Posted on 04/21/2008 6:04:34 PM PDT by BGHater
Taxes were on the forefront of many Americans’ minds this week as they scrambled to meet the April 15th deadline to file their returns. Tax policy in this country hurts taxpayers twice – once when they pay taxes, and then when the government spends the money. Americans are sick and tired of the financial burden and the endless forms to fill out. To add insult to injury, after collecting this money the government does some very detrimental things to the economy.
The burden of complying with the income tax is tremendous. Since its inception in 1913, the tax code has gone from 400 pages to over 67,000. The Tax Foundation estimates that around $265 billion dollars and 6 billion hours are spent just on compliance. That expense amounts to about 22 cents of every dollar the IRS collects. Imagine the boon to the economy if we spent that time and money expanding our businesses and creating jobs!
Aside from the direct loss of money and productivity, the funds from the income tax enable the government to do some very destructive things, such as vastly over-regulating economic activity, making it difficult to earn money in the first place. The federal government funds over 50 agencies, departments and commissions that formulate rules and regulations. These bureaucracies operate with little to no oversight from the people or Congress and generate around 4,000 new rules every year and operate at a cost of about 40 billion dollars. There are some 75,000 pages of regulations in the Federal Register that Americans are expected to know and abide by. Complying with these governmental regulations costs American businesses more than one trillion dollars per year, according to a study by Mark Crain for the Small Business Administration. This complicated system drives production to other countries and shrinks our job market here at home.
Big government is destructive when it takes your money and when it spends it. There is no economic benefit to supporting a government sector as massive as ours. In fact, this country thrived for well over 100 years without an income tax. Today, if you took away the income tax, the government would still have revenue from other sources equal to total government spending in 1990, when government was still too big. $1.2 trillion should be more than enough to fund a government operating within its constitutional confines, and that is exactly what we need to get back to.
I have introduced legislation many times to abolish the IRS and the income tax. It is fundamentally un-American to require taxpayers to testify against themselves and be considered guilty until proven innocent. Abolishing the IRS altogether would trigger an avalanche of real growth in the economy.
With these financial hard times only just beginning, this would be the most efficient and logical way to get our economy growing again, and Americans would need not dread the 15th of April every year.
Then if the Congress lays and collects Taxes on the wrong things in excessive amounts at inappropriate times, it should cease being the Congress.
The problem is that the public education system has done such a good job that practically nobody in this country is able to recognize that Congress has overreached its bounds.
Heaven forbid that the federal government do without its revenue "fix" for a few days while our elected representatives figure that out.
Thanks for the info.
Income is taxed once annually. The government takes that cut. As for all the other taxes, the fair tax does not only not do away with them, it taxes some of the taxes paid as well. Excise taxes come to mind.
Now, Here is what happens to your dollar as it goes through a series of taxable transactions. The first time you spend it, 22 cents goes to the government. that leaves 78 cents of that dollar in private hands. That person spends that 78 cents, and 22% goes to the government That leaves 61 cents of the original dollar in private hands.
Say what is left of that dollar gets spent again (not unusual that a 'dollar' changes hands a few times in a few months, right?) the government gets its 22%, the original dollar is now down to 47 cents in private hands. Now this is only three taxable transactions, and the dollar you had is 53% gone to the government. It is a question of money supply. By the fifth transaction, the government has taxed that dollar five times, on the 5th go round 22.5 cents remain in private hands, the government has 77.5 cents. Do the math yourself or make a spreadsheet to show you how the money goes away. Why? Because a dollar is not stagnant. Because in order to have an economy, that dollar keeps moving through multiple transactions, and every time it moves it gets taxed.
Now, just for fun, move a trillion dollars through ten taxable transactions and see what happens to the money supply. 92.7% is in the Government coffers.
In order to put money back into circulation, the government would become the primary purchaser of goods and services because it would have the money. Corporate to corporate transactions are all fine, but at some level, the average schmuck has to spend some money or there is no economy. That transaction is going to get taxed.
As for the current system being unfair. Yeah, it is. Last year the IRS and other taxing agencies took over one fourth of the money I made while other people who lived off the dole (at least partially) 'got back' more money than they put in. But as long as socialist philosophies underlie government spending, it will not matter how the money is collected. What matters is how and how much of it is spent. Half the population paid diddley squat or got back more than they put in.
hilarious
Your example assumes that each transaction is taxable. That would not be so for business to business transactions nor would it be so for transactions involving savings accounts or investments.
Keeping this post G-rated, Americans can disregard the 75,000 pages of regulations concerning federal taxes. What our federal legislators need to know is that they are in contempt of the Constitution for unthinkingly following in the footsteps of FDR's dirty spending politics.
This post (<-click), while addressing taxes, references notes by Thomas Jefferson to explain why the federal government is wrongly operating outside the restraints of the federal Constitution, particularly where constitutionally unauthorized federal spending is concerned.
