Tax, Tax, Tax
I'm not here to complain about taxes being too high. I don't mind high taxes as long as I think we get value from them. We laugh at other countries having higher tax rates, but at least they get health care and longer vacations. Heck, I'd pay for that.
My two biggest requirements are that taxes be fair and efficient. Everyone should pay the same and I don't want as little as possible wasted collecting it.
I also try to walk the line between progressive and flat taxation - I do think rich people should pay more. I justify that by saying some things should cost everyone equally as a percent of their income, not as an actual dollar amount.
Property taxes might be the most efficient tax. The paperwork is only a single page and it's collected 4 times per year. Very little bureaucracy is involved.
I am a single homeowner with no kids. However, I'm not one say "I shouldn't have to pay for schools because I don't have kids". Frankly, I think everyone who has had an education should pay into education. The question is: Do property taxes share the burden fairly? Not even close.
You might say someone's house is a reflection of his or her ability to pay. That's not true. According an article in the Star Ledger, I was only making about half the average salary of Morris County residents in 2002. Then my salary went down from 2000 to 2010, and in December 2010 my company of 25 years closed it's doors and now I'm collecting unemployment, which is only 60% of 80% of my 2002 salary (since we had an 8 year pay freeze followed by two years of 4-day weeks). All this means that I'm paying just as much into the schools as the dual income family with three kids (which warrants more school construction) earning four times as much as me.
And I have no idea what's going to happen when my unemployment run out. I'm very good at saving my pennies and living poor, but property taxes are killing me and there's nothing I can do about it other than move.
During that time my property taxes more than doubled. It is currently the biggest threat to me having to sell my house. On one hand NJ is trying to create affordable housing and on the other hand they are taxing me out of house and home. Hey NJ, stop building more low-income housing and just label my house low-income and give me a tax break. Having to sell my house to buy food is one thing, but to be taxed out of my community is wrong.
Many senior citizens are in a similar boat because they are on fixed incomes and social security doesn't keep pace with inflation and tax increases. Many find themselves being taxed out of the communities they helped build. They have already paid for the schools their generation needed. The only good news that if anyone gets property tax relief, it's politically correct to give it to seniors. I'm sorry, but not all seniors need tax relief. Some are pretty darned wealthy. Don't base tax relief on age. Base it on income.
Paying for education should be based more on wealth and ability to pay, not on some arbitrary value someone puts on your property. The only way to make our current system more fair is if you based the valuation of houses on the actual selling price. I don't think I can get nearly as much for my house as they think I can. NJ needs a law similar to California's Proposition 13.
Sin taxes are just another form of sales tax which is calculated and collected at the register.
Sin taxes are ripe for abuse because it essentially is playing God by judging what we should and shouldn't be doing. But aren't we supposed to have separation between church and state? ...And aren't "sins" a church thing?
Income taxes might have been an efficient way to collect taxes in the past, but the tax code has gotten so complicated that the government can't even afford to mail out the instructions anymore. Booklet after booklet, form after form. Computer software helps, but it's not fair to ask everyone to get a computer to do their taxes. Plus it's even getting too complicated for a computer. You need an accountant. The costs of paying income tax each year is tremendous. We desperately need tax reform. It would be nice if it fit on a postcard, but I'll allow them one full page (including the instructions).
I generally think the federal income tax is fair because it's progressive, but it is so complicated that it's ripe for abuse. Rich people hire accounts to find loopholes. I heard Warren Buffet say his maid was in a higher tax bracket than he was because all his profits were long term capital gains, which play by different rules.
There is great variation between state income taxes, however. NJ is fairly progressive, which benefit low income people like me. Plus NJ's income tax has gotten a lot more complicated over the years.
I like the simplicity and efficiency of a flat tax. Pennsylvania has the right idea, but even they screw it up with local additions and loopholes. But frankly, I think the rich should pay more, so I support a progressive tax.
That said, there should be some kind of compromise. How about a "progressive flat tax"? Like everybody pays a flat 5%, but there is a big ($20,000? $40,000?) standard deduction. That deduction is huge for people like me, but the richer you are, the less you'd miss it.
