As various tax-related mail begins to appear in the mailboxes of hardworking Americans across the country, it’s instructive for all of us to reflect on why we carry the burden of our government every April.
Take this morning, for instance. We can credit the “ingenuity of the markets”, and specifically the ingenuity of John Thain, for moving annual executive bonus payments by Merrill Lynch up by a month last November, thus disbursing $15 billion in executive bonuses just before closing Merrill’s acquisition by Bank of America. Fast forward a few months, and the United States taxpayer just gave Bank of America another $20 billion in newly-borrowed funds to put a band-aid on mortar wounds in Merrill Lynch’s balance sheet.
Doesn’t that make you relish the withholding from your paycheck? Seventy-five percent of the cash payment from our latest Bank of America bailout went directly to Merrill Lynch executives.
But wait, there’s more. Large companies predictably demonstrate that the best ways to embrace economic challenges are cost cutting, layoffs, and vaguely-defined attempts at increasing operational efficiency. One underappreciated source of operational efficiency is office redecorating — and in early 2008, John Thain spent $1.2 million renovating his office in Merrill Lynch’s midtown Manhattan office.
Please don’t misunderstand — I have nothing against a $1.2 million office overhaul paid for by Merrill Lynch. I simply object to an office overhaul followed by a massive transfusion from American taxpayers. Where’s my feng shui?
If you’re concerned about where your money is going as you pay taxes this April, I can think of several ways to respond. On one hand, I’d encourage you to consider the American banking system as a new national park. You’ve paid over $350 billion already, with trillions in future guarantees. In the case of Bank of America, the most recent $138 billion bailout dwarfs its market capitalization, so you own it just as certainly as you own Yosemite.
Visit the offices of local TARP-receiving banks. Enjoy a cup of coffee, admire the decorations on the walls. If you’ve been laid off, evicted, or otherwise having trouble making ends meet, you might try camping in the parking lot or on the leather couches inside.
If, however, you’ve had enough of the squandering of our nation’s wealth propping up a pyramid scheme that dwarfs Bernie Madoff’s wildest dreams, you might consider sending your Representative a message on February first. Or perhaps you can convince your Senator that it’s a bad idea to confirm a Treasury secretary who can’t even use TurboTax.
In the cold, hard light of current events, and considering that the vast majority of income tax collected goes simply to cover interest payments on a national debt created by the same banking system we are bailing out, I ask again:
Why do you pay taxes?