Kill this Monster

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MustangPokeFan

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#1
April 17th, 2007
by Paul Greenberg

Ronald Reagan said it back in 1983: "Our federal tax system is, in short, utterly impossible, utterly unjust and completely counterproductive [it] reeks with injustice and is fundamentally un-American it has earned a rebellion and it's time we rebelled."

But what politician would rail against the country's irrational, insufferable, infernal Internal Revenue Code today, except perhaps for ceremonial purposes? Some in Congress have made distinguished careers leading the innocent and unwary through its byzantine ways and byways, occasionally constructing secret passages to favor the special interests they represent. Whole industries like accountancy and tax law have been built on it.

This republic, which was born of a tax revolt-indeed, several of them-has lost touch with its roots. We have become inured to the injustice and, even worse, the unknowable intricacies of the tax system so that complaints about it sound more like ritual than indignation.

Most of us don't object to paying our taxes-living in the United States of America is not only a privilege but a great bargain. What we object to, or should, is how hard, how complicated, how expensive and sometimes just plain hopeless it is to figure out how much we owe.

Awash in a sea of paper, or maybe in an ocean of electronic impulses in this internetted age, the American taxpayer needs HELP!!!

Every new sweeping tax law Congress enacts-always called a "reform"-makes the job even more complicated and, if possible, more confusing. And the tax code longer.

One such grand reform, makeover and general overhaul was enacted in 2001. It included 441 changes in the tax code. Just one of them-about how to claim a tax rebate if you didn't get one that year-generated a million errors on that single line of people's returns.

The country's tax code has grown as indecipherable to the average American as Hammurabi's. It might as well be written on clay tablets.

Even the length of the Internal Revenue Code is a matter of debate, with estimates varying widely. According to the U.S. Government Printing Office, it's 13,458 pages long and available in 20 volumes ($974, shipping included), but that doesn't count an additional 3,387 pages contributed by Congress, available for $179. Which brings the grand total to 16,845 pages. It sounds like just the thing to keep on your bedside table if you should ever have trouble nodding off.

For the average American family, filling out a tax form has become like attacking a puzzle to which, often enough, there is no right answer. But we're all supposed to swear, on penalty of perjury, that we've done our best to find it. It's enough to take the bloom out of April even in these dogwood-blessed latitudes.

What to do? Don't mend it, end it. Abolish the tax code and start all over. Think about it: Would anybody starting from scratch come up with a system as arcane and counter-productive as the one we've got? So why not opt for a clean break with the past?

Yes, abolish the Internal Revenue Code and begin anew.

But would that be fair? Well, one thing this current complex, loophole-riddled tax system isn't is fair. Even a flat tax, if it didn't start till incomes reached, say, $30,000 a year, might be fairer than the monster we've got on our hands now.

Put this thing out of its misery and ours. At a time certain. Say, December 31, 2008. The government would have until then to come up with a simple, fair substitute.

Too much to ask?

To rephrase a thought from Dr. Johnson, nothing so wonderfully concentrates the mind as the prospect of being executed. Kill the Internal Revenue Code, and the way to create a simpler, fairer system might become clear to all those politicians, bureaucrats and other unimaginative types who now say it just can't be done.

We'll be told that now is no time to fiddle with the tax system, not with the economy humming along.

And when the economy slows down, as it will sure as there is a business cycle, we'll be told that now is no time to fiddle with the tax system and risk a recession.

It's hard to crack the wall of inertia out there. How many years have I been writing essentially this same column on Tax Day? I've lost count. The only change? The tax code grows longer and more complex.

There will always be an excuse for doing nothing about taxes. But abolish the old tax code on a date certain, and you can bet the politicians in Washington will get busy devising a new one. They'll want to get paid, won't they?
 
Nov 1, 2004
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#2
Now whether a flat tax would be more fair than a progressive tax is a different issue than we were discussing a couple weeks or so back. Then we were discussing whether a flat tax would reduce complexity ... and I feel very comfortable with my view that it would not by any more than a miniscule amount ... for the reasons stated at that time.

The fairness question is much more subjective ... turns on philosophy of the individual and the collective society. You'll find millions who will argue a flat tax is more fair and millions who will argue a progressive tax, say to the level of progressivity we currently have, is more fair. As for me, I'm fine with the current 35% top fed rate. Politically, I see pressure building to raise that 35% up to about 40%, something I hope doesn't happen.

