Taxing issues not life Or death but close to it

January 8, 2011
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I am just finishing the book “Pillars of the Earth” by Ken Follett about life in England in the 1100s, and my wife and I also have been watching the Showtime series “The Tudors” about Henry VIII.

One of the intriguing elements in both the book and the movie is the royalty’s attitude toward taxes.

Nancy, Harry, Jennifer and Barack would have loved to be in the position of royalty in England in the Middle Ages. The right to tax was “granted by God.” Taxes were brutally extracted in whatever form that value could take in order to finance the desires of royalty. Money was spent mainly on wars and royal excess.

It is interesting how similar the needs for tax revenue were then and now. In 1100, civil war was the biggest threat to the treasury. A person’s taxes were determined and collected by whichever side occupied the area at the time — kind of like elections today, except that battles instead of elections decided who confiscated one’s assets.

It seems that, then as now, people had a preference for which side took their money. But then as now, it really did not make any difference. Your money was gone and some fool in a distant place spent it on what he thought was important. Your needs were irrelevant.

In the reign of Henry VIII, outside threats such as France, the Papal States, Spain and the Holy Roman Empire were the greatest danger to the crown. If you were Catholic in England and the government was at war with the Papal States, I don’t suppose you were real happy how your money was being spent. And guess what happened if you expressed your displeasure. Does the phrase “with her head tucked underneath her arm” (referring to Anne Boleyn in the Tower of London) conjure up any images?

Centuries go by but a lot of things don’t change. I sent Sen. John Kerry’s chief of staff the play a “Man for All Seasons” about Thomas Moore. She called and asked my point. I told her to take a look at the reign of Henry VIII and the Clinton administration. If you wanted to produce the play, you could use the following cast: Henry would be portrayed by Bill Clinton, Catherine of Aragon by Hillary Clinton, Anne Boleyn by Monica Lewinsky, and Thomas Moore by Ken Starr. For the court hangers-on and influence peddlers, you would cast Congress.

I guess it would be a reenactment instead of a play, and actors would not really be acting; they would just be doing what they normally do.

My point is that, apparently, the tax wars between the taxer and the taxee are imbedded in our DNA. I have ranted and raved for decades about our tax system and will probably continue for as long as I am here. There are few things that have changed since the Middle Ages.

I don’t like a lot of what I see in unemployment benefits being paid. In England in 1100, if you could not find a job, you and your family would likely starve to death. That’s not good. They did not have recessions; they had weather-related famines.

Every time Congress extends the unemployment benefits, more people unfairly use the system. I understand the need for the system but enforcing strict punishment for people turning down jobs and being paid under the table is absolutely essential.

Many don’t like the expense of the war in the Middle East. Those who don’t can peacefully protest without fear of torture and/or death. Even better, they can vote and work to have somebody else elected. Doing nothing is also a prerogative.

If you think the IRS is bad, read about tax collection 600 years ago. The tax collectors simply came in armed and took whatever they wanted. Of course, I object to the simplicity. Tax season is brutal but back then, taxpayers needed armed knights instead of accountants.

The IRS needs controls over its actions, which can be overly aggressive. The IRS doesn’t, however, maim or kill, contrary to the scary ads on TV. Many peoples’ problems with the IRS are self-inflicted.

Our tax system is unfair, needlessly complicated and does damage to the economy. For now, the thing to do is to work within the system and strive to reform it. As you strive to reform it, you do not have to fear for your life. That has not always been the case.

Paul A. Hense, CPA, is president of Hense & Associates, a local accounting firm. He also is past chairman of the National Small Business Association and the Small Business Association of Michigan.

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