DOUBLE DIPPING INTO YOUR POCKET
By: Ed Henry
George W. Bush calls the capital gains tax "double taxation." His argument is that companies pay an annual income tax on their profits so individuals who invest in their stock should not be forced to pay a capital gains tax on whatever they make from this investment.
Have you bought a used car lately? There was a time when the original purchaser paid the sales tax on a car and that was it. No one paid the tax again and again as the same vehicle was later purchased by other people. Does Bush call this "double taxation?"
The wealthy have always schemed to avoid sales taxes. Sometimes this is accomplished by having out-of-state purchases mailed to their homes or by registering their businesses in Delaware where there is no sales tax. The State of Delaware has more registered corporations than any other state in the Union and these companies are doing business in your state as "foreign" corporations.
Even when daddy Bush imposed a "luxury tax" on things like yachts, the wealthy easily avoided this and only the little guy got stuck with the tax, causing smaller yacht sales to decline sharply. It wasnít too difficult for the rich to order their hundred foot plus mega-yachts from other countries or have the large U.S. built boats delivered to the islands or Mediterranean where they intended to occasionally use them anyway. It was just an extension of the older "offshore" deliveries where the paperwork was signed three miles out in the ocean and later became part of the reason, in the name of drug intervention, to have the territorial limit extended two hundred miles offshore, the legality of which is still in question.
It just goes on and on. Those who can afford crews of lawyers and tax accountants, not to mention yacht drivers, will always find loopholes and shelters that allow them to avoid many of the taxes theyíre supposed to pay. Even the so-called "flat tax" thatís supposed to overcome some of this will exclude the business of Wall Street and major investment in things like new factories and equipment. Can you imagine "day traders" paying a tax on everything they buy? Whatís left of America ís Middle Class will bear most of the burden and it should be called a proposed "tax on the curve."
Meanwhile, the most horrendous example of real double taxation continues unabated and ignored. The excessive payroll taxes collected for the Social Security supplemental retirement system (Federal Old Age & Retirement Insurance portion of the FICA tax) continues to produce more money than the system needs in order to pay benefits to all of the currently retired. Last year, this surplus or extra retirement money that the government spent elsewhere amounted to $86.5 billion. Thatís billion with a "b," eighty-six thousand five hundred millions.
The Bush administration, and all administrations before that, have taken this "extra" dedicated retirement money and spent it wherever they pleased. It never went anywhere except into the Treasuryís general fund where it was spent in exactly the same manner as income tax.
Do you think America's workers could do what the wealthy do? Do you think they could claim this "extra" money as "prepaid" income tax? Do you think they could get part of it back when they file their annual April 15th tax forms? Why not? It was spent just like income tax money.
Roughly fourteen percent of every workerís FICA contribution would certainly be a healthy deduction, would it not? All anyone has to do is to look at their W-2 forms and note how much of their salary was deducted as FICA (Federal Insurance Contribution Act) tax.
If the Internal Revenue people "flag" this claim, saying that they have no record of your prepayment, it would start an interesting process. First of all, no one is forced to respond to IRS questions until they receive a federal court order to do so. This means that the agency representing the federal government, the same government that stole your retirement money, would have to press for a court hearing. They would be accusing you of wrong doing. And it could open a Pandoraís Box for them.
If you chose to respond, you might tell them that there is a record and itís in your payroll, even pointing out the fact that it was spent like income tax and other facts that follow. If they then want to take you to court, theyíve opened the floodgates.
The federal judge that would be hearing the case is in the same boat as all workers. He or she not only pays the same FICA tax but also contributes to either the Claims Court Judges Retirement Fund, the District of Columbia Judges Retirement Fund, the Judicial Officers Retirement Fund, the Judicial Survivors Annuities Fund, or the Tax Court Judges Survivors Annuity Fund.
These are all entitlement programs with either surplus contributions that are robbed in exactly the same manner as every workerís surplus Social Security and Medicare (FICA) tax payments or they never held any cash contributions in the first place. At any rate, they all currently hold nothing but "special" Treasury bonds that can be redeemed only with taxpayer money or money borrowed from countries like China which is nothing more than a future or extended tax on the population. Borrowing from investors is the same as an equity loan, backed by the full faith and credit of American taxpayers.
Even the President of the United States, George W. Bush himself, in desperation to save his Social Security reform idea (a package we never did see, but heard that "everything is on the table") went to Parkersburg, West Virginia, the home of the Treasuryís Bureau of PUBLIC Debt and waved some of these backup securities in the air calling them "worthless" and "meaningless" which they are to the taxpaying public, but not to the federal government that uses them to double tax us.
Thereís almost no end to the testimony of other authorities who have said the same thing. All of which should substantiate a workerís claim to a refund.
Compounding the situation is the fact that every workerís employer contributed just as much as the worker and most of these employers would just as soon give that money to their employees instead of the government. It would make their people happier and probably more productive. This means that the hypothetical "prepaid tax" deduction could be theoretically doubled.
In short, this subject has all the makings of a class action lawsuit in which the government doesnít have a leg to stand on. The federal governmentís entire defense is masked in fraud and deception. They have pretended to "borrow" or "invest" this money, and it is a pretense in every sense of the word, especially when itís only taxpayers who can pay back this borrowing or redeem these investments.
Why on earth would we, the same people who in large part paid these taxes in the first place, knowingly agree to commit the ridiculous act of loaning ourselves our own money or invest in debt so that we and our children can pay the same taxes again plus interest?
Itís a scam and it is real "double taxation" plain and simple.
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."