Color me a centrist ... in the sense I'm arguing to hold the line from political movement to the left. On matters of taxation, we moved to the right over the past 25 years ... reducing top end individual rates and overall corporate rates. I'm concerned we could move to the left for a decade or two, something I think would be bad for our economy and our country.

Tidbit ... 5 objectives of taxation as stated by policy makers thru the years ... (1) fair (2) easy to comply with (3) raise appropriate level of revenue for the fisc (4) allow our businesses to be competitive in worldwide business (5) be neutral as to capital investment decisions.
 
Jan 17, 2006
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#4
The "progressive" scale is not complicated at all. It's really easy to understand, and it requires no computations because there are charts that spell it out easily for you. The complications come from deductions, exclusions, exemptions, credits, and all that nonsense.

A "flat" tax, for all it's other problems, would not be any less complicated because the confusing question is always how much of your income is subject to taxation, and that problem will continue to cause confusion for year. The only thing a "flat tax" would solve is it would stop people and businesses from shifting income to stay in lower tax brackets, but it causes many more problems such as how high the rate would have to be to create the same revenue. Current projections of a 30% would not raise nearly enough revenue.

Also, read the Reagan comments in context at the time. Before the tax reforms of the 80's, the highest tax bracket was 70%. It was, and still is outrageous, and that is what Reagans harsh language was about. Reagans top tax bracket was 35%, and todays highest is 36.5%, so it's not like we're under some outrageous rates like we were back then.

The solution is not a "flat tax", but a simplified tax code and simplified exemptions, exclusions, and deductions.
 

Pokefan

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#5
Some of the Data I've seen Shows that the FAir TAx is anything But Fair.

Roughly from a seminar I attended two weeks ago.

In essence a Sales tax is THE most REGRESSIVE tax of all.

The biggest part of the tax burden will fall ont he folks who can least afford it. The Bottom half of the Tax base, the folks who earn the least and spend the biggest portion of their income Every paycheck will pay the highest percentage of taxes. The folks who earn the most but spend the smallest percentage of their income will be taxed the least percentage wise.

since the Fair Tax proposal includes Services, ishudder tothink of the Taxes a person would pay on a big legal bill or a major medical bill from a hospital.

Insurance won't cover taxes on a bill. so now we would be taxed 10-12k on a heart surgery. Cannot work had surgery and get hit with a tax bill. Nice. nothing fair about that.

The poorest segment of society bearing the major brunt of the tax is by no means fair either.
 

Pokes28

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#6
The poorest segment of society bearing the major brunt of the tax is by no means fair either.
You are correct on that. However I do think that everybody should pay taxes. When you have a group of people that not only don't pay a dime of income tax, but also get money back on earned income tax credits. There is a problem.

I know that the way I think about economics and the government's wealth redistribution is out of whack with most everybody else.

I'm all for helping people that are striving to do better. But if a person is content being a low income person and not doing things to improve their station in life, I don't see why we should have to pay them to be Americans. That is what we are doing right now with the current system.

I'm for a tax simplification. I don't know if it is a flat tax, the fair tax, or a sales tax. I just know that I want people to be aware of what they are paying. You have people that are making $15,000 a year and raising a kid thinking that they are paying federal income tax. People tend to not realize what they give to the government every year.

Of course I think that our government is the biggest blight on us as a society. I'm not an anarchist as reality that means that the biggest gun wins. But our government stopped being the voice of the people a long time ago.

David Harrell - Pokes
dwh
 

Aaron C.

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Jul 20, 2005
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#8
Please read up about the fair tax.

The cost of services would not go up because the costs of those providing the service would go down considerably. For instance no more payroll taxes.

Look at buying a car for instance.

If you have to pay sales tax on that car, you think OMG, it's gonna cost me another 15% That's simply not true.

The cost of making the car, marketing the car, etc. etc. would go down. You'd be paying roughly the same price or an even lower price, with the Fair Tax in place.
 
Aug 4, 2005
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#10
I'd just be happy if they'd fix the tax forms so when I sign on the dotted line I don't worry if I forgot something.

I honestly think at times that the IRS could audit just about anyone and find something they did wrong just because the tax forms are so screwy.
 
Aug 7, 2006
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#11
I am a Libertarian so I'm all in favor of a flat tax.

However, I can't morally condone a shift to flat tax without a series of substantial hikes to the minimum wage. The minimum wage has dropped DRASTICALLY compared to inflation rates since its inception. If it had be adjusted just for inflation from its initial rate in the new deal, the minimum wage would be nearly $20 an hour.

