An Abolition of Overtime Taxes is Overdue, Part 1

* Lest you think I am abandoning my site to other writers, this week happens to be extremely busy, between teaching, school and doing a garage sale, so I hope to get back to writing every day, but in the meantime you can read these interesting posts by a friend.

I can not write on this matter without including the preface that I am opposed to all taxation in general, and the income tax in particular. That the government, to say nothing of the centralized federal government has anything to do whatsoever in regards to the transactions and trades of private industry and private individuals is, in my judgement, abhorrent.

Yet the treatment of this should be reserved for another time. For now, I will not address the general deleterious effects and immoral practice of the taxation of income in general, leaving aside, for the sake of brevity and that the specific issue at hand might be dealt with in a more ratiocinatious manner, that the income tax as a whole is both morally evil and works contrariwise to the effects intended, I will focus only on the matter of fact that in addition to taxes being extracted from the citizen by the government from the wages earned during the 40 hour work week, taxes are also ex-appropriated on whatever income the individual may earn on hours worked over 40 hours.

The entire structure of our income tax system is faulty, and again I won’t deal here with the benefits in regards to a flat (income) tax (in terms of an actual monetary amount paid as opposed to a percentage) relative to the yoke we are currently under. But that following that following the line of reason used by the lawgivers in using a progressive tax system, there should be not, or at the very least a reduced tax rate on wages earned on hours worked over 40 hours a week relative to the tax rate on the first 40 hours.

Let us begin with the assumption that one man, Peter, makes 30,000 a year, working 40 hours a week, no overtime, thats about $15 an hour. And another man, Paul, who makes 52k a year, 40 hours a week, no overtime, about $26 an hour. Under the current system the latter is taxed more heavily than the former, the logic being that Paul is more profitable than Peter, and can afford to pay more. But if Peter is ambitious, and sacrifices his weekends sometimes, and stays over late other times, and works an average of 20 hours overtime a week, he too will make about $52,000, and now they will both pay the same amount of tax, yet Peter has worked 1,000 more hours than Paul! He is not more profitable, because profit is not a matter of calculating gross proceeds, but calculating units of output per unit of input. To tax wages earned on overtime runs contrary to the logic used to establish the progressive tax system, that the tax system should be lenient to the poorer masses, and tax the rich more heavily. In this case, I doubt anyone will contend that 52k constitutes being rich, but the gist of the matter is the same, and the only conclusion that can be made is that those in power do not intend to actually help the poor by raising them out of poverty, or even to allow the poor to lift themselves out of poverty, but only to make the poor more comfortable in their misery, as if the legislature were demented doctor, having the cure to his patients disease, but electing not to cure him, instead tending to the patient with the aim of letting his passing from this life into the next be as painless as possible, all the while portraying himself to be ever so loving and caring, nay, for this analogy falls short, it is in fact the very drug which should ease the patient’s pain in dying that is actually causing him to perish.

If anyone in government would seek for the betterment of the poor, nay, of the entire population (and we shall reach this point below), he should, if not resort to abolishing the income tax, and if not resort to a flat tax, at the least resort to the abolition of taxation on overtime earnings. It is not only a matter of benefit to the poor in the direct sense of allowing them to keep all of what they make in overtime, for in taking a percentage, and a higher percentage at that, of the earning on overtime, the government not only takes the means of sustenance, debt alleviation, and ultimately the means of the realization of the American Dream, but also takes the incentive to work overtime, and inso doing snuffs out, to a great extent the Dream itself.

Again if we look at the income tax system as a whole, the same line of logic used therein should lead us to the conclusion that taxation of overtime wages should be abolished, thus labor resulting in X amount of earnings is taxed more leniently than the same amount would be taxed if it were earned through investment dividends or capital gains. The reason is clear in the language of our tax code, I refer here to the fact that revenue from dividends and capital gains are, in the tax code, classified as “unearned income”, the implication being that labor requires more exertion than wise investing, and thus justifies a higher rate of taxation, thus it follows that revenue earned through working more hours, more than 40 hours a week, should justify, nay, necessitate less taxation, but of course I argue for non at all.

The reason I say none at all instead of merely a lower rate on overtime earnings is that a man can get by on 40 hours, (as is implied by the setting up and periodical increases in the minimum wage laws) and that it is only in pursuit of bettering oneself and his family, in pursuit of the American Dream that a man will work more than 40 hours. Thus if a man can sustain himself on 40 hours a week, it should follow that the government will also be able to sustain itself on the revenue it expropriates from people on 40 hours of work a week and nothing more. And because the Government is, at least in a certain sense a non profit organization (perhaps only in the most idealistic cognition) It has no reason to seek more than what is required for its maintenance. For government, there is no reason to go the extra mile, or to take more than what is needed, we do not have a royal family who has a thirst for jewels and a hunger for fine palaces, Taxation on money earned for 40 hours a week should contend our rulers whom we elect.

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