Words Matter: Taxes

You may have noticed I preferred the use of the term “death tax” when I posted about estate taxes. Because it is a tax looking upon death as a taxable event.

Here’s another term I prefer: “Bush tax rates”. They were tax cuts 9.5-years ago, when they cut the Clinton tax rates down. I am tired of them being referred to as tax cuts now, as if the higher Clinton rates were the natural level of taxes. No, if the rates go back up to the old Clintonian levels that’s a tax hike, not “letting tax cuts expire”.

“Payroll tax”. It’s just an income tax like all the rest. Sure looks like a tax on income to me. And the worst part of it is that half of it is hidden from the person being taxed [unless you’re self-employed]. I wish all federal taxes that are applied on one’s paycheck were just rolled into one item, including any employer portion of that tax [ok, that part can be separate, to make the math easier to go from gross to net]. I hate hearing that half of people don’t pay income taxes, as that’s a lie — every wage-earner over a certain amount is paying income taxes, but they’re calling it payroll taxes. I hear there’s a deal to temporarily cut those, but we will see what passes. Unlike continuing current tax rates, it would be a real tax cut.

Finally, the evil “tax refund”. I prefer the term “you’re-getting-your-own-money-back-because-you-overpaid-during-the-yeat-and-if-you’re-happy-for-a-huge-refund-you’re-a-real-idiot”. Also, the only well-deserved boo hiss to Uncle Miltie for inventing tax withholding. To be fair, if he hadn’t invented it, some other bureaucrat would have.

A FAR SMARTER MAN ON THE SAME SUBJECT: Thomas Sowell on tax rhetoric

About Meep
Meep is a member of the Irish Catholic mafia, having a suspiciously high number of green-eyed, red-haired friends. While she doesn’t have red hair herself [except when she goes into the sun (rare for any vampire)], she does have green eyes. She’s a raving Papist and is a life actuary on the side [i.e., she counts dead people]. An amateur pain-in-the-ass [willing to go pro!], she likes covering retirement, mortality, math, and education issues.

4 Comments on Words Matter: Taxes

  1. A small nit-pick concerning the half that don’t pay income taxes. I don’t know the exact percentage, but I would say a majority of them are in fact not paying income tax, even when you include payroll taxes. Yes, money is deducted from their paycheck each payday for payroll taxes, but come April 15 of the next year, they get it all back and then some with the Earned Income Credit. Max EIC was just shy of $6,000.00 last year. One of the rationales for EIC was to cover low wage workers’ payroll taxes.

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  2. If that’s the case, then fine. But it was never made clear to me. [not everybody of low income gets the EIC, of course.]

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  3. Nearly half. How many of those will definitely vote for the Democrats ?

    It’s the Randian Moocher – Looter symbiosis: Democrats buy moocher’s votes with promises of free Other People’s Monies. It’s a win-win for their ‘team’.

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  4. Here’s my least favorite tax term – “Tax deduction (or credit)”. It’s not a deduction for those who get it, it’s a tax on those who don’t.
    Mortgage Deduction = Renter’s Tax
    Child Deduction=Childlessness Tax
    and so forth

    Another opinion of mine, there should be only one tax. I don’t care what you tax, but all revenue should be raised through one method only. Say personal income tax, for example. People don’t truly realize how badly they are being taxed, because they are paying it 50 different ways, 40 of which are invisible to them. I know, impractical. But just think how quickly the movement to lower taxes would catch on if a person with a 50k income paid 75% income tax. The total tax hit would be the same as now, but they would feel it all at once instead of in the form of lower wages, higher cost of goods, and so forth that are passed on to them.

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