- The Washington Times - Saturday, March 3, 2007

“Let me get this straight. You’ve developed a foolproof scheme to dramatically reduce your taxes.”

“You got it. I’ve been working to perfect it for a long time, but, boy, does it work.”

“Get to it then.”

“In the old days, I dreamed of getting rich. I started my own business and worked my tail off. It was then I learned I had silent partners.”

“Silent partners?”

“Yes, the local, state and federal governments. They considered every dollar of profit a dollar of taxable income. When I realized how much my taxes were, I nearly choked.”

“But of course. When you were an employee, many taxes were hidden from you. When you become self-employed, you got hit with every one.”

“Precisely. My employer had paid half my Social Security, Medicare and Medicaid taxes. My employer paid my worker’s compensation, health insurance and other benefits. I had no idea that the total cost of employing me was roughly 30 percent more than my salary!”

“At least 30 percent.”

“Now I know that Social Security, Medicare and Medicaid eat up to 15.3 percent of my income. Add in federal, state and local and my total rate is shocking. The income I earn beyond $31 grand is taxed at 44.67 percent. Income beyond $75 grand is taxed at 47.67 percent.”

“Serves you right for being ‘rich.’ ”

“Good one. I never understood why I was punished for making more. If I generated $100 grand in income, for instance, the taxes I would pay on the first $50 grand would be roughly half as much as on the second $50 grand. The higher my income, the higher the percentage taken by my .. .”

“Silent partners? That’s the breaks in a progressive system.”

“But why not encourage people to earn more? Why not a flat tax that rewards hard work? Then people work harder, earn more and pump more back into the economy. The economy booms and the government gets higher receipts on lower taxes.”

“You’re speaking common sense, but when did common sense ever have anything to do with taxes?”

“Well, I got tired of working twice as hard to keep half as much. So I stopped working hard altogether. I started working part time. My revenue fell to half what it normally was.”

“Half! That’s no good.”

“But it was great. I got a cheap car and a cheaper place to live. I spent more time at the park. I got more books at the library. Life was better than ever. And then I got an unexpected gift from my silent partners!”

“A gift.

“Yes, a tax refund, the first I had gotten in years. Because my income was down to half, my tax burden dropped significantly. It was then that I stumbled into my tax-reduction scheme.”

“Go on.”

“According to the New York Times, the top 20 percent of income earners paid 67.1 percent of all federal taxes. But families in the bottom 40 percent paid no federal income tax — yet they still received money back from the government.”

“I’m listening.”

“That’s when it hit me. I had worked so hard for so many years. I spent thousands on CPAs, trying to minimize my taxes. But the key to low taxes was right under my nose all along: Just earn less.”

“Very clever.”

“I know it is selfish of me to earn less, bad for the economy and the government. But it is what my silent partners have encouraged me to do. Democrats in Congress will surely raise taxes — encouraging me to make even less.

“I hate to admit it, but your ideas are oddly sensible. Where to from here?”

“I’m still perfecting my scheme, but next year I hope to earn even less. Maybe one day I’ll finally earn nothing.


“We all have our dreams.”


Read Tom Purcell also at www.TomPurcell.com.

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