I Have My Theory on How to Limit the Growth of Government and I'm Seeking Feedback.

I could philosophically support your suggestion.

Alas, I don't think it has more of a chance than mine of REQUIRING each citizen to designate 60% of their tax liability to no less than 3 government departments or major projects.

And, I suspect the rapidly rushing sweep of history in our era will make any sane plan moot and left in the dust. Sadly.

The jurisdictions and roles of the departments responsible for the federal government’s budgeting, accounting, and revenue collection would be changed so that Washington D.C. and the 50 states would receive an ‘itemized bill’ for the services that the various government branches, departments, and agencies provide to the states.

I believe that's how it used to be done, way back when, although it probably wasn't itemized.

Real easy: Limit spending to 99% of the tax revenue collected the previous year.

Your quaintly identified "Sixteenth Article of the Bill of Rights" (actually the 16th Amendment - not part of the Bill of Rights at all unless you were being ironic) needs to be repealed FIRST, then all of your innovations would be set into place more or less automatically.

Until then, the Federal Government will continue to tax as it wills, knowing that the federal judiciary has long ago ruled that the amount of money left to the taxpayer is nothing more than a matter of "legislative grace".

No limiting of government growth, let alone a rollback to something resembling constitional proportions, will occur until the sheeple stop electing Demopublicans and Republicrats.

You will have to find or put people in the federal government who want to shrink the size of government. You will have to do the same about getting people into state government who wouldn't mind incurring public wrath by imposing heavy taxes, rather than simply distributing what they get from the feds. Good luck.

One way of looking at our history: Under the articles of Confederation, the federal government pretty much had to beg the states for money. If they didn't come through, the Congress couldn't pay its bills. From the adoption of the Constitution to the Income Tax Amendment, the federal government could impose certain taxes that were judged to be "uniformly apportioned" among the states. It was no longer a beggar, but its resources were under control. The result was a limited central government and separation of powers between federal and state government. Since then, the federal government's resources are enormous and the states have become the beggars.

It might be an interesting idea to repeal the 16th Amendment, but I doubt the idea would get very far. Putting the federal government at the mercy of the states and their decision whether to pay their share, would probably be a mistake. Some libertarians would applaud, but it's possible that the idea would be taken too far and result in the kind of anarchic, disunited situation that the Framers of the Constitution wanted to avoid.

We are all searching for a way to EFFECTIVELY advocate for smaller government ... here's my solution, the 15% solution (essay still in progress):

The 15% Solution

Nov 5, 2003

The problem with being a small-Government Conservative
is that without a clear direction, how do we know we
are going in the right direction?

"If you dont know where you are going, you might not
get there" - Yogi Berra

In NR, a response to the false idea that one can be a big
Government Conservative was given. We cannot support
Conservatism if we support large government.
Government undermines the meritocracy of achievement and
replaces it with the egalitarianism of mediocrity.
Cultures get dulled by the welfare state.
The false premise that materialism solves problems gets
tried out and fails, expensively, at our expense.

And that's ignores the manifest economic harm done by a
redistributive and big-spending Government.

If we really believe Government spending that is too high
is a problem, we should be able to advocate a specific
solution and prescription that can dig us out of our hole.

Hence the 15% solution: We will reduce the burden of the
Federal Goverment to 15% of GDP and until we reach that point,
the total year's spending for a given year can be no larger
in real terms than the spending for the previous year.

Here is why it is a good idea: Tax reform will not work
without reducing the burden of the Federal Government (in terms
of total spending); the Federal Government costs too much.

The Limits of Tax Reform

It would be one thing if Government was able to tax beauty
and redistribute it so nobody was more ugly than another.
Government cannot tax happiness, beauty, intelligence, or luck;
this is probably a good thing, for our world would be bland
indeed if the egalitarians were able to attack our essential
nature. Thankfully, the can't; they can only attack our pocketbooks,
wallets, and (in the modern age) our electronic banking accounts.
It can only tax for money - the fruits of productive labor.
It then uses this to support the unproductive, unlucky or incapable
in various forms; or to use it on social schemes that are
not supported voluntarily.

