No matter how tax revenues are raised, reduction of government spending is really the key to solving the Tax Crisis.
Removing complexity in accounting, tax planning and reporting is key to removing the burdensome costs of the income/payroll tax system and returning liberty and privacy to the individual:
Flatten the Tax Code before it Flattens Us, Lawrence W. Reed; Makinac Center April 1, '97
The work of economist James L. Payne is perhaps the most authoritative and exhaustive available on the cost of today’s federal income tax code. He has demonstrated that most of the expense of compliance does not show up on the government’s books because businesses and individuals in the private sector are paying it—in time and bills from tax preparers. In his 1993 book, Costly Returns: The Burdens of the U.S. Tax System, Payne assembled data from the IRS and other sources—public and private—and arrived at a startling conclusion: For every tax dollar collected and spent, Americans pay an additional 65 cents in collection and compliance costs!
We must . . . End Tax Slavery Now; Nov '97
by Jarret B. WollsteinHOW MUCH DO YOU REALLY PAY?
According to the Tax Foundation, in 1994 the average American paid 22.4% of his or her income in federal taxes, plus 11.8% in state and local taxes - 34.2% total.
But that's just the beginning! Dr. James Payne of the University of California found that in addition to direct taxes we also pay huge, hidden taxes including:
- Compliance costs - record keeping, monies spent on tax planning, computers and software purchased to fulfill IRS requirements, etc.
- Enforcement costs - IRS audits, field investigations, service center corrections, criminal investigations, litigation, and forced collections.
- Emotional, moral and cultural costs - families forced onto welfare, time and creative energy lost figuring out how to avoid taxes, etc.
For every $1 we pay in direct taxes, we spend an additional $0.65 in compliance costs. And even that figure doesn't include the cost of import duties, license fees and other government regulations.
Repealing Federal income and payroll taxes accomplishes the reduction of burdens and frees the individual from the inherent intrusiveness of the current system:
H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer: http://www.fairtax.org & http://www.salestax.org
Removing programs is key to tax rate reductions:
23%........... HR2525 (NRST) rate on consumption expenditure
14.91% ..... rate if Social Security and Medicare were eliminated
14% .......... rate if Nat'l Endowment for the Arts were eliminated
11.9%........ rate if Dept. of Education were eliminated
10% .......... rate if welfare were eliminated
9.8%.......... rate if foreign aid were eliminated
etc.
Hmmmmmm....... It's do able, with time and effort, once the blinders are removed from the electorate and every one participates proportionately in the tax system.
Walter Williams, World Net Daily, 10-25-2000
According to the most recent U.S. Treasury Department figures, in 1997 the top 1 percent of income-earners (those with income of $250,000 and higher) paid 33 percent of all federal income taxes. The top 5 percent of income-earners ($108,000 and over) paid 52 percent, and the top 50 percent ($36,000 and over) paid 96 percent of income taxes. Guess what the bottom 50 percent of income earners paid?
If you're among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore's silly "risky scheme" talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
Milton Friedman as quoted by Northwest Florida Daily News, 10-16-2000:
- "If we're to have an income tax, it's a good thing for everyone to pay at least a nominal amount," he said. "If non-taxpayers become a majority in society, what would restrain them from voting for ever higher taxes on others?"