The bottom line is that the people need to reconnect with the intentions of the Founders as reflected by the Constitution and its history, particularly with respect to the requirement for constitutionally enumerated federal government powers which reasonably justify federal spending. The people really need to get in the faces of members of Congress who are foolishly following in the footsteps of FDR's dirty, Constitution-ignoring politics, demanding an end to unauthorized federal spending and an appropriate lowering of federal taxes.
No, it does not. I even said "taxable transactions".
I was privvy to a study done in a small town here, which said every dollar gets spent eight times before leaving town.
The larger the town, the more times that dollar circulates, on average, before going elsewhere, because larger towns offer a wider range of goods and services, so the money isn't spent elsewhere.
Sure, some of those transactions are not taxable, but ours is a service economy. The engine which drives it is consumer spending, and those transactions, from the jiffy lube to the grocery store would all be taxed.
Not once a year, but every time money changed hands--at the retail or service provider level, especially in the food sector, because no one buys used food unless they are buying fertilizer.
This isn't going to happen once a year, but several times a year, maybe even in a month.
Every time, the cut is 22 cents off the dollar, off to the government coffers. By the third taxable transaction, the government has 53 cents of the original dollar.
Then why do Europeans have longer vacations, universal health care, and government paid education through graduate school?
If your statement were correct, it would seem logical that the 50% who pay little or no taxes would vote those things for themselves too.
Withholding makes it too painless. Make everybody write big checks four times a year, and change would come quickly.
Litigation is a free market remedy to perceived wrong.
But it's the voters fault?
So all those elected a$$holes who promise one thing and yet never seem to deliver are not culpable at all? They aren't committing fraud after all?
It isn't the voting that is the problem. It's a lack of a mechanism like the old Greek Ostracism that allows unprincipled, back-stabbing, anti-Freedom, Constitution ignoring sh*tbags in BOTH Parties to continue to safely ignore the electorate.
After all, with no real recourse to removing a bad legislator... what are you going to do? Yell about it online? Try and "vote them out" next time?
Until people are ready to FORCIBLY remove these people, there is very little that will actually change.
When Alexander Hamilton wrote that, he was referring to taxes on imports, considered luxuries at the time. Most Americans could get by with what they produced themselves or domestically produced, untaxed goods. An exception was whiskey - how did that turn out?
The FairTax not only leaves federal excise taxes in place, but taxes the tax.
The FairTax redefines "new" to mean previously untaxed. Buy a used car from Avis, pay the sales tax.
Not entirely true.
SEC. 803. TIMING OF TAX ON FINANCIAL INTERMEDIATION SERVICES.
The tax on financial intermediation services provided by section 801 with respect to an underlying investment account or debt shall be imposed and collected with the same frequency that statements are rendered by the financial institution in connection with the investment account or debt but not less frequently than quarterly.
If, for example, in a very small economy, a farmer and a mechanic, with just $50 between them, buy goods and services from each other in just three transactions over the course of a year
Mechanic buys $40 of corn from farmer.
Farmer spends $50 on tractor repair.
Mechanic spends $10 on barn cats from farmer
then $100 changed hands in course of a year, even though there is only $50 in this little economy. That $100 level is possible because each dollar was spent an average of twice a year, which is to say that the velocity was 2 / yr.
So in the example, each transaction was taxed as income or each transaction was taxed as consumption. Same difference.
The tax is on the commission, not the priciple investment.
The Mechanic buys $40 of corn.
The government gets $8.80 of that amount. The Farmer gets $31.20.
The farmer 'buys' a 50 dollar tractor repair. But he only got 31.20 from the mechanic, so he has to add in the $18.80 to get fifty bucks.
The Mechanic only got $39.00 from the farmer, (The Government got the other $11.00) but he does not have to add any in because he is only getting ten dollars worth of cats.
But the farmer only gets 7.80 of that ten dollars.
So what happened here?
First transaction was $40. But the farmer got $31.20, so he has to add money into the economy to make the second transaction, to the tune of $18.80, to get fifty bucks.
He spends the fifty to get the tractor repaired. The mechanic gets $39.00 of that.
He in turn buys ten dollars worth of barn cats, and the farmer gets 7.80. The farmer: Collected 31.20 + 7.80 for a total of $39.00. The mechanic collected $39.00. Total $78.00. The government collected $22.00. Total $100.00, right?
Um, Wrong. The farmer had to add in the $18.80 to make the second transaction.
If your statement were correct, it would seem logical that the 50% who pay little or no taxes would vote those things for themselves too.
We are already well along incrementally towards government funding of college and healthcare. "Free" college was a Dem plank in 2004. "Free" healthcare is about their biggest single issue this year. Just give them a couple more elections.
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