The Language of Taxation Needs an Overhaul
Because of Congress' proposed health care "surtax," now is the perfect time.
Imagine, if you can — and given the likely results if cap-and-trade legislation recently passed by the House ever makes it into law, you don’t have to imagine very hard — that after paying $500 a month for utilities, your household is slapped with an increase that will cause your monthly bills to go up to $750.
How much have your costs increased? That’s obviously not a trick question; the answer is 50%.
But that’s not the language of taxation. That needs to change.
The current government spin applied to the above situation would go something like this: “Well, since your income is $5,000 per month, and your utility bills are increasing from 10% of your income ($500 divided by $5,000) to 15% of your income ($750 divided by $5,000), your utility rate is only going up 5% (15% minus 10%).”
If your neighbor tried to console you with such language and said, “What’s the big problem here?,” you’d be tempted to deck him or even her (but being a sensible person, you’d resist) — especially because (and I’ll get to this later) such an increase would force you to cut your discretionary spending by way more than 5%. Yet we let politicians get away with taxation verbiage like this all the time. This serves to make their seemingly endless designs on the contents of our wallets appear more palatable than they should.
The last time I recall a real pushback against this mathematical chicanery was in Ohio during the early 1980s. Helped along by political clumsiness, the blowback was effective enough that it should have been considered a model for future anti-tax efforts. Instead, it has mostly fallen into the dustbin of history.
But to measure the tactic’s effectiveness, all you have to do is ask almost any news-following longtime Buckeye State resident older than 50, “Who raised Ohio’s income tax by 90%?” The overwhelming odds are that they will answer, “Oh, that was Dick Celeste.”
Now, of course, Celeste didn’t take 90% of Ohioans’ income (though, given his far-left political positions, he may at some point have been tempted). Also, nobody ever said he was the brightest tactician. In 1983, shortly after winning office, Celeste, with the help of a slim majority of Democrats in the Ohio Senate, imposed a “temporary tax rate surcharge [that was] increased to 83.3% in 1983 and to 90% in 1984 and made permanent.”
Celeste and the Democrats protested that 50% of that 90% was “only” a continuation of a “temporary” tax passed by the previous administration, and that the other 40% was “only” a rate hike of a couple of percentage points.
The complaints fell flat. Everyone in the state knew that what the Democrats had imposed was a permanent tax increase of 90%. Because it was applied across the board to all rate brackets (that was the clumsiness, partially inherited from clumsy Republicans), even those who supported it had a hard time not speaking of the truly correct 90% increase.
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Tom Blumer owns a training and development company based in Mason, Ohio, outside of Cincinnati. He presents personal finance-related workshops and speeches at companies, and runs BizzyBlog.com.
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12 Comments
1. Rick:More DemocRat gibberish and double speak.
Jul 18, 2009 - 5:26 am 2. "progressive"watch:Of course I was with your to start with,Tom Blumer,but you make a powerful argument. But how many people will understand it. It has to be made short and simple,boiled down to half a paragraph and a simple one at that. Boiled down to two or three sound bites to be really effective.
Jul 18, 2009 - 6:35 am 3. kazooskibum:The Democrat Party is a criminal enterprise.
Jul 18, 2009 - 7:13 am 4. Tom Blumer:#2, you’re more than welcome to try to improve on the second-last paragraph, which was my sound bite dry run, beyond deleting “depending on their state of residence.”
Jul 18, 2009 - 7:35 am 5. D. Marti:Is “we’re screwed if obamacare passes” a small enough sound bite ?
Jul 18, 2009 - 8:33 am 6. Gozer the Carpathian:How about something like this:
The real problem with all of these tax increases is not the rate increase, but the combined total actually paid. Most of those effected are those who HIRE OTHERS, and when you penalize them who are the first to suffer if they decide to walk away?
That’s right you tax raisers out there, we end up with MORE lost jobs.
Plain and simple math people. I know I know, we purposefully made our population too stupid to figure out math but come on!
For every $100 I take in I used to pay $46 leaving me with a simple $54 dollars. But after all of these instead of that $54 dollars I’ll only get $35?! Tell me you can’t figure that bit of math out!!
Jul 18, 2009 - 8:41 pm 7. Joe C.:How “bout: “Sure the rich can afford it, but can you?”
Democratic Party = Economic terrorists
Jul 19, 2009 - 2:36 am 8. Fred Beloit:How patently unfair of Tom and you others. Don’t you understand that these are not taxes. These increases are investments in your future. Naturally, these investments, like those in mutual funds, will require you to pay administrative costs. How does 65% a year sound?
Jul 19, 2009 - 6:56 am 9. Steve:I do not care what they call it, it just means that it will cost more just to live and I do not like it one bit.
Jul 19, 2009 - 8:16 am 10. Delia:Slavery for everyone equally.
How’s that for ‘reparations’?
Jul 19, 2009 - 9:22 am 11. Jason S:We have truth in lending, why not have truth in taxation? the thing is, Dems need confusion and ignorance to advance their agenda. Everything out of their mouths is carefully crafted to obfuscate, spin, hide, and obscure the impact of their policies and to deflect blame. Where’s the transparency Obama? Where’s the mandatory timeframe for reading these enormous bills? Looks to me like transparency will be along shortly after the country has been socialized and enslaved by debt. I’m sure the 5-day waiting period will be along for more important legislation than healthcare and cap and trade, like whether or not to recognize the Armenian genocide, or whether or not to commemorate Michael Jackson. You know, the really big things that have enormous impacts on our economy.
Middle class and poor democrats – wake up!! You are being lied to and used to seal your own spot in the caste system that your elitist leaders have in store!! Upward mobility is what has always made this country great, but its opportunities are drying up by the day under this congress and this administration. I thought liberalism was all about questioning authority? It seems these days to be all about taking your govt medicine and ging to sleep. Pathetic.
Jul 19, 2009 - 11:09 am 12. keithacita:it’s time to sue the congress for it’s separate and unequal healthcare plan. congress will not and does not participate in the same healthcare system as other americans. where is the equality and social justice? it really gets me going when i think i’m paying multi-millionaire congress peoples medical premiums. why no asset testing?
Jul 19, 2009 - 5:45 pm