All this money grabbing by federal, state and local government entities has given birth to tax havens in the Bahamas, the Cayman Islands and other places where the rich can hide their money. The General Accounting Office recently reported to Congress that thousands of U.S. corporations are not turning over to the Internal Revenue Service taxes being withheld from their employees.
Almost $58 billion is currently owed, and some corporations have flagrantly used the money to buy luxury automobiles for their executives. Furthermore, the GAO reported that the IRS. under the current administration has shifted its focus from auditing large corporations to small and medium-size ones, even though this change is less cost effective.
Another insidious method of raising money by government decree is the property tax. Housing prices have gone down over the past year or so by 15 percent nationally and almost 30 percent in some areas; nevertheless, local tax assessors continue to raise the assessments on this devalued property. Homeowners pay taxes not on the increased value of property but on the estimated total value. That means the same property is taxed over and over again annually. This is the equivalent of taxing not just the interest on a savings account but also the total savings account every year.
More and more taxes are collected annually to fund whatever pet projects local politicians can come up with, as long as the tax-paying public puts up with it. Perhaps when high taxes chase enough people out of the cities or abroad, the dwindling tax base will demand the election of "read my lips, no new taxes" officials. There is a basic irony in the fact that as more Americans are retiring to places like Mexico, illegal immigrants continue to flood in from south of the border, which provokes localities to raise even more taxes for the public services required by the newcomers.
Proponents of the "fair tax" say that imposing sales taxes on consumers is the way to go; however, lobbyists for one industry or another seem to get themselves exempted. For example, a few years ago, Florida wanted to impose a luxury tax on yachts, but the yacht-building industry managed to defeat the proposal. Their argument was that rich people would simply buy their yachts in Europe and throw Florida boat builders out of work.
'Sin taxes'
Another argument is to impose greater "sin taxes" - for example, on cigarettes. Leland Conway at WLAP's "The Pulse" loves to rail against this tax as immoral. He argues if the objective is to stop smoking, then banish cigarettes, but don't impose a higher tax on one behavior over another. Unquestionably, cigarette smoking is tied to cancer, emphysema and other fatal diseases and is partly responsible for the need for new hospitals as well as higher insurance costs. I knew a long-time smoker, who - on at least three occasions - had to avail herself of emergency helicopter service to fly her to the nearest hospital to save her life. Such medical emergencies are expensive, and state authorities have chosen the sin tax route as a sort of users fee.
