Posted on 11/01/2017 6:48:31 AM PDT by Kaslin
A big tax bill is all it takes to see how perverse and dysfunctional our government has become.
Why are the halls of Congress now crawling with special interest lobbyists looking for opportunities to carve out some new benefit, or to protect existing special interests in the tax code?
The objective of the tax bill Republicans want to piece together is noble. Make the code more simple, logical and easy to use. The tax code should be an exercise in civic responsibility in which all participate to pay for the legitimate functions of government.
But what are those legitimate functions of government? What happened to that discussion? Why when the plate goes around in church do all feel privileged to contribute and participate in a noble cause? And why when government collects our taxes do we want to run and hide?
The answer, of course, is simple. What goes on in Washington is no longer a reflection, in Lincoln's famous words, of government "of the people, by the people, for the people." The tax code has become an instrument of government power brokers to extract money from private citizens to finance pet schemes of Washington's political class.
According to American Enterprise Institute economist and blogger Mark Perry, some 70 percent of the federal budget, about $2.6 trillion, is transfer payments -- funds recycled from one set of private citizens to others. Most of federal government spending is not about paying for functions of government, but for social engineering, meddling in our lives.
According to the Tax Foundation, compliance with the U.S. tax code consumed, in 2016, 8.9 billion hours at a cost of $409 billion.
Per Giving USA, total private charitable contributions in the U.S. in the same year, 2016, came to $390 billion. We spend more complying with the tax code than what we give in private charity.
The $390 billion in charitable giving comes to about two percent of our GDP. The Biblical guideline for charity is the tithe, ten percent. From this perspective, Americans sound stingy. Are we? No, I don't think so.
Much of our charitable spirit is swept up by government.
According to the Congressional Budget Office, federal government spending on welfare and anti-poverty programs in 2016 was $750 billion. If we look at our welfare and anti-poverty spending as government mandated compassion, it comes out to almost twice what we give in private charity. Or about four percent of GDP. Government welfare and anti-poverty spending together with private charity amount to six percent of GDP, getting us closer to the ten percent.
Suppose Congress had the resolve to lock out the lobbyists and get rid of the complexities and special interest deductions in the tax code. Suppose we simplified it all so there was a simple flat tax that could be filed with a postcard. If that saved half the $400 billion in compliance costs, enough funds would be freed up to the private sector to finance charitable programs two and half times greater than the $80 billion food stamp program.
Bookshelves sag with reports and research showing the waste, inefficiency and counter-productiveness of our $750 billion in welfare spending. Suppose I suggested giving this four percent of our GDP back to taxpayers in the forms of tax cuts?
Many will say, "No, Star. These funds would not get redirected into private charitable giving."
I say, "Why not?" Whenever we have disasters, like hurricanes, volunteers and private charity show up in droves.
Americans are compassionate and creative givers. Can we really be worse off by letting freedom work?
Wouldn't we all be much better off if we stopped using Washington as a massive social-engineering, money-recycling machine, and got back to a simple tax code designed to finance the limited functions of government, as laid out in our Constitution?
We all hope that a simplified tax code would emerge. (Really simplified, not just one or two meaningless paragraphs which would allow our simple minded politicians to defend their corruption.)
My bet is that it will not happen.
I really hope that I am wrong...very wrong.
But I really feel that I will not be wrong.
Sad.
The only way to do that is to force the lowlifes in congress NOT to accept bribes, kickbacks or perks from the "Special Interests", and these same lowlifes would have to be the ones to pass laws or regulations prohibiting these bribes. How much chance is there that that will happen??
10% pure, flat income tax. No deductions, credits, or loopholes.
Yeah I’m not a special interest the ass clowns have jumped the shark. I shouldn’t pay taxes on taxed income nor pay taxes on money spent on shelter. My income my $.
An opening gesture would be requiring all individuals, businesses, and congressional critters to comply with the same burden as the rest of the country.
Special health care, retirement plans, or, even, the Americans with Disabilities Act. Try walking along a sidewalk in DC or operating a wheelchair.
The DC-ites give automatic exceptions to their club members.
Steve Forbes was so right it wasn't even funny....
And by brilliant CPA gnome tells me, if it happened they would convert their practice to helping small businesses manage and invest their money from a CPA's perspective, So all those tax folks won't have a problem finding employment, but the paperwork to comply is drowning us all, and it a game of musical chairs that is a bureaucratic time waster.
I said eons ago here on FR, we didn't need gay marriage we needed a flat tax so these couples could be treated more equitably ( not that a good CPA / EA couldn't use the existing code in their to help them, they could and did ), no one here got it, and yes I spent time in the tax biz, I am not pulling this out of my ear.
So let's say the "post card" is here, one deduction, one deduction only Vasili, HealthCare. All you spend on healthcare is tax free, and if you want to buy a policy for someone in need ( Hollyweird put you money were your mouth is and buy a bunch of policies if this became a reality ), that is deductible too.
All your "Non-Qualified" monies become essentially Roths, and only early withdrawal penalties apply, almost a mute point because interest, dividends and capital gains get taxed once at the source, like Steve Forbes noted eons ago.....
Correction Non-Qualified should be Qualified...
Unfortunately for this plan, every single voter is a member of at least 7 or 8 ‘special interest’ groups.
Just to expand, most of the 70% in transfer payments is Social Security, Medicare, and Medicaid. The idea that these programs could be stopped or greatly reduced without a gigantic ruckus is not credible.
This is how taxation works:
1. Congress creates a tax code.
2. Donors get congress to put in special exemptions.
3. Congress complains about unfair tax code, while pocketing donations.
4. Congress passes tax reform, elimination special exemptions.
5. go to #2.
Tax reform is today’s guarantee of tomorrow’s special interest donation.
A good plan. But IMO a much better plan is a consumption tax - a national sales tax.
The problem with any income tax is that it gives the government access to information that is NONE OF THEIR BUSINESS. It is none of their business what my profession is, where I work, or how much money I make. With a flat tax, they still have those records. With the current tax system, they also know what my mortgage payment is, how much I give to charity, how much I spend on various deductible categories, how much I have in the bank, in the stock market, etc., etc.
Veterens should not have to pay federal income taxes. Only payrole taxes.
IMO, those programs can be stopped, but not cold turkey. People who have worked all their lives and paid into SS and Medicare with the promise of SS income and Medicare can’t have the rug pulled out from under them.
But the next generation can go without. There are many, many possible ways to do this. One possibility is a forced retirement savings/investment account. One that the owner controls, not the government. No “lockboxes” that the government has access to and can dip into to fund the next boondoggle.
For those who are mid-career, they could stay in, have some blended version of SS/private investment, or could be bought out, among other options. It should be the citizens choice of which option to choose.
I think another of the big problems with taxation as it currently stands is that it is a welfare program for tens of thousands of bureaucrats. (I’ve seen numbers between 79,000 and 110,000 employees for the IRS).
Try finding one who can give an answer to a tax question in April. They are all clueless. I would bet the vast majority of these people could not find jobs in the private sector because they do very little and are overpaid for what minimal skills they have. Not all, but most. I would be curious to know how many are affirmative action hires.
I’d also be curious to know how many are political hires.
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