T’was was the night before tax day, and all through my den, not a check stub was missing, not a pencil nor pen.
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The tax forms were stacked on my desk with great care, in hope this year’s filing would go fast and fair.
Then suddenly, on TV news, there arose such a clatter, I had to look up, to see what was the matter.
And who should appear, in his pinstriped blue suit? It was the taxpayers’ friend, the one they call “Newt.”
What was it he said, as the deadline drew near? That the rich pay too much, or didn’t you hear?
Ok, so I’d rather do anything than fill out my 1040. Even compose a bad ditty to take my mind off the unfairness of it all.
Not the unfairness of what the McCarron family has to pay, mind you. It’s a load, but we’re not complaining. Americans are taxed at far lower rates than citizens of the other Western industrialized nations. You can look it up.
What causes my annual distraction has more to do with taxes the Big Guys do not pay. Then there are the taxes they pay now, but won’t pay in the future. Not if their accomplices in Washington and Springfield succeed in bamboozling us Little Guys into thinking it is they, not we, who pay too much.
Last week this dubious claim was repeated by House Speaker Newt Gingrich, fresh back from his junket to the Far East and spoiling to show his conservative pals that he’s not “roadkill,” as one of them recently suggested.
Gingrich called on Congress to do away with all capital gains and estate taxes. This for the purpose of stimulating investment in the economy, don’t you know.
Somehow the speaker forgot to mention that this would cost the U.S. Treasury more than $300 billion over the next five years–years in which we’re supposed to be balancing the federal budget. Nor did Newt think to tell folks that two-thirds of all capital gains taxes are paid by the wealthiest 1 percent of taxpayers. Or that there is no estate tax on bequeathments of less than $600,000 (or $1.2 million for couples who divide their assets into trusts.)
“We favor very low taxes,” said the speaker, though he didn’t explain for who.
(Lest anyone accuse me of being a class warrior, I, too, think capital gains taxes should be lowered–by indexing them to the rate of inflation. Beyond that, it would be unfair to tax income earned from investments at lower rates than income earned from labor.)
Anyhow, no sooner had I recovered from Speaker Gingrich and returned to my Schedule A, than word arrived that the Big Guys in our very own state capitol also are advancing tax breaks for the mighty.
In Springfield, bills are moving forward that would cut state taxes on purchases of mining equipment, pollution control gear and aviation fuel–none of which you’ve picked up lately at the 7-Eleven. (Although, as Senate President James “Pate” Philip has suggested, since more money is needed for schools, we could extend the sales tax to groceries. A regular guy, that Pate.)
These business tax credits and exemptions are small potatoes, however, compared to the big grab being advanced by the Illinois Manufacturers Association. They’ve got a bill, versions of which already have passed both houses, to change the formula that determines how much corporate income tax is owed Illinois by companies that also do business in other states. Instead of the current formula, which factors in the size of a company’s Illinois payroll and property holdings, our state’s share would be based solely on the percentage of sales executed here. Because Illinois is a heavily industrialized state that produces more than it consumes, some of our biggest corporations would save a bundle on state income taxes.
In fact, the Department of Revenue has estimated that this one change will cost the state about $46 million the first year, and as much as $150 million in future years if companies react to the tax break by moving more sales out-of-state. Of course, the manufacturers association, echoing the supply-side logic of Speaker Gingrich, predicts the tax cut will stimulate increased investment here and, as a result, more jobs and tax revenues. (And you thought the tax-less-get-more Laffer Curve retired with Ronald Reagan.)
It is best, however, not to dwell on these things, especially if you have not yet completed your Form 1040.
Better not put it off any longer. And remember, you may no longer deduct from your taxable income the interest on your credit cards or car loans; nor your IRA contribution if you and your spouse make more than $40,000; nor your unreimbursed medical or work expenses (unless they were huge, in which case you can deduct only a piece.) You used to be able to deduct those things. Not anymore. After all, we Little Guys have to step up and help balance those government budgets . . . even if the Big Guys do not.
It’s enough to make a guy angry . . . or turn him into a bad poet.
Then Newt sprang to his limo, and to his driver gave a whistle.
And away they flew, like the down of a thistle.
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But I heard him exclaim, as he drove out of sight.
“More tax breaks for us. We’re bleeding you white.”