Saturday, February 23, 2013

Eliminate the Tax Scam

Each year we watch a parade of politicians promising us everything in order to gain our vote. We know that most of these promises will never be fulfilled. We also know that they will blame those failed promises on the other party. I am here to talk about the promises they do keep.

We have amassed a $16.5 trillion dollar debt. We have some telling us that the debt doesn't matter. I m told it won't matter until we reach $20 trillion. At the rate of debt growth we can see this happening in at least four years. We have one side telling us that we need to stimulate the economy. We have the other side spending more and wanting to raise taxes on the rich. That same side also tells us that we need to stop subsidizing certain industries, while increasing subsidies for others. For those who are unclear, a subsidy is no more than a tax exemption on certain aspect of that business. This is done to move the businesses in certain directions.


Now let's talk about the most important aspect of tax exemptions. It has gotten to the point that it requires at least $1 billion to run for president; millions to run for lesser offices. Where do they get this money? Yes, you are right, they get it from special interest. Once in office this special interest expects something in return. It is illegal for an elected official to give favors for donations, but they do. That favor usually comes in the form of a regulation that might harm a competitor, or more likely it comes in the form of a tax exemptions. No matter if you vote democrat or republican you are aware of this.

We ask, if everyone is aware, why do they let it continue? People don't want it to stop because the government bribes them with housing subsidies. Each year the biggest tax deduction for a family is the house mortgage. This subsidy isn't just for the people, government isn't that caring. They also subsidize the housing industry just like they do most other industries. What people don't realize is that deduction is figured into the value of the house. If that deduction was removed the value would soon drop to come in line with the market evaluation.

Those on the left and right fervently fight a flat tax or a national sales tax. I suspect this is because many don't want to give up their home or business subsidy. I won't chide you for accepting exactly what you hate the politicians for giving to mega corporations. What I will do is offer an alternative. I propose that we allow only states to collect taxes. A person or industry would never pay federal taxes again. The state would then become solely responsible for all federal taxes.

As it is today we, the individual or corporation, sends money directly to the federal government. They then decide what portion will be sent back to the state in the form of grants for roads and schools. The problem lies in the fact that money always comes with strings attached. The federal government has a long history of using that money in blackmail fashion to control everything from illegal drugs, schools, and speed limits.

If all taxes were paid to the state, then the federal government would have to negotiate how much each state sends to them. I would assume there would be a flat base rate to insure the funding of our military and other services, while all other monies would come through negotiation and need.

This would completely eliminate the IRS, and that alone would be a huge savings. Of course the states would have to expand their tax collection agencies. This would be no huge burden because the state would have extra money. Some states might not have to increase the size of their tax collection agency because it would already be sufficient. Some states might choose to have a flat tax that would even reduce the size of those agencies.

Paying taxes to a single entity would greatly reduce cost for individuals and businesses. Those savings would be realized in goods and services we buy. This would also take away power from federally elected officials. It is easy to bribe one congress person to amend a bill with a tax exemption. It would be much harder to bribe legislators in every state. Money is power, and the only way we can possibly take the power out of Washington is to take their money. The federal government would find it far more difficult to strong-arm states for more money as they can so easily do with the individual.

It's time we stop using the same old playbook. We have to start thinking outside the box. We must find solutions that would make those on the right, and those who are moderately left happy. This is not the perfect plan, but it's at least different and could be a start. If nothing else it would make tax collection more efficient.

AMENDMENT XVI
Passed by Congress July 2, 1909. Ratified February 3, 1913.
Note: Article I, section 9, of the Constitution was modified by amendment 16.
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Article 1 Section 9
No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.

There is nothing in the Constitution that states the federal government must collect income taxes directly from individual, only that they can. The 16th Amendment could be a stumbling block to this proposal, but it doesn't have to be.

Check out the Freedom Tax

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