Saturday, February 18, 2006

Tax Compliance

This Author doesn't know if it is just him, or that certain Subjects have a periodic dating; but he possesses the tendency to run into groups of articles on some element of the economy. Today, it was about Tax Compliance. The real problem lies in the futility of the discussion, in the absence of effective Tax rates. Most Commentators cannot percieve the inadequacy of the Subject, which consitutes a Return of funds, less than half of the current National Deficit for one Year, over a Ten-year Period. Reorganization will only marginally improve the imbalance, and worthy of pursuit only if Government Spending is cut or Tax loopholes eliminated.

Tax revenues will have to be raised, both in Tax rate and in recovery, or the Government will gravitate to a total loss of all Revenues due to increased Interest rate bite from Debt. Bankers, if not Economists, will explain the value of staying ahead of the Curve, rather than falling behind it. What is the differnece between a Thirty-Year Old family man buying a $2 million home, and a Fifty-Year Old family man buying the same Property? Nothing except in the Later case, the Mortgage is very likely to have already been paid by the sale of a previously-owned home. It may seem like nothing, but the Interest on the Mortgage is likely to equal three times the yearly Income of the Thirty-Year Old. Governments can get themselves pinned by the same excesses.

The Philosophy "Make it First, then Spend it!" may have been lost in this Country, but it most assuredly should have been retained by Government. The Value of raising Taxes is obvious, though often denied: Governments can save not only the Interest expended on the Debt from Surplus financing Tax rates, but attains an equal amount which can be expended for Social Ends. Denial of this Gain comes from the Spendthrift nature of Politicians, with no One willing to allow Politicians access to greater funding. This Gordian Knot must be broken! lgl

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