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The GOP’s “Abolish the IRS” Crackpots
Natural Born Conservative ^ | November 28, 2015 | Larry Walker II

Posted on 11/29/2015 12:40:23 PM PST by NaturalBornConservative

"In this world nothing can be said to be certain, except death and taxes." ~ Benjamin Franklin ::

Separating the Wheat from the Chaff

:: By: Larry Walker, II ::

Each 2016 GOP presidential candidate has proposed to reform the tax code. While seven have offered legitimate proposals, five have advanced theories, which are basically maniacal. Those proposing to abolish, or end, the Internal Revenue Service (IRS) may be classified as crackpots, because, let's face it, that's never ever going to happen. With taxes of such fundamental concern, it's difficult to take anything else these kooks say seriously. Unless such candidates are willing to revise and clarify their ideas, they should drop out of the race immediately, so conservative voters may focus on genuine tax reform proposals.

Just who are these crackpots and why is their reasoning amiss? They should be evident by now, but let's run through them, one by one.

Rafael Edward "Ted" Cruz

First there's Senator Ted Cruz, who might have a better shot if he used his real name, and dropped his flawed and incomplete tax proposal. Senator Cruz proposes a 10% flat tax on individuals, a 16% flat tax on businesses, and to abolish the IRS.

His Simple Flat Tax Postcard lumps all income onto one line, rendering it virtually impossible to verify. Apparently wages, interest, dividends, capital gains, rents, pensions, social security benefits, etc. are all one in his mind. He proposes a $10,000 standard deduction per filer, and a $4,000 personal exemption for each dependent. He would maintain the Child Tax Credit, Earned Income Tax Credit and deductions for charitable contributions and mortgage interest, all without the necessity of an IRS.

Cruz would replace the corporate income tax with a Business Flat Tax of 16%. The tax would apply to "gross revenues minus expenses for equipment, computers, and other business investments". That means no deductions for salaries, rent, utilities, supplies, and other ordinary and necessary business expenses. Although he would eliminate the payroll tax, this is made up for by effectively assessing businesses a 16% tax on the salaries and wages paid (i.e. since they will no longer be deductible).

Although his idea might seem fair and simple to the average working Joe, it's not practical in the real world. That's because, according to Senator Cruz, a small business would basically fork over 16% of its gross business income, without regard to its net cash flow. If its net income percentage is 16%, it would hand it all over to the government, and if it has a bad year and loses money, it would still owe a 16 percent tax on its gross revenues. Great! How many small businesses would survive under this scam?

But that's not the end of it. According to Cruz's proposal, small business owners would then owe an additional 10% tax on the salaries and dividends received from such businesses, after the standard deduction and allowance for exemptions, or charitable contributions and mortgage interest. In other words, through stealthy double-taxation, a small business owner could wind up owing as much as 26% on his or her compensation. Yeah, good luck getting this passed without mass resistance!

If the scheme were ever to see the light of day, which is highly implausible, then who would we mail the checks to? Since there will no longer be an IRS, not to mention three or four other agencies, would we simply forward more than 160 million checks to the White House? Who will verify whether everyone required actually files a "postcard-sized" tax return? Who would verify whether those that do file actually pay the full amount due? What happens when they can't pay in full, or at all? Who will verify whether the amount of gross income reported is accurate?

Folks, this is not a well thought out plan, and it certainly won't abolish the IRS, so as far as I'm concerned, you can strike Senator Cruz off the short list.

Randal Howard "Rand" Paul

Then there's Senator Rand Paul, whom I admire, other than for his flawed tax proposal. He proposes to "blow up" the tax code and start over. He has advocated "abolishing the IRS, and replacing it with a simplified, revamped tax code". He proposes a 14.5% flat tax on individuals and businesses.

For individuals he would allow a $15,000 standard deduction (per filer), and a $5,000 per person exemption, while maintaining the Earned Income Tax Credit and Child Tax Credit. How's that for pandering? You can have your cake and eat it too. He would then eliminate all deductions other than mortgage interest and charitable contributions. Good luck handling all of this without the IRS.

For businesses, he would levy the tax on revenues minus "allowable expenses", such as the purchase of parts, computers and office equipment. He would allow the immediate expensing of all capital expenditures, ending the notion of depreciation. Great, but that means no deductions for some of the largest expenses most small businesses incur, such as salaries and wages, rent and utilities, health insurance and retirement contributions.

Following Senator Paul's approach, small businesses would basically fork over 14.5% of their gross business income, since after the first year most won't have much in the way of "allowable expenses". Once that's done, whether or not there's anything left over, its owners would then fork over another 14.5% of the salaries and dividends received from their businesses, after subtracting the standard deduction, or charitable contributions and mortgage interest (i.e. the only deductions he would allow), personal exemptions, and allowable tax credits.

