Forget What You Know About Taxes This is the last entry from the What Would You Do As President? series. Up this time around is:

• Revise the tax code to bring fairness and relief to the working/middle classes.

Could that be any vaguer? Revising the tax could mean such a wide spectrum of thought that there’s absolutely no way to cover all of it with any depth in this one post. If I had to boil my thoughts down to a single politician’s views, and please don’t stone me for saying this, but it would be that crazy Ron Paul. Look up a few of his speeches on youtube and you might be surprised. The whole point of Ron Paul is that he is a strict Constitutionalist that thinks there is far too much government and that government has more or less missed the point for far too many years.

Lincoln started taxing to pay for the Civil War, but it was repealed after a few years. Income tax started up again in 1894, but the Supreme Court ruled it unconstitutional the next year. It came back for good in 1913 with the 16th amendment. Even though the Constitution prohibited direct taxes to individuals, the powers that be decided to make it possible.

Regardless, the key point is not the constitutionality of taxes; the point is that income taxes have only really been around for less than 100 years. If we survived without taxes before, what makes today so much different other than us being satisfied with our present condition? I'd like to argue that everybody could be better off with less, or even no taxes (gasp!).

Maybe it has something to do with our money not being on a standard (like the gold standard). I don't want to jump to conclusions, but I do know that when there is a gold standard the government can’t just print money to fund its spending, so it keeps government spending in check. Plus, it helps keep inflation under control so your money doesn’t become practically worthless in a few years.

So, what is my advice? To completely dump the entire Internal Revenue Service and forget about taxes? Not quite.

Let’s replace personal income tax with a consumption tax.

So, the taxes you pay when you buy stuff increases, but that is what replaces the income tax. In other words, if you buy less stuff you will pay less taxes. Businesses still get taxed separately, but their write-offs would obviously be better considering the inherit tax that goes with all of the products and services supporting their business.

Maybe that’s too crazy, so how about a very low flat tax plus consumption tax.

How about a 5% flat tax on all money earned (and we’ll still throw in a few tax incentives like dependents, mortgage tax adjustments, etc). Since people with a few more bucks will be buying the yachts and the luxury items, the taxes they will be paying will go up according to all of the stuff they spend their money on. I don’t know if these concepts are feasible, so maybe the better place to start is to start cutting out government programs and services since the government just costs way too much money. If we cut out enough, then the taxes we pay will be reduced.

Labels: government, law, money, politics, president, taxes

  ¶ 3:10 PM