UNCLE SAM’S SHAKEDOWN …
It’s that time of year again … when our least favorite Uncle (Sam) pays us a visit to take anywhere between 15-40 percent of our income (depending on how much we made last year).
The irony? Government takes its cut from us before we’ve even finished earning it … as “Tax Freedom Day,” i.e. the day when the average American has worked enough to pay off his or her “debt,” doesn’t fall until April 21 this year. That’s three full days later than it was last year – a nod to the sluggishness of the so-called “recovery.”
Of all the issues this website champions, individual income relief is by far the most important.
Why? Because the income tax is a drain on national and state economies – directly stifling consumerism and job creation. Doing away with it would unleash a wave of entrepreneurship, employment and economic activity – specifically among small and medium-sized businesses.
It would also end the increasingly corrupt, increasingly costly Internal Revenue Service.
So … what would replace all the lost revenue?
Good question. First of all, we don’t buy into the premise that “lost” income needs to be replaced. Our $4 trillion government is a monument to excess – and a good first step in providing tax relief would be stopping needless expansion in its tracks (rather than ballooning government to $5 trillion a year over the course of the next ten years, as the “Republican” budget plan proposes).
Beyond that, there are literally hundreds of billions of dollars worth of spending that ought to be cut – foreign aid, corporate welfare, entitlements, social programs, superfluous bureaucracies, military duplication, etc.
To the extent a portion of revenue needed to be replaced on a short-term basis (for the purpose of debt repayment), we would recommend a limited consumption-based tax – one imposed without market-distorting exemptions or special interest carve outs.
Such a limited, impartially imposed consumption-based tax would achieve temporal neutrality in regards to the natural allocation of resources – replacing our current command-driven structure with a true free market.
U.S. Rep. Jim Bridenstine (R-Oklahoma) introduced legislation last year to do away with the Sixteenth Amendment – and abolish the IRS. His bill doesn’t specify a specific consumption-based replacement, but would provide for a two-year transitionary period during which the specifics of the new tax system could be developed.
We support Rep. Bridenstine’s proposal – as should any federal lawmaker who is serious about tax reform.