Our income tax code is a mess. And who are its biggest victims? The regular W-2 wage earners — be they doctors, lawyers, nurses, architects, plumbers, or teachers.
Why? Two reasons. First, middle-class folks have their federal taxes withheld. By contrast, Congress has largely exempted lower-income folks from paying income taxes and the rich often can be, shall we say, more creative when it comes to paying income taxes. Second, the politicians in Washington care only about themselves and the special interests that take good care of them.
Hey, don’t take my word for it — I got this from none other than the top taxwriter in Washington. A few weeks ago I attended a lecture by the current, but soon-to-be retired chair of the House Ways and Means Committee, William M. Thomas, R-Calif.
Thomas said Politics 101 in Washington is about who gets what, when, and how. And he’s right. It’s the most important reason why our tax code is a mess.
Thomas explained that some of our politicians aren’t exactly the cream of the crop of American society. "Don't think in this business that you're dealing with the best and the brightest,” he said of his colleagues. “You're dealing with the available and the willing."
For these folks, good tax policy rarely ranks high — if it ranks at all — against what each politician wants to get for his or her special interests. And the silent middle class is rarely of special interest to the politicians.
Although Thomas said his lecture was about Politics 101, it was also a class in Government 101. Every taxpayer in America should hear it, and Tax Analysts has made it easy — just click on the link below.
The process of taxwriting and the results that Thomas described have been a long time in the making. And neither the system nor the results will change until we in the middle class understand that the politicians have us pegged as suckers whom they can take advantage of in order to give tax breaks to their fat-cat campaign contributors.
I can see why the politicians think that way — they take our money out of our paychecks, and over the course of the year most of us pay more tax than we owe. Then when we get our tax refund we celebrate like we just got a present from Uncle Sam, and we go buy a big-screen TV. What really happened was that we paid our taxes, and then paid the taxes of the special interests, all the while giving the government an interest-free loan.
Thomas’s lecture will be a real eye-opener for many. It’s quite instructional. But beware: After viewing it, you may feel like a sucker.
Christopher Bergin is president and publisher of Tax Analysts.
(200 MB Windows Media Video)