Dump the income tax

Submitted by Bill St. Clair on Mon, 28 May 2001 10:03:28 GMT
FROM MOUNTAIN MEDIA
FOR IMMEDIATE RELEASE DATED APRIL 15, 2001
THE LIBERTARIAN, By Vin Suprynowicz
Dump the income tax

Introduced by the Woodrow Wilson "Progressives" in the years just before the First World War (along with such other strokes of genius as the Federal Reserve Board, direct campaign-cash bribing of U.S. senators, alcohol Prohibition, and the Harrison Narcotics Act), America's income tax was first advertised as a surcharge on only the richest Americans.

This virtually imperceptible levy of 1 or 2 percent on the yacht-and-mansion set was to rise no higher than 7 percent, and then only on those who earned at least half-a-million bucks a year -- real money, back when a $20 gold piece could buy the equivalent of $250 in modern goods.

A funny thing happened just as the economic boom of the 1920s got rolling, though: at virtually the same time visionary investors were starting to get rich on the 1920s equivalent of the World Wide Web -- Pierce Arrow, General Motors, Goodyear and Standard Oil -- the darndest thing happened to the number of Americans officially reporting annual incomes of a million dollars or more: They began to dwindle away.

No, they hadn't all moved to Switzerland. Rather, in the first major wave of unintended consequences flowing from America's great experiment in socialist redistribution, the fat cats had reached out and found advisors willing to invent two new professions for them: the tax lawyer and the tax accountant.

Suddenly rich people were investing in fine art and donating it to museums for the newfangled "tax deductions." (Yes, art is nice. But this didn't create nearly as many jobs as a new steel mill.) And previously lucrative corporations had to shrug and inform Uncle Sam with heavy heart that they were barely breaking even, what with all these new "licensing and consulting fees" they were suddenly paying to newly incorporated shadow entities in places like Switzerland, Guernsey, and the British Virgin Islands.

The games had begun.

The "emperor's new clothes" for the mewling collectivists who still endlessly whine that any tax cut will "unfairly benefit the rich" (read: unfairly reduce the amount of loot I get to allocate for my vote-buying)?

The one thing these class warriors don't want anyone to notice is that - after decades of lobbying for loopholes - the rich can shelter so much of their income today that their accountants often recommend they pass up a few deductions just "for appearance sake." When Standard Oil heir Nelson Rockefeller appeared before the Senate for confirmation as vice president in the 1970s, he was asked what he'd paid the previous year in income taxes. Mr. Rockefeller replied that he had not paid a thing. The Congressional Record does not record the way his fellow millionaires in the Senate responded, but there are recurrent reports that the senators cheered.

So who's left carrying the bulk of the burden -- not only of the actual bill, but also devoting hour after frustrating hour to deciphering and filling out all these government forms?

The middle-class wage slave, of course -- since his or her employer dutifully reports his or her full compensation to the IRS on a form W-2 each January.

Tax rates on these everyday Joes and Janes have reached the point where the Tax Foundation reports 123 days per year are now spent working for Uncle Sam -- a far higher percentage of our time than sharecroppers were required to work for Massa down on the old plantation. Where Americans were able to keep for themselves all they earned after April 22 as recently as 1994, the foundation reports Tax Freedom Day now doesn't arrive till May 3 -- the latest date in history.

Of course, that's not all attributed to the federal income tax -- Medicare and Medicaid, sales and excise taxes, property taxes, state and local levies are all factored in. But the federal individual income tax remains by far the most burdensome of these.

Most Americans are willing to contribute something to fund the legitimate, duly delegated activities of government. No one wants to see our ambassador to France going without neckties and socks. But does anyone believe that by spending 10 times as much as our great-grandparents did, we now get a government that does a 10 times better job defending our liberties?

The IRS and its code are so complicated that the General Accounting Office reports IRS employees themselves give wrong answers to taxpayer inquiries 47 percent of the time -- after failing to answer the phone 37 percent of the time in the first place.

Americans hate the tax code and the arrogant, inconsistent agency that enforces it ... and with good reason.

Since April 15 falls on a Sunday this year, numerous 1040s -- and more "automatic extension" forms than ever before -- will hit the mailboxes by midnight Monday. But "compliance" rates are nonetheless falling markedly, as Americans wonder how they can possibly be paying "their fair share" under a system more fraught with loopholes and complexities than the worst fever dream ever to plague the bureaucrats of Byzantium.

It's time to trash the whole system. A flat tax -- with no redistributionist "brackets" -- does sound like a slight improvement. But can we really trust this current bunch not to gimmick the thing up with more socialist claptrap at the last moment? I don't think so. Besides: such a scheme would still violate Mr. Jefferson's sober advice not to "take the bread from the mouth of labor." Why squander the hunger for reform on such a paltry adjustment?

A national sales tax? There's a recipe for jailing kids who sell Kool-Ade on the sidewalk. And again, we'd just be trading new tyranny for old.

Half of the federal government's revenues still come from excises and other sources outside the personal income tax. To find a federal government spending half as much as it does today we would have to go back only a dozen years. Does anyone remember sighing with frustration during the administration of Ronald Reagan that "Darn it, this federal government is just way too small"?

No, the best reform of all would be to get rid of the current federal income tax, and replace it with ... nothing.

Vin Suprynowicz is assistant editorial page editor of the Las Vegas Review-Journal. Subscribe to his monthly newsletter by sending $72 to Privacy Alert, 1475 Terminal Way, Suite E for Easy, Reno, NV 89502. His book, "Send in the Waco Killers: Essays on the Freedom Movement, 1993-1998," is available at 1-800-244-2224, or via web site www.thespiritof76.com/wacokillers.html.

Vin Suprynowicz, vin@lvrj.com

"When great changes occur in history, when great principles are involved, as a rule the majority are wrong. The minority are right." -- Eugene V. Debs (1855-1926)

"The whole aim of practical politics is to keep the populace alarmed -- and thus clamorous to be led to safety -- by menacing it with an endless series of hobgoblins, all of them imaginary." -- H.L. Mencken

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