Tax Collections: Making Hot Dogs Out of the Cash Cow

Written by Chuck Gruenwald on February 15, 2014

Despite having a common name, two hot dogs with similar ingredients could literally have nothing in common. Each individual vendor may have their own way to grow and/or process their contribution to the finished product – especially the meat. While some meat processors will turn out a kosher hot dog in all its tasty kosherness, other vendors resort to filling their dog with could be described as old tires and parts of the cow that even the cow is ashamed of.

The political differences between collecting taxes – or to use a word that politicians are quite fond of, revenue — are just as varied as those two hot dogs.

Obviously, there are high taxes and low taxes. A high tax does not have to be one big tax on just one good or service, but a bunch of small taxes on multiple items; these small taxes eventually reach the equivalent of one giant tax. This process is best described as the discount hot dog with the various, random ingredients. As these taxes are piled onto each other, they act as artery-clogging sludge. This results in taxpayers having to slow their spending.

In a strange way, there is almost a level of creativity used by politicians and bureaucrats in finding ways to pick every possible tax dollar off of the carcass of the proverbial cash cow.

Back in the eighties, the city of Chicago started mailing tax collection letters to city residents who had purchased vehicles outside of the city, since the city tax on cars and trucks was – and still is — higher than the outlying municipalities. After a lawsuit had worked its way through the courts, the final decision was that vehicle taxes should be based on the address of the buyer, not the seller.

Another form of tax collection here in Illinois is the municipal windshield sticker. Although still widely used, some cities and towns, such as Vernon Hills and Wheeling, have abandoned this practice, since the cost of enforcement almost negated the amount of money that these stickers had brought in.

As bad as taxes are in Illinois, at least there are no municipal income taxes. Many cities and states have been taxing visiting athletes for years; this practice has obviously created a small industry for accountants who have to sort through the whereabouts of their clients in order to pay all sorts of random taxes. However, these taxes may also apply to other individuals who live or work outside of these taxing bodies, but occasionally have to venture inside to do their jobs.

“Kosher” taxes are different, since they are not as restrictive on taxpayers. They are designed to bring in as much revenue as possible – without creating unnecessary hardships for taxpayers.

When the Laffer Curve is the subject of discussion, there are pro-tax politicians who claim that it is a discredited relic from the Reagan Administration. Unfortunately, the true nature of the Laffer Curve has not been honestly explained by these people – and even by some who believe that restraint is a necessity when tax increases appear as a quick fix. The Laffer Curve is little more than finding that “kosher hot dog” – the tax level that taxpayers are not only comfortable paying, but also brings in the maximum amount of revenue.

The vehicle sticker example shows that sometimes the bureaucracy needed to collect a tax may cost as much as the tax revenue that is brought in. Also, the added burden of having to hire tax professionals to determine where any local income taxes may or may not exist creates an extra “tax-upon-a-tax” for the affected taxpayers.

Another lie that the pro-tax politicians like to perpetuate is that those who disagree with high tax hikes do not want to pay any taxes. Once again, many low-tax politicians fail to negate this charge. Yes, taxes are necessary. The problem that many taxpayers have with taxes is that they realize that their money isn’t spent efficiently by other people.

According to the story that I’d heard, the reason why ketchup should not find its way onto a hot dog is because it hides the flavor of bad beef – kind of like the excuses that are intended to make a tax hike more appealing.

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Born in Chicago and raised in northwest suburban Cook County, Chuck Gruenwald developed an unfavorable opinion of machine politics quite early in life. In addition to cars, electronics, law enforcement, and politics, Chuck enjoys writing, and is also a horse racing fan. He has recently written op-eds for