From Issue #01-18
On "May Day," that day each year when Sociocrats around the world celebrate the suppression of individual, economic and political liberty, the U.S. Senate and House reached agreement on how to whittle President Bush's miniscule 5.7% tax cut over ten years down to a 3.5% tax cut over 11 years — and the "details" have yet to be worked out.
The projected surplus (taxes collected in excess of revenues allocated) over the next ten years is estimated to be $5.6 trillion. Mr. Bush's original proposal of a $1.6 trillion tax cut amounts to less than 29% of that projected surplus — only 5.7 percent of the estimated total $27.9 trillion in tax revenues to be collected — too much for Senate.
According to the economic analysts at the Heritage Foundation, "The Bush tax cut, measured as a percent of GDP, is only about one-fourth as large as the Reagan tax cut and only about one-half as large as the Kennedy tax cut," both of which "triggered record periods of economic growth." To achieve similar results, the analysts estimate "the Bush tax cut should be...almost twice as large as [originally] proposed."
Unfortunately, the unfettered temptation to spend has already absorbed almost 80% of the projected surplus. Whether the micro-measure compromise of a 3.5% tax break will be enough to breathe any life back into a failing economy is doubtful.
Suffice it to say, the Left will play their class warfare ace and do everything they can to make sure their least favored citizens are bearing the greatest tax burden — thus avoiding the accountability that would follow if the tax burden were more equitably spread among all citizens. Under the current "progressive" tax rates, 25% of income earners pay 83% of the tax burden — effectively protecting the tax and spend Republicrats from a majority tax revolt. Implementing Rep. Dick Armey's flat income tax proposal, or a national sales tax collected by the states, would spread the burden of the total cost of government over a greater number of people — putting great pressure on the "tax and spenders" to stop it!
Elimination of the current tax code would also limit the Sociocrats' ability to use tax law as a sledge hammer to "shape" the economy and redistribute income to their favored constituents. Mortimer Caplin, a former IRS commissioner under Democrats Kennedy and Johnson, notes:
The most promising legislative glimmer of hope on the tax reform horizon (applying our "don't wound it — kill it!" principle) is HJR 45, a measure introduced in late April by Rep. Ron Paul (one of the few members of Congress who still attend to the letter of our Constitution). HJR 45 is a measure to repeal the 16th Amendment, which, upon its ratification in 1913, allowed the federal government to do what the Supreme Court had always ruled unconstitutional: levy a direct income tax on individuals.
"The income tax has...enabled government to expand far beyond its proper limits, invade our privacy, and penalize our every endeavor," notes Mr. Paul. "The Founding Fathers never intended an income tax, and they certainly would be dismayed to know that Americans today give more than a third of their income to the federal government."
The central government's ability to impose direct income taxation is the single greatest threat to liberty, and as our liberties are progressively diminished by "progressive" taxation and the ever more powerful government it funds, we are reminded of Nikita Khrushchev's observation:
Our patriot Founders cast off their government after its imposition of a tea tax exceeded the limits of their endurance. Today, however, virtually every purchase or transaction imaginable is taxed — in addition to the selective direct taxation imposed by the central government. We have, indeed, become a subservient and compliant people. But tax protest is no longer so easy as dumping crates into Boston Harbor.
The most logical way to protest income taxes is to stop paying them — but the central government has removed that option by making sure most Americans' income taxes are withheld — effectively keeping that portion of citizens' income claimed by the government from ever reaching their pockets. Withholding also lulls taxpayers into indifference because they never actually have to pay taxes — just wait for their refund from the previous year's withheld income as if it is some kind of bonus.
(Of note, Rep. Ron Paul has also introduced H.R.1364 "to restore to taxpayers awareness of the true cost of government by eliminating the withholding of income taxes by employers and requiring individuals to pay income taxes in monthly installments.")
But alas, as noted by Lord Tytler above, the fix is in. The redistribution of wealth in the form of politically directed government largess will continue unabated until the collection of taxes is democratized and "neutralized" — spread equitably among all citizens. And, in reality, nothing short of disposing of the current tax code — or disposing of the current government — will achieve that end.
STATEMENT OF PURPOSE
Taxes and the Money
5 may 2001