Letter to the Editor: Paying other people's taxes not fair to us

“The Sequester is coming! The Sequester is coming!”

Yup, Congress is in a panic over a problem they created, and many in Congress want you and me to pony up. Again.

Some want to cut only non-military discretionary funding – like Social Security, Medicare, Medicaid, education, transportation and the like in order to “find” about $1 trillion to balance the federal budget.

Instead of planning on cutting programs and raising taxes on you and me to balance the federal budget, Congress already has a known-to-them remedy at their fingertips if they will close the tax loopholes they have created since 1986, beginning with the 1986 Tax Reform Act.

According to David Cay Johnston in his exposé of tax rip-offs against the American people in his book The Fine Print, buried in that 1986 law is an itsy-bitsy piece of pork (paid for by you and me, of course!).

Lobbyists for the gas and oil pipeline industry sought and gained for their clients a special favor from Congress under the rules of “master limited partnerships” (MLP). This is the way it works.

Before 1986, gas and oil pipelines were in corporations that had to pay state and federal corporate income taxes. Along comes MLP in 1986 and, suddenly, corporations switch their gas and oil pipelines into 200 monopolies called MLPs – and Presto! Change-o!! MLPs do NOT have to pay ANY corporate income taxes.

Wait now. This gets even better.

Then, the Federal Energy Regulatory Commission allowed the newly created 200 monopoly MLP gas and oil pipelines to charge customers a tax to pay corporate income taxes, but the MLP gas and oil pipelines do NOT have to pay any of that collected tax from you and me to the state or federal governments. They get to keep that tax on us as extra profit!

This teeny-weeny loophole allowed by Congress earns the gas and oil pipeline MLPs around an extra $3 billion a year because you and I are forced to pay this “fake” state and federal tax that does not support our state or federal governments.

Among others, Calvin Johnson, a University of Texas professor of tax law, has uncovered this and many, many other such Congress-approved tax rip-offs against the American public. They publish their results through the Shelf Project, which is reported in State Tax Notes.

What does this mean for us who are forced to pay such “fake“ taxes as in the example of MLP customer charges? For Congress in its search for $1 trillion to balance the federal budget?

Add all these “little” tax loopholes, which Johnson and his colleagues have already reported to Congress, and guess what? They total at least $1 trillion without having to raise any tax rate or adding any new taxes.

Congress does NOT have to cut programs. It does NOT have to raise revenue. It does NOT have to cause panic among its members or the American public.

All Congress has to do is close tax loopholes like those that charge you and me a “fake” tax. That’s all. Just close these tax loopholes.

Let your members of Congress know this. See how they respond to a remedy they have known about all along.

Duane Pitts

Odessa