The American Dilemma and How We Can Fix It

Posts tagged ‘Tax’


I can’t put up a post under this title very frequently for reasons which are self-apparent.  But as I was thinking about some of the real problems we are facing (or more exactly not facing) it occurs to me that we might be able to kill two birds with one stone (or at least inflict some serious damage on them).  Those two are our deficits and our health.  Oh, and collaterally, we also could potentially lower prices for energy and help the environment – all with one move.

And that move is that we start applying a Federal Excise Tax to all soda that is sold in the United States.

I won’t bore you with all the statistics about the long-term effects of sugar (and sugar-substitute) on our health as I’ve already bored you with that.  Let me just synopsize those earlier posts by saying that we are growing fatter and seeing an explosion in diabetes and cardio-vascular disease – in large measure because of the amount of refined sugar that we consume.

To say that this is an “epidemic” is not to coin a phrase but merely to use the terminology that the CDC and NIH employ in several of their studies.  Obviously, if you develop a nation of chronically ill patients you place an undue burden on an already overly-burdened health care system.  While the sugar that we consume in our soda is certainly not the only reason for this state of affairs, it is a major contributor to our situation.

A well thought out law is intended to alter behavior to achieve a positive result.  That is why we have traffic laws and is why we have excise taxes on tobacco and alcohol.  Driving in an imprudent manner results in traffic deaths and excess consumption of tobacco products and alcohol have serious long-run health implications.  But so does sugar consumption – perhaps ones which are even more apocalyptic in scope.

We Americans consume an average of nearly three servings of soda a day.  For purposes of this post, I am going to consider a serving to be the amount of soda contained in a typical can.  (I’d give you the quantity that contains but I don’t have any on hand to which I might refer since I don’t buy the stuff).

If you do the math, by placing a twenty-five cent excise tax on each “serving” whether that was a consumer’s purchase at the grocery store or one dispensed from a fountain at a convenience store or served with a restaurant meal, that would raise just shy of $80 Billion dollars a year.  Incidentally, that is more than the most optimistic estimates suggest could be raised by eliminating the Bush tax cuts on those earning more than $250,000 per year.  (Parenthetically, while I think that is a short-sighted proposal, I need to add that I am not someone who would be affected were that to occur).

As I said previously, a well crafted law should be written to achieve a positive result.  Hopefully, the imposition of this excise tax should reduce the amount of soda that we consume – reducing the amount of revenue we collect in the future.  But there should be consequent savings which would be achieved by lowering the number of new patients needing attention by our medical practitioners for chronic conditions who were able to avoid them by altering their lifestyles.

And, of course, how does one put a price on not having to spend a lifetime measuring one’s blood sugar or self-administering insulin?  As Grandma used to say, “If you have your health you have everything.”

All that soda has to be put in containers to make it available for the consumer to purchase.  Aluminum is one of the most energy-consumptive materials known to man – and we use and discard a lot of it.  Plastic bottles are made from petrochemicals and have their own potential health consequences.

All that energy and all that litter tied up in those little cans and bottles of effervescence.

Will the imposition of such a tax cure all our problems, economic, health, energy and conservation?  Of course not.  But it’s a better start than anything I’ve heard proposed to date – and we need to start somewhere.

We have become conditioned to think of life as disposable and those things which we acquire to be of value only until we are tired of them and throw them away for something else which will amuse us for a short while.  Maybe it is the abundance that we have enjoyed that has led to that mindset – an abundance enjoyed but received without a sense of gratitude.  We have been fortunate as a nation that we’ve gotten away with that for so long.

If we all took the time to educate ourselves on ways to better our health, we would not need yet another rule, regulation or tax from Big Brother in Washington.  But it is obvious that there are few of us who are willing to make that effort and even fewer who are willing to make the commitment to themselves.  And in that context, I think this would be one of the wisest interventions that government could bring to bear.


The Constitution, as amended four times, makes it very clear that we consider the right to vote as inherent in those Americans who meet the standards that we have set for eligibility.   No other issue in this document has been addressed and revised so many times.

Over the years we have set to strike down those rules which deny the franchise because of race, financial condition, sex and age.  We have attempted to include as many Americans in the process because it is our belief that in a republican democracy we should hear the voices of as many citizens as possible.