Although the plan sounds reasonable on its surface, how would it be carried out without the IRS? Who would we send the checks to? Who would ensure basic compliance? Who will dole out the tens of millions of Earned Income Tax Credit refunds and guard against fraud? It doesn't sound like Senator Paul will be abolishing the IRS anytime soon, so why the facade? This contradiction removes Senator Paul from serious contention.

Benjamin Solomon "Ben" Carson

As for Dr. Ben Carson, had it not been for money raised prior to his candidacy, by a PAC originally established for the purpose of repealing Obamacare, he wouldn't even be in this race. Dr. Carson proposes that we all pay mandatory tithes to the federal government, as if it's our new God, or something. Under his theory (which has yet to be set to pen and paper), individuals and businesses would simply hand the federal government a flat 10% of their gross income without the benefit of any deductions, which would put an end to the IRS.

Carson's design would result in a 72% to 233% effective tax hike for those in the lowest, second, middle and fourth income quintiles, while at the same time granting an effective tax cut of 30% to 49% for those with the highest incomes. It's a great plan if you make more than $200,000 a year, but for everyone else it will amount to a humongous tax increase.

Under Dr. Carson's theory, a small business owner would simply fork over 10% of his (or her) gross business income, without the benefit of any deductions for salaries, rent, utilities, mortgage, state taxes, materials, supplies, depreciation, subcontractors, etc. Then contribute another tenth of the gross salary and dividends received from his or her business, again without the benefit of any deductions. This may seem fair to the average working Joe, until he receives the inevitable pay cut or pink slip, whichever comes first. Just do the math.

If Carson was somehow elected, and his plan were to survive public and Congressional scrutiny, once he abolishes the IRS, who would process our tax payments? Who would ensure basic compliance? Without the IRS, or an IRS-like agency, gross income would likely become whatever voluntary compliers chose to report, leading to a huge decline in tax revenues. In fact, without the IRS, his program would have no chance of success. Ben Carson should either go back to the drawing board, or simply get out of the race. His tax reform proposal eliminates him from serious consideration.

Carly Fiorina

Next we have Carly Fiorina. Although she hasn't specifically advocated for the complete elimination of the IRS, she has proposed reducing the U.S. tax code from its current 73,000 pages down to just three pages. Just what would be on those three pages is anybody's guess. What's so bad about that? Well, here are a couple of examples.

Let's say you're halfway through reporting an installment sale on an owner financed property. Under Carly's theory, I suppose you would just throw that notion out the window and just pay tax on the full amount received each year going forward, including the return of capital. That's because, in Carly's world, it would be far too complicated to determine the amount actually gained on the transaction.

If you have a net operating loss carryforward for the next 20 (or so) years, a charitable contributions carryforward for the next five, or a Section 179 carryover, I suppose you would forget about claiming these as well. Why? Because, there's no way on earth one could cover such concepts within a three-page income tax code. Furthermore, there would no longer be any distinction between Corporations, S-Corporations, Partnerships, or Exempt Organizations, all too arduous to cover in just three pages.

Ms. Fiorina sure knows how to talk the talk, but at the end of the day that's all it is. She doesn't really have a tax reform plan, just a quirky notion that complex ideals can be compressed into thrifty one-liners. Her lack of judgment, in this matter, eliminates her from further consideration.

Michael Dale "Mike" Huckabee

Finally, there's Mike Huckabee, who proposes to abolish the IRS by enacting the FairTax. Under the Fair Tax, businesses and individuals would pay a 23% national consumption tax on new purchases, above the poverty line. Federal taxes would be collected by retail businesses at the state level, so the IRS could be done away with, or at least its collection function.

According to the plan, "you have control over your own money and what your overall tax rate will be". In other words, if you only buy used goods, or purchase everything under the table, you could wind up not paying any taxes at all. Just like in Greece, eh!

Then there's that good old "Prebate", the program's key to fairness. The Prebate is akin to today's standard deduction. Its function is to ensure that no American has to pay the FairTax on the basic necessities of life. Under this concept, every head of household in the United States would receive a monthly check from the government. That is, after having been raked for a 23% consumption tax at retail. How would this work?

Well, first every head of household in the United States would file a simple report with the government (each year) reporting the name and Social Security number of everyone living under their roof. Then, if you're single you would receive a check from the government for around $183 per month. If you have a household of eight, you would receive around $742 per month. If there are 16 people in your household, you would receive around $1,242 every month. That seems simple, right?

