We're Talkin' 'Bout Taxes?! Taxes?! (Insert Allen Iverson's voice here.)

• • My old friend Ron and I reconnected a couple of years ago on Facebook. We were inseparable, best buds in middle school before he moved away to another town. It's been neat getting to know him as an adult. He's got a beautiful family and a great life.
    
    
    It didn't take long, however, for us to learn that we come from opposite sides of the political spectrum. Neither of us have much of a filter when it comes to telling people what we really think about things. We've had a couple of spirited exchanges over the span of our Facebook friendship. I've developed an admiration and respect for the way he handles himself in debates and discussions. He listens and he is courteous. It made me realize how rare these qualities are these days--in the current national political environment.
    
    
    The other day, Ron saw an article that I shared on Facebook from abcnews.go.com about some millionaires that didn't have to pay any federal income taxes last year. Very soon after I posted it, I reconsidered and pulled it down--I've been staying away from politics on Facebook lately because I've been so frustrated. I had kind of hoped no one had seen it, but Ron was on it. Here's how it went down:
    
    
    Ron: What happened to your article??? I had a GREAT rebuttal and now it's gone???
    
    
    Me: Dude, I pulled it down. I just can't get my thoughts together on all this business. What is your rebuttal?
    
    
    Me: Every time I think I'm ready to engage in discussion, I change my mind... But I'd like to hear what you have to say.
    
    
    Me: Speaking of taxes. It's a sales tax "holiday weekend" in AR for back to school shopping. Think I'll go cash in like a big ballin' high roller! Lol.
    
    
    Ron: I had the presence of mind to hit copy before I lost it. So, [below] was the exact post that I was going to put on the article. What do you think?
    
    
    Ron: I'm sorry, but good for them. They have been smart with their money and have chosen investments that have gotten them the lowest tax burden. Do you have a ROTH IRA? If you don't, then you should. It just makes good investment sense. I myself do everything I can to pay as little to the govt as possible. What do they want to do, stop deductions for charities? That would just doom the charities. The real issue is the 46% overall that don't pay taxes. You can't vilify the millionaires without pointing the finger at them as well. Most of the millionaires enjoy the protection of the [government] and enjoy the roads they provide, but they are not taking advantage of all the entitlements that most of the others that don't pay taxes use. This is why a flat tax or a national sales tax is so attractive. A national sales tax would even get money from illegal revenue (drug dealers don't pay taxes) as this money still has to be spent. I just think blaming some people who are fortunate enough to make millions without paying taxes should be the bad guy. They should be admired by the rest of us. Don't we all want financial success?
    
    
    Me: In a perfect world, good for them. Unfortunately, wealth reciprocates wealth and poverty reciprocates poverty. Wonder how many of those 1500 millionaires that didn't pay taxes were born into poverty and climbed out to claim their tax free American dream? It is possible though--as we are constantly reminded. Highly unlikely, but possible.
    
    Heather and I both have a Roth IRA. We contribute as much as we can on our "fixed budget" every month. We purchased a new home last year in time to receive a 6000 dollar tax credit--not deduction--a credit. So I agree with part of what you said: it is wise to take advantage of tax credits and deductions every chance you get. I think we saved ourselves 10K or 12K last year alone by taking advantage of these "tax incentives." We still paid near a third of our income to the government. I also understand that the government provides goods and services for me and my family and my fellow citizens that we need. Things that make America what it is--the awesome home that it is to so many citizens.
    
    I commend the millionaires that donated enough of their money to charity to avoid taxes. (The article indicated that someone who made 2 million dollars, for example, could have donated 1 million and avoided federal income tax). Forgive me for being cynical, but I doubt that was the case very often. On the other hand, many of the tax-free millionaires paid significant income tax in other countries but not here. I have a hard time wrapping my mind around that one. It wasn't their money paying for handouts like basic medical care, food, and shelter. Let's be honest, the millionaires who did all those "smart" things with their money to avoid taxes were playing by rules that they got to write. It is corrupt--immoral. There is nothing fair or noble or admirable about it. Please tell me you know and understand that.
    
