Replies

Rather than post several different items, I will address several comments in just this one post.

LenS: I'd hate to see the property taxes, sales taxes, and tariffs that would result.
Satadru: I oppose a consumption tax system. It is such an efficient way to raise money, that the federal govt will collect a lot more in tax revenues which will increase the size and scope of the federal government. As such, it is a bad idea, unless the rate is very small.
kcpopps: I've read that the intent would be to start out at 15-17% with the rate set to decrease over time. I would be leery of trusting the politicians to follow through on that and leave it alone - even if it were working perfectly.

All of these statements mistakenly assume that a National Retail Sales Tax (NRST) would have to be high. Actually, a NRST has a built-in mechanism that works to force tax levels down, where the income tax makes it easy to increase tax levels. Our current tax system is evidence of the ease in which the income tax is raised. That is because most people do not consider taxes as having ever been their money, since taxes are taken out before the taxpayer ever sees the money. The NRST, on the other hand, reminds the taxpayer just how much he is paying in taxes every time he pulls out his wallet. That constant reminder will have the effect of driving sales tax levels down and keeping them low.

Lens: Nor would I like to see what was left of our military.
TopQuark: Oops! You forgot to tell us who will repair the roads, pay for the army and armements, etc.
A CA Guy: It would be good if they went with the Reagan model of a top level of 28%. But the idea of ending it would be crazy since the country can't run a military, roads, services and hospitals for free.

There are a couple of things to consider here. In all probability, if the income tax is abolished, another system of taxation (probably a tax on consumption) will certainly replace it. Any such system of taxation would be designed to be revenue neutral, though it need not be, as explained below.

According to the OMB, in recent years, federal expenditures for national defense has been around 16 to 18 percent of total revenue. Only another 1 or 2 percent is used to fund government overhead (salaries and infrastructure for Congress, the courts, etc.). So, for less than 20% of what we are currently paying in taxes, we could fund 100% of the Constitutionally mandated functions of government. Granted, that this is not likely to happen. But, as long as we rely upon any form of income tax for revenue, it will certainly never happen. It is the difference between not likely and never.

majic12: I believe it was KARL MARX who advocated the graduated income tax as one of the 10 planks of the COMMUNIST MANIFESTO. What else do you need to know to support a flat tax?

Just one other thing. Our current progressive income tax began as a flat income tax.

Marx would be quite pleased with a flat income tax, because he knew that once you have a flat income tax in place, it is only a small step to a progressive income tax. In fact, the ONLY way that you can keep a flat income tax from becoming a progressive income tax is to not tax income at all.

Any tax based on income will very soon become progressive.

I don;t agree with all of Harry Browne's ideas, either. But then, I doubt that there are very many republicans who agree with all of Dubya's ideas or those of their own representatives in federal and state governments. That's just normal. The sad thing is that the leadership of the GOP has become so afraid of losing their own power, that they are now willing to compromise their principles, rather than face even the slightest risk of facing a tight election race. As a result, I find that I now agree with Harry Browne's solid stand on his principles (though somewhat different than my own), much more than I agree with the attitude of capitulation and appeasement, so obvious in Dubya and the GOP leadership.

Thank you very much for that post. BUMP.

Yes, it's unlikely. It's difficult. Congress will resist losing their stranglehold. But that doesn't mean we should give up.

I like the following quote, which does not specifically mention the tax issue, but is still appropriate.

There is no guarantee of success in the fight for individual rights and freedom.
There is a guarantee of failure if you do nothing and remain silent.

I bring up the 28% rate bacause that was the rate where the treasury packed their accounts with taxes because people were allowed to keep more. At 28% they would work much harder.