that’s approaching 90%, so my wealth will be diluted again by almost 50% by inflation unless I time correctly my exit from the sinking ship of the US dollar.  Exit too soon and I’m in illiquid investments like gold with substandard returns and also subject to theft; exit too late and I’m left with Dead Presidents Wallpaper.

So those of you who tell us it is our moral duty to pay taxes, I show you the reality of the Beast that is the federal government.  Unless we admit that all men are forever slaves to their governments, without any rights whatsoever, there is no moral imperative to pay taxes to this government.  For now they nearly take all there is to get.

Wisdom, however, dictates that I do pay my taxes.  Just as it would be wise to pay protection money to Tony Soprano if he ran your neighborhood and owned the police, it is sometimes necessary to pay tribute to thieves and robbers for a season to protect one’s family.   But it is not one’s moral imperative to do so, and if good men can band together to reestablish justice and run the Mafia out of town, then they should.  And if individuals of more tender conscience, who cannot abide compromising with evil, refuse to pay the tribute, they must suffer the consequences but their resistance is not sinful.

This federal government that protects the murderers of unborn children is every bit and more the moral equivalent of a criminal gang.  May God give us the courage to stand up to them one day.  Until that time, I advise you to pay your taxes and keep your nose clean.

Maybe now it is easier to understand why my best strategy this time of year is to write the check to the US Treasury, take a vacation and try not to be angry.  But please don’t tell me it’s my Christian duty to pay off these criminals.

This entry was posted on Sunday, April 12th, 2009 at 8:17 am and is filed under Christianity & the Church, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.