When people working 40 hrs a week at minimum wage are well below the official poverty line, they can't be expected to get by with out substantial federal aid. I would rather see that aid cut and replaced with minimum wage hike high enough for them to provide basic necessities - say up to 9 or 10 an hour.

I think a flat individual tax rate coupled with a fairly high sales tax would be great for the economy and the IRS, but we have to find another way to look out for the working poor.
 

steross

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#12
I am a Libertarian so I'm all in favor of a flat tax.

However, I can't morally condone a shift to flat tax without a series of substantial hikes to the minimum wage. The minimum wage has dropped DRASTICALLY compared to inflation rates since its inception. If it had be adjusted just for inflation from its initial rate in the new deal, the minimum wage would be nearly $20 an hour.

When people working 40 hrs a week at minimum wage are well below the official poverty line, they can't be expected to get by with out substantial federal aid. I would rather see that aid cut and replaced with minimum wage hike high enough for them to provide basic necessities - say up to 9 or 10 an hour.

I think a flat individual tax rate coupled with a fairly high sales tax would be great for the economy and the IRS, but we have to find another way to look out for the working poor.
That post didn't sound Libertarian at all. I believe the position of the Libertarian party is to repeal the minimum wage.
 
Nov 1, 2004
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#13
Whip, I think you're an imposter. Asked you 2 months back how you could support increasing minimum wage and call yourself a libertarian ... never heard back. So ditto to what Steross just said.
 
Aug 7, 2006
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#14
That's why nobody votes for our candidates. :rolleyes: :rolleyes:

I'm strongly in favor of MANY Libertarian plans . .

privatized schools on a voucher system,
no federal income tax,
looser drug laws,
abolishing tariffs,
doing away with most privatizable government programs,
abolishing the FCC,
cutting most direct federal assistance like welfare and farm subsidies.

However, I feel that at some basic level we must ensure that our poorest citizens aren't being exploited by our richest and that people who cannot find work are provided with BASIC human necessities. I don't think anyone deserves a "free ride" and I beleive that old addage "that goverment is best that governs least". I just don't think those two facts absolve our duty to make sure everyone can eat and clothe their children.

To be honest, I'm only registered as a Libertarian to help undermine the two party system. I usually vote Democrat, but (had I been old enough) I would have voted for Perot and will likely vote for McCain or Guliani this year. If Bill Richardson can get on the Dem ticket, i'd vote for him first, but at this point it seems almost impossible.
 

steross

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#16
Yea, I was just giving you a hard time. Frankly, many of us have quite libertarian feelings but have a real hard time defending all of the positions of the Libertarian Party. I differ from them on environmental policy and some other issues. I think what today is labeled libertarian is just what conservative used to be before the moral majority and religious right exerted their influence. Goldwater would have been labeled a modern day liberal or libertarian.

You might check out Ron Paul. Although, he is a longer shot than Richardson.
 
Aug 7, 2006
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#17
I realized that my sounded a little inconsistent.

Let me be clear.

I think we need a high minimum wage so that I don't have to pay out of MY check for someone's welfare.

I think we need to replace welfare with "workfare" programs, in which those minimal government jobs which do need doing, say sweeping up at the police station, can be performed by the unemployed for basic necessities like food shelter and child care.

I know people criticize workfare with sob stories like what you see on Bowling for Columbine, but if the minimum wage could support single parents we wouldn't need a lot of it and the only peolpe involved would be those with no other options. At that point they should be grateful they aren't starving.

Libertarian hardliners fail because they appear unsympathetic and don't provide realistic solutions for dealing with poverty. We can make things more fair and create more personal freedom, but not by just shafting the bottom 20%.
 
Nov 1, 2004
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#18
Libertarian view ... keep gov't out of boardroom and bedroom. Lib's and Lib's ... libertarians and liberals often intersect (agree) on social issues (bedroom) ... but differ on business issues (boardroom). Goldwater ... conservative in what I consider the true meaning of conservative.

BTW, SC ruled 5-4 upholding ban on partial birth abortions earlier today. Alito w/majority, as expected ... Kennedy in majority. Roe Wade battle still to come. Retired Sandra Day O'Connor tending to her husband's health issues.
 

steross

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#19
I agree Goldwater is who I think of when I think of a political conservative. But, you have to admit he would not be embraced by the current "conservative" movement.