The Game

What do the hedge-fund manager, the welfare recipient, the union man, and the corporate CEO have in common? They all try to maximize income with minimum effort, to bend the rules to their favor as best they can, to play their respective ‘games’ for their personal benefit. And yet they all on occasion complain about the unfairness or laziness or wastefulness or power of the other. They are the same person—ignorant or uncaring of how their position looks to others, while claiming they themselves deserve all they can extract from their respective systems.

While the individual motivations are the same—to work smarter, not harder within the framework of the game they know–what those at the higher income levels know inherently is the golden rule; namely “them’s with the gold make the rules”. The more convoluted the tax code is with myriad deductions, loopholes, and rates based on income and types of income, the greater the possibility of gaming the tax system. And who is in the best position to game the system than those that ‘make the rules’—the wealthy. No wonder that there are so many union men who know their contracts by heart, so as not to remotely do anything to help the company that is not required—no wonder those on welfare and food stamps and other forms of assistance can navigate the rules, and how to maximize payouts, even if the law was not specifically meant for such a purpose. They can always look to the hedge fund guy and claim he gets away with much more—and they of course would be correct. One of the first lessons taught, unofficially, at the Naval Academy was that ‘you rate [deserve] what you get away with’. The intent implicit in the phrase was not meant to break rules, per se, but to be circumspect and ingenious in accomplishing tasks for which there was never enough time. If one achieved a successful outcome, within the bounds of honor, the action was deemed to be acceptable. It would seem that an Academy education was not necessary to learn such a lesson—all seek to extract the most favor from the least effort, but the bounds of propriety as a limiting constraint seem to have been lost or forgotten. The resulting cruder rendition of the phrase would be ‘you deserve what you can get’.

However, pitting one class against the other in an attempt to rectify the tax code is not effective; the rich and powerful always win until the pitchforks and torches come out—and I for one have no desire to go that route. Reading about the French and Russian Revolutions is enough. Living through such a cataclysm is not for the faint of heart! But what if the game we all played, the tax code game, was the same for all? Could we not devise a system that was so simple, so easy, so ‘un-gameable’, so (dare I say) fair and balanced, that no one could accuse another of unfairly using their station or status to improve their prospect through manipulation of the code? For it is this feeling that ‘others’ are receiving something which they don’t deserve is a major driving factor fomenting distrust among income groups.

First, one would expect us to agree that this government is ours—we fund it and use its services, services that we have demanded of it through our representatives. The debt the government has accrued is also ours—we cannot ignore or disavow services we have used and not yet paid for. But many seem intent to divorce what we’ve contracted for from the necessity of payment. Part of that intention derives from the apparent and real inequities of the payment (tax) system. Second, the dollar derives its value from the strength and security of our government. Is it not wise to return a certain percentage of each dollar so that the remainder maintains its value? Third, each dollar earned is worth the same—should each dollar then not contribute the same amount to our government no matter what its source? Fourth, our nation, our government is the sole entity of which we all are invested together—and is the entity which ensures all of our other interests and pursuits and investments are protected.

Given all the listed constraints and attitudes with respect to how we fund this government of ours, would it not make sense to de-game it as much as possible and institute a flat tax on all income, personal or business profit—no matter what source– above a certain generous personal/family deduction (to maintain a slight progressivity in the code)? If, for example, we all paid a 20% income tax on all income above $30,000, with no other deductions, the simplicity and transparency of the code would encourage compliance, enhance the sense of fairness, and establish a direct link between the price of government and the services we say, or are told, the government must provide. And this transparency would also aid in determining what services we no longer want or need and could be cut.

As an added benefit, just think of the legions of business lobbyists and personal tax attorneys instantly un-employed, as there would no longer be shady deductions and loopholes to exploit. Some changes are truly good.

About Monk

Schooner Captain, pilot, and aikidoka
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2 Responses to The Game

  1. The problem is that our government reps don’t often feel they work for us. We don’t write or call, let alone pay any real attention to how, and even if, they vote. Getting elected is their focus. Once they’re in, they can do as they please, because know one truly watches/cares about what they do.
    Only the real contributors – the lobbyists, the businesses, the party affiliations – truly pay attention to what their reps are doing. They have paid for the reps services and they expect gratification from those services.
    It’s far too easy to listen to sound bites and watch slanted news reports and call ourselves informed citizens, then it is to actually take an active position in ‘keeping tabs’ on our reps.
    So until we get actively get involved in the day-to-day process of government, changes are only going to be made that favor those who run the government. I plan on getting active once the white water rafting season ends… and I’m not too busy with work… and I have more time to spend with my loved ones …

  2. mikem says:

    Randy’s comment makes a lot of sense. Without citizen awareness, those who game the system can tell a credulous public just about anything they want. Hell, something like 70% of Republicans say they don’t believe in evolution; until recently something like, what, 40% didn’t believe Obama was born in the US. Plenty of Dems labor under similar foolishness.

    What would happen if a politician came along who said, “I am not here to shine your rear end. We suck right now. We need to get our damned act together. I need Americans willing to suck it up and do what’s necessary to make this country truly great again. That means, yes, giving up 10% of your social security benefits–suck it up. Abandoning the hope that you can retire at 50 and get a second career with 1.5 incomes–suck it up. Ending the idea that kids can take a four year vacation (called college) at parents’ and taxpayers’ expense.” And so on.

    Conventional wisdom says such a person would get annihilated. I don’t know. If this country isn’t ready for some straight talk, then we can truly turn the lights down low.

    And for the record the idea of a “progressive flat tax without deductions” is great, as long as we make it really progressive (eg high basic deduction–$40K?). Many super rich pay no taxes, as Monk argues, because of their army of deductions.

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