Whenever we hear a politician talk about income taxes we almost always in the same sentence hear the phrase “the rich.” And any conversation about whether or not our tax policy makes any sense seems to sooner or later come back to talk about whether or not “the rich” are paying too much or too little. Let’s take a different course today and let’s talk about how the current tax policy, the 95-year-old Federal Income Tax, is unfair to all Americans, including the not-so-rich. And to talk about the not-so-rich, we’ll use the example of our two favorite “regular guys” that we all know and love - Doug and Deacon from the awesome sitcom The King Of Queens. Let’s have another look into the lives of these two guys and think about how the system affects them.

Our regular guys have regular jobs. They’re not part of “the rich.” In fact, because they’re so regular, we’re going to give each of their families the U.S. median household income (as of 2006) of $48,201.00. We’re going to pretend that they live in the state with the average level of income taxes (which, according to my spreadsheet, would be 5.86%, something between Idaho and Indiana). Because Doug and his wife Kerry have no kids and Deacon and his wife Kelly have two kids, we’re going to average it out and pretend that each guy has one kid. And we’re going to assume that they earn their $48,201.00 evenly throughout the year, that they work every weekday, and that they get off weekends and federal holidays.

Now before we take a look at how hard these guys bust it for Uncle Sam, let’s take a different viewpoint in how we think about money. We need to begin thinking about money in the context of the amount of time in our lives we need to invest in order to earn it. For example, if your family makes $50,000 a year, it means that it takes one year of your life to earn $50,000. It doesn’t mean that your life is worth $50,000, because our worth as people is incalculable, equal, and has nothing to do with how much we make. However, if you earn this salary, $50,000 is equal to a year of your life in terms of time that you could otherwise be spending with friends, family, doing hobbies, or resting. In a sense, time really is money and visa versa.

So, if you were somehow subjected to a tax rate of 50%, another way of thinking about that would be that half of your year would be spent working to pay taxes. If this were your situation (all deductions aside), you would begin earning the money that you need in order to pay your mortgage, buy food and gas, clothe your family, etc, on June 30th. What about a 70% income tax rate (don’t laugh - it happened in the 1970’s - and the top income tax has been as high as 94% at one point)? In this case, you would be working to pay taxes until September 10th and would be able to live on what you earned from then until New Year’s Eve.

So, here we come back to “the rich.” Being as bright as you are, you already know that the 35% and 50% tax rates are associated with “the rich” and not regular guys like our pals Deak and Doug. So, let’s figure out how hard and how long these guys work and for who.

With their current household incomes of $48,201.00, married filing jointly, these guys have to pay $4,000 each in Federal Taxes. Not so bad. When you figure in holidays, these guys earn $190.52 per day and it takes 21 days for them to be able to pay their Federal Taxes. They work from January 2nd only until January 30th to do this (including weekends and holidays). Awesome! We’re all feeling Heffer-vescent!

But now they’ve got to start working to pay their Social Security taxes (you know, the program that neither them or most of us will ever benefit from). They’ll be working until February 21st to pay that. And before break time on the 21st, they’ve got to spend a couple of days working to pay their Medicare taxes. They’re finally done with that on the 26th. But now they’ve got to pay their state taxes, which will have these guys working until quitting time on March 17th. All told, they’ve spent most of the first three months of the year working but not being able to keep what they earn, at the same time that the average living expenses are going up. They get to pay their mortgages, their rising gas and electricity bills, their food and clothing (as well as for Doug’s cool big screen TV), with only the money they earn from the spring until the end of the year. And in many places, they have to work longer for the government as many cities impose hefty local taxes as well. It’s far, far from ideal but it could be worse.

But here’s how it could get worse. Anyone who watches television at 6 PM knows that these guys live in New York City. And in New York, if you want some of the things that “the rich” have - like running water and heat - you need to make more than you’d need to make in other cities. This is something the Internal Revenue Service doesn’t take into account in determining who’s rich and who’s not. So, they decide to work time and a half throughout the year, raising their family incomes to a more New York-survivable $72,301.50. Now, what happens as a result is that they’re now working more than a week later into the year (taking everything into account) just to pay their taxes.

Let’s repeat something just for painful clarity. The problem is not just that by making more money they’re paying more. It’s that by making more money and by earning more per day, they spend more days a year working for the government and less days working for money that they get to keep. And when you get to the point at which you’re spending more time working for the government than working for yourself (which can happen when the tax rate goes above 50%), the line gets blurry between being a citizen and being forced to be a servant.

And let’s suppose that Deacon’s wife Kelly gets a part-time job bringing in half the annual median salary - $24,100.50 - to help pay for the expensive gas she needs in order to drive the kids around. Now they’re working into April. Just to pay the government. The more they work, the longer into the calendar year they have to work before they can keep the money that they’re working harder to get.

And the real irony is that no matter how hard the guys work to pay the government, the government will spend even more than all of us together give it. The government maintains a annual budget deficit and our leaders have refused to pay down the $9.4 trillion dollars in debt that we owe. All of this put together means that their kids will someday be working even longer into the year just to pay down the debt that the government is creating today.

The harder they work, the longer they work for the government. And the longer they work for the government, the more the government will spend even more than they pay to it. And with the lesser and lesser amount of money they have left after paying the government, the higher and higher their living expenses rise. And hundreds of miles away, thousands of folks who look and dress like Doug and Deacon’s boss, Supervisor O’Boyle, are working all day throughout the year to ensure that the guys comply with every nook and cranny of the tax code - a set of rules that has expanded from 14 pages long in 1913 to 4,766 pages long in 2004. It’s even longer than their union regulations!! All of this may sound like an amusing plot for part of Season 12 (which sadly never came to be). But unfortunately, this is real life and it’s the way our current system works for all of us. And it works this way for all of us regardless of whether we’re “rich” or regular.

You may be thinking that their has to be a better way. And there is. We could generate revenue based on what people spend instead of what they make and in doing so, we could also capture federal revenue from everybody - including tourists and those who earn under the table - without punishing any of us for working harder or longer. It can be a win-win for the big guys and the little guys alike. Maybe Spence will think of that.

“The Values Voter”