Sales tax is fairly efficient - it's calculated and collected at the register, then mailed in
I think a sales tax is pretty fair - the more you buy, the more you're taxed. I also don't think food should be taxed, but you have to be careful that it doesn't become a sin tax. For example, soda is taxed. I think food should be considered food. Let me decide what to eat.
I also think there should be separate rules for big ticket items. Cars, for example. Car companies only mark up there cars a few percent. Yet NJ charges 7% sales tax. NJ probably makes more on the car than the dealer does. That's not fair. Plus 7% of $20,000 is $1,400 - that is a huge deterrent when I need to buy a car. I can barely afford the car in the first place - please don't make it harder.
Too much to list here. I have an entire website (www.EndTolls.com) dedicated to how bad tolls are. But in short, not only are tolls the worst way to pay for roads, but they are the worst method of taxation period. They waste $billions collecting it (an army of collectors are needed 24/7/365, plus it's a terrible job), they are regressive (rich pay as much as the poor, who are often trying to avoid the tolls), heavy SUVs (which tear up the road more) pay the same as economy cars, they harm the environment because they needlessly impede traffic and force poor people to secondary roads, and they are ripe for abuse (since tolls are taxation without representation).
Gas taxes are another form of sales tax, which is calculated and collected at the register, so it's fairly efficient.
The gas tax has got to be one of the fairest taxes around. Drive more, pay more into the roads. Drive a bigger car (that uses more gas, wears out the roads faster, and pollutes more), pay more. It's even a built in incentive to buy a more efficient car and drive more environmentally friendly (carpool, combine trips, etc.). It is by far my favorite tax, and frankly, I think it should be much higher. Compared to tolls, it's a no brainer.
The term "user fee" is just a way of piling on the taxes. For example, you pay a sales tax when you buy tires, plus a recycling fee to get rid of the old ones (regardless if you're getting rid of any!). And just look at the ridiculous list of taxes and fees on a phone bill. Come on - keep it simple! The more complicated it is, the more money it costs.
Park User Fees
I love the National Parks. They are National treasures. But entrance fees are going higher and higher, yet we're getting less and less in return.
On my first trip out west in 1984, the Golden Eagle Pass cost $10, there was plenty of ranger programs and the rest rooms were fairly nice. Today a National Parks Pass costs $80, yet the parks are underfunded, understaffed, facilities aren't being maintained properly, and educational programs are becoming a distant memory. It can't be a problem with taking in enough fees because more people than ever are visiting the parks - so it must be bad (political) management. Where is all the money going? I hate to say this, but if Disney ran the National Parks, they'd be making a fortune and we'd have much better services (...they wouldn't even have to build rides). Something isn't right.
I don't think the government should fence off all the best scenery and charge admission to see it.
Now I don't mind user fees, but the parks are one of the top things I'm proud to pay federal incomes tax for. But I feel "user fees" are being abused by our government. More and more they are charging us for services we used to get included in our taxes. But if I'm going to pay for every government service that I receive (aka user fee), then what the hell is the income tax for - an entertainment fee to watch Republicans and Democrats create user fees? And I worry about what fees are going to come next - the fire department asking "cash or charge" before extinguishing your house?
I want my taxes to fund the parks.
How do I say this without coming off as some kind of bigot? Half the people visiting our National Parks seem to come from foreign countries. The major crowd problems aren't from an influx of Americans, but from foreign tourists. And all they pay into our parks is $80 for a National Parks Pass (...which, to be honest, is pretty cheap, especially considering how much they pay to come here).
Why not reserve the National Parks Pass / Golden Eagle for American citizens? Sell it on the income tax return - put one of those "do you want $80 to go to the national parks" check boxes right on the form. It would say "yes, I want more of my tax dollars going to the parks and I'm willing to pay for it". And in return, they will be sent a National Parks Pass. Heck, I'd probably buy one every year whether I'm going on vacation or not just to support the parks. Then at the park entrance, charge at least what it costs to go to a movie - $10 a head (Note - U.S. citizens would still have the option to buy a park pass).