The Jersey Teaparty

So the Tea Partiers are continuing to wave their poorly spelled placards across the United States, decrying 'big government' and demanding 'fair taxation.'

Remember, dear, it's 'I' before 'E' except after 'C'

Well, I've decided to start my own little 'Tea Party' here in New Jersey.

Because while the right-wing radicals dress up like Paul Revere and argue that the 'real' America (that great expanse between the east and west coast) are paying more than their fair share to support bloated government; the facts don't quite add up.

'Infromed' is apparently a Latin word meaning 'passionately ignorant'

If you look into it, it seems the opposite is the case.

Take New Jersey, for example. We're the highest-taxed state in the union; but we pay more than $1.50 in federal tax for every buck that's spent in our own state.

Where does the rest of that money vanish to? The vast spending sinkhole that is the Midwest.

As you might have guessed from this gentleman's sign, a 'stimulas' is a type of kosher sandwich

The middle states - the ones that house the 'true patriots' if you listen to the Tea Partiers - are actually making off like bandits when it comes to federal taxation. It's all very well them complaining that they pay too much in tax; but considering all the benefits they enjoy for that taxation, they don't pay nearly enough!

A case in point? Take Montana, where the federal government invests $1.75 of taxpayer's money for every buck Montanans actually shell out. Essentially, they're getting almost double their value; so perhaps the Tea Partiers should quit their whining (or cough up more.)

This gentleman is 'phoning a friend'; one who hopefully has access to a Miriam-Webster

Alternatively, why don't we folks on the east and west coasts start creating our own tea parties? Hell, we've got the ammunition. New Jersey's filled to the gills with wiseguys, goodfellas, guidos and gangsters (I married an Italian girl - I'm biased) and none of them should be willing to cough out dough they don't owe.

Imagine if New Jersey stopped subsidizing the so-called 'real America?' We could solve Chris Christie's budget crisis overnight (his waistline crisis might take a little longer.) Alternatively, we could cut taxation by 33% (and still be in the same deficit sinkhole we're stuck in right now)

...but have a bit more pocket money to enjoy it with.

I think Middle America should start paying what they really owe in taxes. Maybe then, the Tea Partiers would have something real to complain about; and maybe then I'd start worrying that they had a point.

Death and Taxes

Today is 'tax day' in America; the deadline to submit your tax documents to the government. This is an occasion marked by the perennial caterwauling from the right wing - many call today 'Theft Day' to represent their frustration with paying taxes.

One of the most common complaints is how 47% of American households don't actually pay any income tax; because they make too little money or qualify for exemptions or credits according to current tax law. As Fox News, with their usual impartial charm, argued:

"Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem." Full story here.

This has led to many right-wingers demanding that a 'flat' income tax be introduced. They argue that forcing the burden of taxation onto the rich is counterproductive, as the rich are the ones who apparently 'create jobs' and their wealth 'trickles down' to the rest of America eventually.

The right wing suggest that the rich and the poor should both pay an equal percentage of their income; sharing the burden equally despite this idea being completely idiotic.

There are dozens of reasons why introducing a flat tax into the American system would be an absurd idea; most notably the fact that America already has a 'stealth' flat tax.

MSN wrote an article back in 2007 that points out how - factoring in sales tax, state and township taxes and the rest of the myriad tariffs Americans are forced to pay - almost everybody in the country already pays a flat rate of about 40% in tax. Read the article here.

The second reason is slightly more complicated; based on the concept that not everybody's income is rated equally. Those on the lower end of the scale, earning $30,000 a year or so, find their unavoidable bills - like tax, groceries, gas and rent - chewing up as much as 70% of their income. Those making $300,000 a year will find the percentage of their income used to pay essential bills is much, much smaller - leaving them with a lot more disposable income.

To force poor and rich to pay an equal percentage of their income in taxes has a disproportionately negative effect on those making less. What might look like an 'equal' tax rate on paper would effectively be far, far higher on those with less disposable income, because it takes a much bigger chunk out of their effective income.

The third reason why the flat tax is a ridiculous idea attacks the concept behind it. The right wing argue that taxing the rich has a negative effect on the economy; as the wealthy 'create jobs' and their income 'trickles down' to benefit the rest of us. This is the notion behind 'Reaganomics' and is, essentially, a complete load of horseshit.

Giving tax breaks to poorer people will actually boost the economy more than tax breaks for the rich, because poor people are more likely to spend that money. Boosting the economy involves circulating the wealth back into the system. Giving tax breaks to the rich means that income is more likely to wind up sitting in a trust fund, a stock portfolio or a bank account. The rich already have more disposable income than the poor, so it's dubious to assume that giving them tax breaks would make them spend more.

Besides, there's a very convincing case to be made that the richest Americans don't pay nearly their fair share in taxes. Warren Buffett argues: "Frankly, an economy where my receptionist pays a lot higher tax rate than I do does not strike me as a just economy."