Well, it won't be so simple once the IRS has been abolished. Who's going to verify that the individuals claimed on 160 million (or so) "annual reports" actually live in the households claimed? Who will ensure that the same dependents aren't claimed by multiple FairTax patrons? Furthermore, what agency will process the 160 million annual "Prebate" reports, and issue some 1.9 billion monthly Prebate checks (160 million times 12 months) each and every year?

The IRS, as we know it, already has problems verifying dependents, and accurately issuing a much smaller number of annual tax refunds. It's constantly battling against the issuance of fraudulent refunds on an annual basis. Accelerating the refund cycle from annually to monthly will only exacerbate such problems. So once the IRS has been abolished, which government agency will carry out these tasks?

Simply hoping and believing that people won't cheat, when there's no longer an agency to police the system, would be (well) stupid. So that eliminates Huckabee.

Scattering the Chaff

Along with death and taxes, I'm afraid the IRS will be with us, in some form or fashion, for the duration. No matter whose tax policies you favor, a governmental agency will be needed to administer them. Trumpeting the end of the IRS plays well in certain quarters, but generally among anarchists rather than rationally-minded conservatives.

Lower taxes, tax simplification and tax reform are ideals most of us agree upon. But as for irrational, radical, fundamental, transformations, haven't we had enough? When it comes to income tax policy, we must separate the wheat from the chaff. We have thus eliminated Ted Cruz, Rand Paul, Ben Carson, Carly Fiorina, and Mike Huckabee from serious consideration. Please go away!

That leaves Donald Trump, Rick Santorum, Marco Rubio, John Kasich, Lindsey Graham, Chris Christie, and Jeb Bush. It also makes Trump the only viable outsider, not to mention the only one proffering to reduce income tax rates to the lowest levels since the Revenue Act of 1926. The seven offer varyring rates, exemptions and methods, some more appealing than others, but neither advocates the crackpot scheme of abolishing the IRS. It's up to each of us to determine what's in our own, and in our country's best interests. To that end, abolishing the IRS serves no useful purpose.

References:

Matthew 3:12

Trump's Dynamic Tax Policy

2016 Conservative Tax Plans: Trump vs. Carson

Top GDP Growth Rates in U.S. History

Photo Credit:

More Than A Sunday Faith


TOPICS: Business/Economy; Government; Politics; Society
KEYWORDS: 2016election; amnesty; arkansas; bencarson; blogpimp; california; carlyfiorina; cino; clueless; election2016; fakeconservative; gop; ibtz; irs; larrywalkerii; mikehuckabee; newyork; nutjob; policy; saygoodnightgracie; taxes; tedcruz; texas; trump
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To: cripplecreek
Bingo! The worst amendments ever passed. A book titled “The Law that Never Was” detailed how the 16th amendment was never properly ratified. Heard of it?
21 posted on 11/29/2015 1:02:38 PM PST by Fungi
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To: NaturalBornConservative
"let's face it, that's never ever going to happen"

Of course it won't if you give up before the attempt. At best, this is defeatism. At worst, it's more leftist crap.

22 posted on 11/29/2015 1:03:00 PM PST by Da Bilge Troll (Defeatism is not a winning strategy!)
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To: NaturalBornConservative

Nothing personal but your post is idiotic.

Clipped from FactSheet: The text of the United States Revenue Act of 1913, is generally considered to be the original tax code. Combined, these documents were approximately 27 pages in length, and the pages measured six by nine inches (under 20 pages normal paper).

Today that code is today is a 73,954 page, 25 - volume service called CCH Standard Federal Tax Reporter.

I doubt we need a 12.9 billion dollar IRS agency if the tax code was less than 20 pages. And no we don’t need an agency that goes after political enemies and so corrupt can not be fixed with tweaks, it must be destroyed.

By the way Cruz likely has 50 points of IQ on you (so quit the childish attacks) and if he thinks he can abolish and rebuild an abomination I am all for it.


23 posted on 11/29/2015 1:05:08 PM PST by BushCountry (Studies show that one out of three Liberals are as stupid as the other two.)
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To: cripplecreek

“how the nation survived till 1916 without it.”

BINGO


24 posted on 11/29/2015 1:06:24 PM PST by max americana (fired every liberal in our company at every election cycle..and laughed at their faces (true story))
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; cardinal4; ColdOne; ...
Image and video hosting by TinyPic

25 posted on 11/29/2015 1:18:25 PM PST by SunkenCiv (Here's to the day the forensics people scrape what's left of Putin off the ceiling of his limo.)
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To: NaturalBornConservative

Weak attempt at setting up a false premise and arguing from said premise.

Most proposals concerning the IRS have as a follow, “abolish the IRS as we know it”. Of course, as long as there are taxes there will be tax collectors (or a system designed to ensure that taxes are collected).