Inevitably, labor and capital are attacked in this process.
For disobeying a crime, you can get fined by the Government
some thousands of dollars; for the offense of making $100,000,
the Government fine can reach tens of thousands. The result
of this attack is a reduction in the effective standard of
living of the productive of our society. Beyond the immediate
loss of income to taxpayers, the create

The cost and price of Government are not the same, as when
you are shopping in a supermarket. Government cant put a
price tag on its programs, unless it chose to simply enact a 'head
tax' or a 'poll tax'. That idea is a non-starter (just look at how
the great Prime Minister Margaret Thatcher met her political end).
So the Government entities can raise money only by putting a tax RATE
on economic activity or wealth to extract the monies needed
(from sales, income, imports, inheritance, payrolls, capital gains, etc.)
In other words, the Government "price tag" has a "%" sign on it,
not a dollar sign.That rate of taxation is the price we pay, but the amount paid
in total is dependent on the economic activity itself,
activity shaped by among other things, the taxation rates themselves.
This circular effect makes it possible for Government to wholly
mis-price itself as a good, creating very high tax rates (prices)
on some kinds of economic activity, that do more to distort
behavior than to raise revenues. "Sin taxes" do this, and so do
"protectionist" import tarriff at high rates. But so do, to a lesser
extent, even seemingly low rates of taxation. A 20% rate on capital
gains may not seem like much, but it is enough for an investor,
on the margin, to avoid selling one investment for the time being.
The result is a less liquid market for investments, which harms
the efficiency of the capital markets. It is possible that
overall tax revenue is harmed more by the inefficiency than is gained
by the tax itself. Notably, both times capital gains tax rates
were lowered (1978 and 1997), capital gains revenues increased
in the year afterwards. There was a notable response to taxation
rate changes.

We can reduce the PRICE of Government with more effective taxation
systems that reduce the economic burden of taxation. Some propose
alternatives to our multi-rate progressive income tax, from a flat
income tax to forms of national sales tax to a more VAT-like tax.
This is all well and good, but at some point the price of Government
cannot be lowered any more: The cost of Government - the amount
the Government actually spends each year - is a floor underneath
which any attempt to reduce the price through tax rejiggering
will simply fail. We can raise import taxes and cut payroll taxes
and help domestic manufacturers. We can keep tax rates low,
improve the economy and not mind a deficit gap that will be repaid
in the future.
The limits of tax reform are the limits of Government size.
Tax reform alone wont cut the cost of the Federal Goverment,
and Government expenditures demand a tax bite or a debt
burden (paid in future taxes) corresponding to that cost.
Is there any doubt that a society that allowed 50% of its GDP
to be controlled and spent by the Government (eg as in France
or Sweden) would by definition have a burdensome tax system?

The Liberal solution to the dilemma is to roll back tax reform
and tax reduction, and to balance the Government's unbalanced
checkbook on the backs of taxpayers with higher tax rates and
a higher price tag for Government. This neglects the minor detail
that jobs, businesses, economic growth, and taxpayers' standard
of living would all be harmed in the process.

There is a better way.
Unless we reduce the COST of the Federal Government, that $2.2
(and rising) burden, we will be unable to manage the tax
and debt burden imposed on us.

Federal Goverment Spends Too Much

In the U.S. the Federal Government's burden on the economy
is running about 20% of GDP. The natural question to ask is:
If this is too much, by how much is it too much?

Since the days when Bill Clinton declared that "the era
of big Government is over", The U.S. Federal Government
spending has increased at (what 5% / year???). In real terms,
it is up over 50%.

It is easy to see why this has happened. Three reasons:
1. Whenever America has gone to war, it has manifested itself
in the expansion of the powers, expense, and size of Government
as a whole. In World War I and II, the Government took active
roles in managing the economy, production and prices. In the
Vietnam era, LBJ brought us "guns and butter", a welfare state
expansion and the expansion of a war effort. Since 2001, the same
dynamic has played out. Expanding the Government to fight the
War on Terror seems incompatible with shrinking it in any other
areas.

2. It seems the Republicans in control of Congress have forgotten the
promises made in 1994 to balance the budget and restrain spending.
This is partly a consequence of "compassionate conservatism" and the
flawed idea that it can be measured by matching the Democrats on
spending for various programs. Without spending restraint the programs
just balloon in size. Spending is growing faster now than when Democrats
ran the whole Congress and Presidency last, in 1993-1994.
This shocking statistic is testament to the natural tendency of whomever
is in power to want to spend money and control pork barrel spending.