And while Republicans often deny it, evidence proves that the truly wealthy in America are already well-shielded against the taxation system. Exemptions, credits and 'breaks' provide lucrative ways for individuals and corporations to dodge what they're *meant* to be paying.

"The richest families in our country pay a lower tax rate than the people who take care of their children, or who teach in their schools, or who would put out a fire if their house were to start to burn," said Gene Sperling, spokesperson for think tank The Center for American Progress.

Another case in point? Exxon made $35 billion in profit during the latest gas crisis, but didn't pay a single penny in corporate tax in America last year.

Don't get me wrong - I'm no fan of taxation. One of the reasons I wanted to live in America was because a working couple could live within their means in the USA, whereas in the UK we barely made ends meet. I believe lowering taxes would have an enormous benefit on the economy (hence why Obama introduced a second tax refund to follow Bushes, which helped sustain the economy.)

However, I am a fan of everybody paying their fair share and this is just another example of the right wing attempting to shove the burden of taxation onto the middle and working class; who arguably pay more than enough already.

Death and Taxes...

Let's get something straight. The Republicans are not the party of 'low taxes.'

Oh, they sell themselves as exactly that and many blue collar voters fall for it.

Many angry working-class Republicans I know go apoplectic when they hear somebody is thinking of voting for the Democrats.

"Do you want them to raise your taxes? 'Cos that's what they'll do..."

But let's get something straight. For the working and middle class, it's the Republicans who have raised taxes pretty much consistently:

Ronald Reagan's 'Reaganomics' involved MASSIVE tax cuts for the wealthy, but payroll taxes for the working man actually increased.

Bush Snr promised 'No New Taxes' and immediately reneged when he hit the office.

Bush Jnr's tax cuts made rich people richer - but even if he didn't tax the middle and working classes more, his economic mismanagement has them on a tighter budget than ever before.

Basically, the Republicans have failed to make good on their 'low taxes' promise at every opportunity - but they still wheel out the same old dog-and-pony show and gullible voters lap it up.

Well, let me set the record straight. If you're voting this election on taxes alone, here's how McCain and Obama match up, according to The Tax Center, a joint venture of the Urban Institute and the Brookings Institution:

If you're in the bottom 20% of taxpayers (making less than $20,000 a year) the 'low tax' Republicans will save you just $21 in taxes. Compare that to Obama's tax strategy, which will see an additional $567 in your pockets - almost 30 times more (and real money, as opposed to less than the cost of a family sized bucket of fried chicken.)

That's in addition to a lot of welfare programs being set up to help poorer people with the cost of health care, housing and education.

The next 20% of tax payers, making up to $66,400 a year, would be given back $325 under McCain's strategy - but get an extra $1,100 under Obama's plan.

In fact, the only time McCain trumps Obama is in addressing the top 1% of American tax payers, making $600,000 a year or more.

Under McCain, they'd claim back almost $50,000 a year. Obama would actually tax them more - an average of just under $94,000.

The Break Down

The strategy is simple.

McCain knows that to keep his campaign coffers full, he'll have to extend an olive branch to the big spenders and large corporations. Nobody who makes $600,000 a year wants to be hit with a nearly hundred-grand tax hike, so it makes sense to do whatever they can to get McCain elected (including donating to his campaign.)

The smoke-screen appears when it comes to the working and middle class - including the core regiment of blue-collar, red-state voters who help keep the Republican party in office.

They get hit hard every time they vote a Republican into office - but keep doing so because of the hyth of 'trickle down' Reaganomics.

Basically, the theory that the less that rich and the big companies have to pay in taxes, the more will get filtered back into the economy to increase wages and create jobs.

The problem is - Reaganomics doesn't work. The rich don't 'trickle' their money into anywhere except their savings accounts. That's why they're rich. Corporations don't 'spread the wealth.' They might make more profits, but that doesn't prevent them axing jobs and 'streamlining.'

The fact is, poorer people feed more of their tax rebate back into the economy because they have to. Take the bottom 20% of Americans, who make just $20,000 a year. If they got an extra five hundred bucks, do you think they'd just keep it in the bank?

No - they'll spend it. On groceries, gas and utilities. If they were lucky, on vacations and summer camps. They'll use that money and it will trickle up.

Added complexity...

It's not quite as simple as I've made it appear. Obama's got some pretty silly ideas about distributing corporate profit and McCain's got some pretty practical ideas about reducing other costs - like health care.

Both of their tax-cut schemes do something dumb - they dip the country even further into debt. Obama's tax cuts land America with a cheque for $3.5 trillion. McCain, despite representing the part of 'fiscal responsibility' (another Republican misnomer), would rack up $5 trillion in debt with his plans.

Who to vote for...?

Obama's tax cuts might not mean much if the economy tanks. McCain might float your boat in other areas, like the right-to-life, national security or cleaning house in Washington.

But it's worth asking yourself when you're in the voting booth this November: If somebody offered you $1,000 in cash to vote for Obama over McCain, would you do it?

Because for 40% of Americans, that's exactly what it equates to.