The IRS, as we know it, has evolved into much more than a system to collect taxes. And THAT system (including the massive tax code/regulations) needs to be abolished or reformed beyond all recognition.


26 posted on 11/29/2015 1:20:25 PM PST by Let_It_Be_So (Once you see the Truth, you cannot "unsee" it, no matter how hard you may try.)
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To: NaturalBornConservative

Um, huh? Advocating for the IRS and a 73,000 page tax code here?

Sure you did not get lost on the way to some other site?


27 posted on 11/29/2015 1:27:47 PM PST by piytar (Good will be called evil and Evil will be called good.)
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To: NaturalBornConservative

bflr


28 posted on 11/29/2015 1:29:00 PM PST by sauropod (I am His and He is mine.)
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To: NaturalBornConservative; darkwing104

It is also interesting that you don’t go after any Democrat’s tax ideas. Hmmm.

IBTZ?


29 posted on 11/29/2015 1:30:05 PM PST by piytar (Good will be called evil and Evil will be called good.)
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To: Let_It_Be_So

This guy must work for the DNC. The Fair Tax need not include prebates. To deal with its regressive nature, simply exclude food and non-luxury clothing items.


30 posted on 11/29/2015 1:34:05 PM PST by huckfillary
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To: Dilbert San Diego

Ted Cruz’s use of “Ted” is a real sore spot with liberals. Funny how none of them complained when their hero, St. Ted Kennedy, didn’t use his real first name.


31 posted on 11/29/2015 1:35:40 PM PST by fatnotlazy
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To: NaturalBornConservative
"Abolish the IRS"

You say that like it's a bad thing. Why?

32 posted on 11/29/2015 1:37:13 PM PST by rockrr (Everything is different now...)
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To: NaturalBornConservative

there would be nothing more popular in USA than replacing the current income tax bs ... with something simple, easy, and non-obtrusive (that also could not be readily abused for improper or totalitarian purposes)

this article’s premise is so far, far removed from any contact with the American people.... it must have been emailed in from Uranus?


33 posted on 11/29/2015 1:37:55 PM PST by faithhopecharity (Brilliant, funny, and incisive Tagline coming to this space soon.....)
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To: Fungi

I have.


34 posted on 11/29/2015 1:38:37 PM PST by piytar (Good will be called evil and Evil will be called good.)
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To: Fungi

True, Ky didn’t vote on it or for it but it was called a yes vote.


35 posted on 11/29/2015 1:46:34 PM PST by Foundahardheadedwoman (God don't have a statute of limitations)
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To: NaturalBornConservative

If you want less of something you tax it. Do we want less income?

If you want less of something you tax it. Do we want less spending, more savings? Let’s tax it.

The case to eliminate the income tax in favor of a transaction tax.


36 posted on 11/29/2015 1:47:43 PM PST by anton
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To: NaturalBornConservative
A natural born conservative understands that the IRS *IS* unnecessary, if we adopt simple tax plans like a National Sales Tax or a Flat Tax.

Otherwise, mischief can -- and is -- made.

Methinks you are not naturally-born.

37 posted on 11/29/2015 1:48:27 PM PST by Lazamataz ( If they try firearm confiscation or gun registration, I go ballistic.)
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To: NaturalBornConservative

The only crackpot part of the argument is from those who would argue to abolish the IRS first.

Not the way to go about it.

First, abolish the income tax by Amendment to the US Constitution.

Then implement a national sales tax (flat tax, whatever) that can never rise about 15%.

These two acts would eliminate the need for the IRS in its current state. It would be replaced by a decent computer and about 50 employees who would be doing nothing more than rolling the sales tax from each state over to the budget office.

Problem solved.

Economy strengthened.

A large part of liberty restored.


38 posted on 11/29/2015 1:51:45 PM PST by Ghost of Philip Marlowe (Carter...Reagan...Bush...Clinton....Bush....Carter....BUSH? / CLINTON? STOP THE INSANITY!)
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To: fatnotlazy

Jimmy Carter was never referred to as James or James Earl Carter. Selective outrage and inconsistent criteria being applied by the liberals, and in this case, it is inconsequential.


39 posted on 11/29/2015 1:52:15 PM PST by Dilbert San Diego
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One thing that would certainly make the abuse of the IRS end (i.e. allowing the government to use the IRS to persecute the "undesirables,") would be to allow direct criminal and civil prosecution of IRS employees, of "crimes under the color of law."

This would have allowed every one of the groups and individuals persecuted by Lois Learner and her ilk to be taken to court.

Mark

40 posted on 11/29/2015 1:58:09 PM PST by MarkL (Do I really look like a guy with a plan?)
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