For years I have heard from people who say they either “don’t believe in,” “don’t support” or “don’t find morality” in the U.S. tax system — particularly the income tax.
Most of these folks decry the Internal Revenue Service at every opportunity and many of them have valid points; indeed, IRS collection methods and “tactics” have often been overbearing, unwarranted and downright illegal at times.
Despite these truths, I still don’t believe an outright repeal of the income tax is feasible or, for that matter, necessary. Now, before you get your libertarian panties in a bunch, here me out.
I do concede that:
- IRS collection methods are barbaric, insensitive and even lethal on occasion.
- Income taxes are too high, unfair, and — at their current level — have the effect of diminishing U.S. economic and consumer activity.
- Congress and the federal government, because of the overabundance of agencies, spend far too much tax money each year.
- Too much tax money is flat-out wasted and even stolen, but lawmakers still are none too frugal in their spending habits.
- Taxing Americans to the tune of $2 trillion a year is outrageous — that’s more money than most other governments on earth spend collectively on an annual basis.
I further concede that tax laws are confusing, contradictory, arbitrary and at times completely unintelligible, even for “experts.” That indicates — at a bare minimum — the need for the multi-volume IRS tax code to be simplified to the point where it fits on a single 8?” by 11” sheet of paper. All that paper need say is, “If you earn any income, this is what your tax rate is … period.” It shouldn’t matter if you’re Bill Gates or the lowest-paid person in the country.
Having said these things, I maintain that it is still unrealistic and a little narrow-minded to believe that in a single stroke, Congress and the president can or would simply eliminate the IRS and the tax code overnight.
In fact, there is no way that lawmakers — after being “fed” by an income tax since 1913 — would ever vote to eliminate it entirely. Forget about it.
But what about all the research “proving” that an income tax is voluntary, or illegal, or improper, or whatever?
Even if some of the very fine researchers working on this issue could convince a federal court, all of the appeals courts and the U.S. Supreme Court, that this were true, lawmakers would, in record time, simply write and pass new legislation to make it legal. Any sitting president would sign such a bill before the congressional ink was even dry. The federal government would collect taxes until the final court battle, then pass new (perhaps retroactive) legislation immediately, and not miss a single tax year. Bet on it.
So, what to do? Well, as it happens, there are other ways to make the IRS less hostile, the tax code more universally fair and the federal government much smaller.
The Bush tax cut proposal — $1.3 trillion over 10 years — is an excellent start, but more should be done. For example:
- The tax code should be made simple enough for any working person to complete at home in about five minutes, either on paper or online. Approving a (fair) universal tax rate for everyone is key and would go a long way towards getting rid of the thousand-pound giant known as the U.S. tax code.
- If Mr. Bush is serious about “local control,” his administration should immediately begin a survey of all federal agencies to find out which ones are repeated on a state level in all states. Repetitive services that do nothing but pump a little money and a lot of regulations onto the backs of sister state agencies should be downsized by a third every year until they are eliminated completely. The federal government has plenty to do just managing military, security, global trade and foreign policy affairs.
- Legislation should be passed preventing lawmakers and presidents from recreating these downsized agencies.
- All of the economic savings from these downsized agencies should be returned to taxpayers.
- Any abuse by any IRS official at any level should be immediately punished, ranging from loss of job and federal benefits to jail time to the death penalty if IRS agents illegally kill a taxpayer. This should be backed up by unambiguous, no-loophole legislation or, if necessary, a constitutional amendment.
What is left still won’t resemble the kind of pared down, sparse, frugal and weak federal government envisioned by our founders. And it won’t be as cheap as many want it to be, either.
But it will be a helluva lot smaller and, more importantly, cheaper than it is now. Smaller and cheaper equals more freedom and less centralized control, any way you cut it.
The establishment left will savage Mr. Bush and all Republicans for doing these things, but by and large the American people — flush with tens of billions of dollars more of their own money — will hail them for it.
Historians will have no choice but to recognize the stellar and unprecedented economic growth and prosperity realized by these actions.
Now that would be a “legacy.”