The governed should have the right to select those who govern.  This was the principle which caused the Boston Tea Party and which ultimately brought about our break with King George III and our becoming an independent country.

In an earlier post I addressed the question of whether meeting the current criteria is enough to qualify a person to cast her or his ballot.

In that post I posed the question, should a person who doesn’t have an equivalent knowledge of the fundamentals of American governance and our current political leaders to that which we require of immigrants seeking citizenship, have the right to vote?  Constitutionally, the answer is yes.  But is that wise or is that a good principle?

This may surprise some of my readers, but I think that the concept of restricting the vote only to those who are qualified may have a great deal of appeal to our more socially liberal friends.  How many times have you heard the argument from those who are “Pro Choice” that rules for women should not be established by men?  They don’t have any “skin in the game” – if you’ll pardon the expression.  So I think that this post will appeal to people on both sides of the social spectrum.

I started thinking about this the other day because the son of one of my neighbor’s works at a Native American casino in California.  We were discussing his responsibilities and duties with his employer when I asked the question, “Do the Indian casinos pay Federal Income Tax?”  My neighbor didn’t know the answer to that so I started to research the question.

The answer is that they do not.

Because the casinos exist on “Sovereign Land” they are exempt from the laws regarding the payment of Federal Income Taxes that the rest of us enjoy.  Why they are required to pay a portion of their revenues to the states in which they are domiciled in contravention to the principle we have established at a Federal level is an issue of some confusion to me.

In theory and I’m sure in practice as well, these are enterprises which are run “in trust” for the members of each tribe – a sort of co-operative arrangement.  The massive profits are annually distributed to members of the tribe in the form of “dividends.”

Needless to say, without the obligation to pay Federal Income taxes on their take, puts these casinos at a distinct advantage over their competitors – companies like MGM Mirage and Harrah’s.  Their cost of doing business is significantly lower.

It is precisely for this reason, more favorable tax treatment, that so many American corporations have chosen to conduct many of their operations in overseas environments with more beneficent tax laws than we have in this country.  It is the reason that so many U. S. dollars stubbornly remain overseas instead of being repatriated.  But that’s an economic argument that we’ll save for a later post.

The real question is, should the tribal elders running these operations have the right to vote for those in Congress and for President who enact and sign laws into being including tax laws from which they themselves are exempt through treaty?  This is essentially the same argument that my “Pro Choice” friends make regarding men enacting laws governing women.

Frankly, I have a great deal of empathy for our Native American brethren.  They, perhaps more than any one group, have been victimized throughout the history of this country until recently.  But clearly they do not have the same onus on them to pay taxes on their casino enterprises and that brings to mind the spirit of the Founding Fathers who believed that only the governed – those who were subject to the law – should be entitled to vote for those who made the law.

Of course, this thinking leads to a far more sinister and wide-reaching issue regarding those who do not contribute anything to American society through the payment of Federal Income Taxes – the nearly half of our population who are now in that condition.  Should they have the right to determine how much “the wealthy” or the remains of the “middle class” should pay to support them?  Should those who are contributing to society only by taking from it have the right to vote?

I leave that question to my astute readers to debate and look forward to hearing your comments.


Between J. P. Morgan Chase’s $2 Billion trading loss and the video below which I have linked for your viewing enjoyment – I guess this is a weekend to write about financial matters.

The video is from an Indianapolis news station and details their investigation into how the IRS is sending our tax dollars to illegal immigrants based on fraudulent returns in which they are claiming credits for children who live in Mexico.

This is not meant to be an indictment or statement about illegal aliens, but rather, a statement about the people who run our tax collection system – all one hundred thousand of them.

As you will see, this fraud costs the Treasury approximately $4.2 Billion per year.  But that is not the most disheartening aspect of the problem.  What is discouraging is that the IRS has been aware of the problem for years – and has done nothing to stop it.

For those who think that the solution to all our problems is enacting even more regulations, perhaps you may reconsider your position after you see how those who run the government turn your tax dollars into pesos.

Incidentally, when you click on the link you will see a popup asking whether you would like to subscribe to the site that provided the video.  You do not need to do so in order to view this piece – merely “X” out of the box.

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