Computers Vs. Taxes

03/08/2012

$20 bills by J Kilmer

I almost bought a nice, shiny, brand new computer last night. Due to some shipping restrictions set by the retailer, this purchase has been in the works for quite some time now. I thought everything was finally squared away…until reaching the “purchase now” page and seeing that additional $78 tax tacked on to the price. Oh yeah, there’s that.

I live in Los Angeles. We have one of the highest sales tax rates in the nation. One of the security guards at work was recently telling me of a trip to Colorado and how the 2% sales tax was really conducive to spending more.

It’s all relative, and things are much, much different here at home. I moved to California from the Midwest a couple years ago and left the TV behind. Although it certainly made the relocation a little simpler, the 3.25% higher tax rate and eWaste disposal fee significantly added to the cost of the modest 32″ replacement TV I bought. By the way, you have to pay the disposal fee regardless of whether you are disposing of an old TV or not. Thinking about it, it’s rather interesting to consider how many different taxes and fees our (cash-strapped) governments collect from us. Here are some of the common ones I pay on:

-gasoline (county, state, and federal tax)
-electricity (City of L.A. Bureau  of Sanitation Charges, Energy Subsidy charge, City of L.A. Utility Tax, State of California Energy Surcharge, Multi-Family Bulky Item Fee)
-natural gas (State Regulatory Fee, Public Purpose Surcharge, L.A. City Users Tax)
-income taxes (local, state, and federal + Medicare, FICA and CA State Disability Insurance)
-groceries (local and state)
-property (built in to rent)
-phone (Utility Use tax, 911 tax, California High Cost Fund – A, California High Cost Fund – B, California Relay Service and Communications Device Fund, California Advanced Services Fund, California Teleconnect Fund, Universal Lifeline Telephone Service Surcharge)
-cable TV
-internet
-California Redemption Value ($.05 – .10 deposit on all drink cans/plastic bottles purchased)
-annual license plate renewal/registration (Registration Fee + License Fee + County/District Fees)
-smog check

Until last year, Amazon had been in a long fight with California legislators over collecting taxes. Too many “brick-and-mortar” companies complained that it’s unfair to compete with giant, online companies not required to tack on that extra charge in most states.

But don’t begin to think you are off the hook for non-taxed, online purchases. The slimy creatures in this state responsible for passing laws and regulations that ensure your freedom/rights (huh?) implemented a “Use Tax” in 1933, which makes consumers responsible for paying sales tax if the seller doesn’t collect it.

Some people may argue that this helps ensure people pay their “fair share” of taxes. But I guess what I am missing about what is “fair” is how we give and give and give and the money is misused and public employees game the system to ensure their own longevity. Some examples:

1) Some L.A. Department of Water and Power (LA DWP) auto painters are being paid $100,000+ a year (see L.A. Times link at bottom). According to the 2010 U.S. census, the recent, median HOUSEHOLD income in California has been nearly half that – $60,000.

2) “Any state or local government employee in California who commits a felony — theft, embezzlement, extortion, bribery — in the course of performing a public duty is still entitled to a pension.” (L.A. Times)

3) The public employee system is currently under fire because retirees have been found to be “spiking” their pensions. Unused sick days are being saved up and cashed in at retirement. When confronted, representatives of these former employees tend to always say the same thing: “Mr. So-and-so deserves the compensation.” Well guess what? I work in the private sector, so my bottom-line minded employer would never allow that kind of trade-off. Hell, I am officially “entitled” to exactly zero sick days every year. If I do get sick, we can work out some time off to recuperate, but it’s not set up that way. Paid sick days should be used to make sure employees can pay the bills if they get a cold, rather than being given as a bonus later on if they aren’t used up.

4) Another huge expenditure: The LAPD boasts having 19 helicopters and 1 airplane. Fourteen of those choppers are the Eurocopter AS350B2. An online search reveals that used AS350B2s range between $1.1 – 2 million each. The other four helicopters range between $325,000 – 750,000 each, also in used condition. In addition to the immense cost of owning these, it would be interesting to know how much the upkeep on a fleet of 20 aircraft costs.

So, back to that “fair share” thing again… we should all pay equally to support excess and bloated, self-serving payrolls? We should all evenly contribute to much-higher-than-average salaries and what amounts to bonuses for not getting sick twelve days a year? The thing is, even if a “fair share” could be justified logically, we all earn and consume at different levels. Thus, by nature we all contribute different amounts monetarily to the government. The rich are able to mitigate part of the income tax rates the middle and lower classes pay, so the only thing that can be fair is a flat tax rate for all.

At the same time, governments must certainly be aware that historic tax revolts have considered to be a contributing factor to the downfall of the Roman, Egyptian, and Aztec empires. So there may actually be a danger in leveling the playing field because everyone paying the same tax rate opens the door to transparent accountability.

Another issue to consider is utility rate increases used to supplement shrinking pension funds. If I make bad investment choices and the value of my portfolio falls, who is going to bail me out? NO ONE! Not that we should be putting people out on the streets, but some other agreement needs to be reached. We all know that stock markets have ups and downs and that the downs might last a long time. Raising utility rates to pay retirees, because some investment choices didn’t pan out, seems a little something like “taxation without representation.”

I have been paying taxes on a lot of things for a long time. It simply wouldn’t be to such a degree if those individuals voted in to represent the people, you know, represented the people. When it comes down to it, unions are “special interest” groups. They don’t represent the will of the majority. Their power comes from strength in numbers so, unfortunately, they can strong-arm city commissioners and councils so that auto painters, carpenters, and cabinet makers can all make in excess of $100,000 a year. Why does the Department of Water and Power have auto painters and carpenters to begin with? Don’t those seem like jobs that can contracted in a competitive bidding process?

As for this computer purchase discussed so long ago, I am off to visit Craigslist. Hopefully there I can find a nice, gently used computer with an included warranty… and no included sales tax.

L.A. Times – “L.A. catching up to Chicago in sleaze”
http://www.latimes.com/news/local/la-me-0226-lopez-roundup-20120226,0,5730418,full.column

L.A. Times – “Commit a crime, collect a pension”
http://www.latimes.com/news/local/la-me-cap-pensions-20120213,0,2131610.column

Ron Kaye – Why Your DWP Bills Keeping Going Up and Up
http://ronkayela.com/2012/02/carpenters-dwp-102732-general.html

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