As I write this it occurs to me that I could be putting a big target on my back for retaliation by an out of control government agency but this needs to be said and I am certainly not the only person saying it.
We need to get rid of the IRS. It is an agency that has become bloated and costs us a ton of money to operate. While I would like to abolish the income tax as well I understand that is not likely to happen so the next best thing would be to abolish the IRS and simplify the tax code so that every wage earner pays a flat tax.
The code can be simplified so that ALL income is treated the same and taxed at one flat rate. I believe that John Lott has calculated an 11% tax rate would fund the government and provide the funds necessary for Social Security and Medicare thus eliminating these as separate deductions. Since that money goes to the general fun anyway there is really no need for separate deductions.
Whatever tax rate is decided upon all wage earners would have that amount deducted from every paycheck. There are two ways to handle other income. Either the people paying the income (dividend, interest, etc) could deduct the percentage and send it to the Treasury or those who earn it can send a check for the amount owed when taxes are filed.
There would be no need for all of the deductions that wage earners use and there would be no need for tax credits. We level the playing field (as liberals like to push) and all wage earners pay the same amount. Wealthy people would pay more in gross amount but the percentage would be the same for everyone. The amount of Social Security people receive can be calculated on formulas based on income.
I would recommend that income up to $3000 be excluded from taxes and all amounts over that be taxed. This would allow children to earn dividend and interest on accounts and allow students to take summer jobs without worrying about a tax burden. All income over that regardless of age or source would be taxed at the national rate.
Treasury can use a small contingent of workers to check computer databases to ensure those who received income paid taxes (and that would be mostly self correcting because we would all be paying the same amount). They could check that those who received income from other sources paid taxes on the additional income.
We would have no need for all these audits and no need for all the federal agents. We could abolish the IRS (the ideal solution) or drastically reduce it in size to only those needed to check returns.
Ideally we would get rid of the agency and Treasury would establish a small section to check. Perhaps we could even have some computer program that just checks if a Social Security number received wages and then see if taxes are paid for them. They can sort this out but whatever happens it will be better than what we have.
The most ideal situation would be to have a national consumption tax and abolish income taxes all together. If you buy something (consume) you pay federal taxes on it. This would tax consumption rather than production and would be ideal, at least in my mind.
I doubt this will happen. The most likely outcome would be Congress taxing income AND charging a consumption tax. Their appetite for our money never ends.
No matter what is done there should be a provision in the law that the tax rate (flat or consumption) cannot be raised unless 75% of both chambers of Congress vote to do so.
If we allow them to just increase the tax rate pretty soon we will all be paying most of our income to the government.
We need to pay the bills and get our debt cleared out and we need a tax system that accomplishes this and does not require countless hours to comply with.
A flat tax allows everyone to be patriotic and have skin in the game (what Joe Biden says paying taxes is all about) and it would allow us to get rid of the IRS, an agency that has become a political weapon. It allows us to comply without worrying about mistakes that could bring the wrath of the IRS down on us.
Remember, we can’t plead the 5th with the IRS and we can’t claim mistakes were made and expect forgiveness they way they are now doing…
This does not account for corporate earnings and tax. A national coprorate rate of about half the current rate on all income would be sufficient if we remove all the corporate deductions. That is an issue for the Treasury and Congress to work out. Perhaps Treasury would need a corporate tax division that had simple rules to follow so every corporation pays taxes and friends of one politician or another do not get special treatment. It would also be wise to have a system that encouraged investment here and discouraged overseas tax shelters.
Never surrender, never submit.