3. Government is not perceived as "the problem", as a consequence
of President Bush's and others political positioning on this.
The focus of Conservatives, distracted by war (point 1), and
made complacent by Republican victory (point 2), has let the issue
of excessive spending slide. And why not? In the 1990s, Federal
Government spending growth was lower than in other decades,
mainly due to the ramp-down in Defense spending.
In the economic bubble-bursting and recession, Government spending
at the Federal level was not seen as the problem, indeed a
little of (at the SEC) was seen as the solution.

4. President Bush. Let us be clear of the 'problem'. It seems to
run in the family. A fine Conservative with a hint of compassion
and nobless oblige has managed to sign on to a Farm Bill that
busted the budget, a Kennedy-supported education bill, a doubling
of the NIH budget (sure, an increase is useful, but doubling in
the face of lower tax revenues? Is that necessary?)
President Bush, for all his Conservative merits in other areas,
has managed to increase spending overall at a faster rate
than Reagan by far, and Clinton.
And yes, the War on Terror is expensive, but back out homeland
security and the DoD. What do the rest say?

As Phil Gramm has said [his 1996 Presidential announcement speech]
it is not a question of whether money is to be spent on education
or health care, its a question who decides to spend it.

The 15% Solution is the beginning of the answer: STOP growing the Government, start growing the economy instead.

This idea can work in conjunction with 2 other ideas:
- Brady's Sunset Act
- Zero baseline budgeting

Let's begin to advocate a particular *goal* with respect to smaller government - let's advocate the 15% Solution!!

I've had a similar thought along the same lines... (though far less detailed than yours) for quite a while. But have just passed it off as "not bloody likely gonna happen": I think just the act of having the states collect the taxes and the fed dependent on the states to hand it over, as opposed to the fed collecting it's own direct taxes, would counter the expansion of federal power...

The fed government has used its tax revenue to suck massive amounts of money from the population of the states, then offer money to the states (with strings attached) to coerce states into compliance with decisions made in DC that have no business being made in DC...

I believe that fact, more than any other, has enabled the federal government to buy interest in regulating all the things intended to be left to the several states.

If the Fed had to depend on each state for a check each year for it's operation, rather than the Fed having only self-imposed limitations on direct taxes, and offering money to the states in return for compliance with it's dectates, the states would be sovereign and the Fed would have no power to scam authority beyond it's original constitutional limitations.

Lovely. But first, we need politicians who actually care about the "public welfare." It's obvious they do not. Vote 'em out and put in people who will listen.

Nope, I wasn't being ironic; I was being idiotic. Seriously, thank you for correcting me.

Believe it or not I actually considered this as one of the negative consequences when I first posted this, several months ago, on The Glenn beck Insider's forum. I posted the my idea in the message body and made a multiple chioce question poll out of it. I didn't get nearly the number of thoughtful responses in that forum - in several months after I posted it - then I have received in just one day here! Demographics I guess. One interesting response that I DID get there was someone suggesting that the 17th Amendment should be repealed and that state legislators should be the ones who appoint U.S. senators like it had been before the 17th Amendment was ratified. Up until that response I never knew that that was how it was done. You learn something new every day!

I tend to think that change isn't going to come unless it's for the worse, but keep plugging away.

In the 1970s, William Buckley proposed in a book called Four Reforms that federal welfare payments only go to recipients in states where the average income was below the national average income. That way the cost of sending money to Washington and back would be cut out. It hasn't been done, but who would have thought then that 20 years later we'd have had a transfer of welfare programs from federal to state administration. Changes do come.

The founders were concerned that direct taxes would be used by poorer states against the richer ones. That's why they didn't want to allow them. In the late 19th and early 20th century New Yorkers' total income was equal to that of many Western states combined, so you can see why the income tax amendment went through.

Today, states like Connecticut and New Jersey give much more in taxes than they get back in benefits, and states like Mississippi and Wyoming get more than they put in, but Easterners tend to want the federal social programs that those in the West and South don't. I haven't seen a breakdown of the figures, but it looks like things might change if states like Connecticut or New Jersey decided to pay for what they wanted themselves and encouraged the others to do so as well.