    There is no doubt, your mentality will make you and other people like you rich. Good for you. I'd like to see more people with that kind of money with a little more compassion and concern for others. I don't admire wealthy people because they are wealthy. I admire them when they use their wealth to make the world a better place. Castles, and yachts and diamond rings don't. Polo shirts and Gucci purses don't. Trust fund babies don't. Food, shelter, and basic medical services do. Clean drinking water does. Pot-hole free interstates and energy efficient cars do. Computers in public school classrooms do and qualified, passionate, well-compensated teachers do. Disaster relief funds and other emergency services do. College scholarships and the Peace Corps do. Etc., etc., etc.
    
    I'm afraid the ideological divide in this country has become insurmountable. It's not a good situation. I'm at a loss...
    
    
    Ron: I guess where we agree is that the system is hopelessly broken. Is it fair for someone to make massive amounts of money and pay no taxes? No. Neither is it fair to me for someone to make moderate amounts of money and pay no taxes. I guess that is my point. Most of the tax breaks in the tax code are there for a reason. The mortgage deduction was put in place to spur spending in realestate (though many would say it is a bad idea and encourages people to purchase homes more expensive than they should and helped cause our current economic problem). Charitable deductions encourage charitable donations and billions are given every year to organizations that do a much better job at helping the poor than the government does. The problem is when the govt does stupid stuff like making large trucks deductible for companies as "farming equipment" just to spur spending for new cars (done under Bush) or cash for clunkers which was ment to spur new car purchases and get old vehicles off the road (Obama). But cash for clunkers only artificially increased used car prices and got more people into debt that they couldn't pay.
    
    My problem is that making these 1,200 millionaires the bad guys will do nothing to fix our current problem. They are beating the system and there will always be people that are able to do that. The way we fix our problem is by getting more people to pay a share of the load. We have far too many people that do not contribute; they just take. We also need to stop spending. We need to fix entitlements and shut down parts of the govt that have outlived their usefulness. Have you ever heard of a government program that has ended? They don't. They just go on. Programs are created to fix a problem. The problem is that if they succeed, they fix the problem but don't go away. They continue. If they don't fix the problem, they continue. This mentality has to change. If it works, end the program. If it doesn't work, END THE PROGRAM and do something that does fix it. The truth is that most of what our federal govt does, it was not intended to do. Those of us that are paying taxes are asked to do too much for too many. We need to stop creating programs for what they are "intending" to do (though the intent may be admirable, i.e. Obamacare) and look at what we are truly able to do and what will be successful.
    
    Many difficult decisions are on the horizon. We have made a culture of people that live off of a few. That is not fair. We should get the govt out of the way and let people make and spend their own money. That in turn will increase revenue for the govt. For example, no one who has a TV with cable and a DVD player should be on food stamps. I don't want to pay for your food if you are spending your money on "wants" instead of "needs."
    
    Well, I could rant forever, but that would just make me late for church. Also, I due to the length of this note, I can't go back and proof what I wrote, so forgive me for typos and poor grammar. (I hate writing to you educators:)
    
    Btw, if you aren't going to church this morning, you can watch our service (I am singing) on calvarynow.com. I will be at the west campus at 11a. Have a great day.
    
    
    
    
    We ended it with some small talk and my request to publish this little dialogue on my suffering, neglected blog. He graciously and enthusiastically agreed. And he's looking for a debate. If you're interested, have at it!
    
    
    Ron's a good friend. I like having someone out there that I can talk to about these things without getting blood-spitting angry--someone who I actually like that can give me insight into what the other side is saying and thinking. At the very core, there are some things we can agree on. We're gonna have to find these things and talk about them if any of us want to have any *hope* for the future.
    
    
    Thanks old buddy. To use one of my dad's old jokes, you're alright I don't care what Dina says about you!