Putting the federal government at the mercy of the states and their decision whether to pay their share, would probably be a mistake

Do you know what the total federal revenue from income taxes is annually? How does that compare to total federal receipts?

I wonder if today, we could actually go the apportionment route when it comes to the revenues from income taxes. Just take that portion of the federal budget and leave it up to the states to figure out how to raise the money. I am not sure in this day and age, where states really don't have their own militias any longer, if it really is feasible that a state would simply refuse to pay-- especially if the other government revenue streams are severed on refusal to pay, and especially if military bases would be closed or other federal contracts denied to interests within the state. I think the political cost would be too high.

I would love to get it to where there are zero federal income taxes. Let the individual states decide if they want to just adopt the current income tax rates as their own, or if they want to adopt a flat tax, or any number of combinations. Get the magic of diversity of ideas to show the strengths and weaknesses of every approach in application, rather than just in theory.

Original post redone:

Perhaps the most infringed upon article of the Bill of Rights during the last century has been the Tenth, which continues to be ignored today. States rights have been largely circumvented by the growing federal government organizations and agencies, in particular in the Executive branch. The federal government's growth rate has exceeded the Gross Domestic Product's growth rate, in percentage, and the trend should not be allowed to continue. If you need an example of this largess then you haven’t been paying attention, nevertheless here is the example.

Consider the ideas here as I hope that you are open-minded and like fresh ideas. These ideas would, effectively, eliminate the need for individuals and tax-paying entities to file Federal income tax returns. Unfortunately payroll taxes could not be delegated to the states under this idea because of the scope and complexity of promised federal benefits and the freedom of people to change state residency at their discretion. This means that payroll tax for Social Security and Medicare would have to be left in place unless completely privatized (very unlikely).

The idea is very simple. The jurisdictions and roles of the departments responsible for the federal government's budgeting, accounting, and revenue collection would be changed so that Washington D.C. and the 50 states would receive an 'itemized bill' for the services that the various government branches, departments, and agencies provide to the states. The states would then tax its citizens based on their federal 'bill', their own state representation, and of their own state's necessity. The states would decide their taxing methods based on what they feel would be fair and just. But, each state would be required to allow the federal government, at the state's expense, to conduct regular census and, each state would have to submit a comprehensive and federally standardized gross income figure for all of its tax payers.

The calculations of how the federal government could bill the states would be based on up to three factors depending on the federal service provided and the 'bill' would be an itemized listing of each service. The three federal tax factors would be: the states population as a percentage of the total United States population, the states landmass minus federal lands (in square miles), and the states total federally standardized gross income of its taxpayers.

Some federal services would only use one factor for its calculation when determining the state's billed portion. For instance, the Environmental Protection Agency would only be billed based on a landmass calculation. This would be a proportionately high expense for Alaska when compared to New Jersey. However, when billing for the federal representation of Alaska and billing New Jersey's federal representation, calculations would be based only on the population factor making New Jersey's bill proportionately higher than Alaska's. Other federal agencies would have to calculate their bills according to hybrid factors because their services may have more than one correlating factor. Adding a federally standardized gross income factor to a calculation would give consideration to a states industry and cost of living conditions, making the billing as fair as possible for that service provided. For example, when comparing New Hampshire and Maine, two states with similar populations, it becomes apparent that New Hampshire taxpayers can afford to pay a larger percentage then their northern neighbors because their taxpayers collectively earn more. Of course a federal standard (as mentioned above) to measure the gross income would be necessary so that states with a larger retirement population would still have to pay their fair share.

As stated earlier, the need for federal income tax returns would be eliminated. This change should be largely agreeable to the nation's taxpayers. The states would more than likely endorse the idea because the influence would be brought back to their level where it belongs. States could attract or repel their respected residents by providing services, infrastructure, and economic incentives/pressures - think of it as a 'free market' solution to determine how we wish to be taxed. The states would also be able to decide how they would tax their citizens. This could possibly start a trend where the federal government shrinks in size if the states come to the conclusion that they could provide their own services. States could take over a service only as long as that state could maintain a uniform standard of service.

I think this can work within a Republic, too. Let's try it!