Now before I launch into this, let me clarify that this is bigger than just one party or one leader. Because this is a trend that has been going on since the passage of the odious 16th Amendment, the one that allowed the government to punish people for making money. And it has been highlighted as ridiculous as the taxes have risen, but not as quickly as our debt. And while spending is the evil that will ultimately destroy us from within, the first step is getting it clear on paper as to how much it cost us when the government bends us over and goes in hard and lube-free.
First, a minute and a half from Heritage that I found just before I began the writing of this post that explains it very simply:
The Tax Code Explained (without all the requisite obscenities)
I really need to ad the obscenity disclaimer, because I can't usually discuss what is wrong with the tax code without a few choice words. So I'll condense it down to three key problems: Special Interests, Taxing Behavior, and Lying Bastards (told you).
Special Interests - I generally don't have a problem with the idea of a special interest group. After all, they run the gamut from corporate interests to labor groups, rabid right-wingers to loony leftists, broad-based movements to single issue groups, think tanks to grassroots. A special interest is simply a group that advocates for a certain position on any issue, marshaling resources that individuals can't.
Where it goes wrong in the tax code is that most every special interest wants to use the tax code to benefit them, either directly through a non-profit status, give them exemptions or credits for their , or to fund their pet project/cause/fund/etc. Two examples that jump out right now would be the green tech-pushing groups and the ethanol producers. But that's just the first that pops up. Whether it's a welfare-for-votes scheme (government run health care), something that sounds good on the outside but is insidious as shit (No Child Left Behind), or a corporate/union welfare situation (all the bailouts), it comes out of tax coffers. And then there's the laundry list of deductions and credits and insanity that have some people actually getting money from the government after filling out their taxes (not just refunds). And it's all for specific groups for votes in the future.
Taxing Behavior - It used to be that if the government wanted to stop an activity, they made it illegal, and turned it into a law enforcement nightmare (Prohibition, the war on drugs). But the government got enlightened one day and said, "why not just tax their asses?" And so the soft tyranny of taxing behavior began. Smoking is bad; tax cigarettes. People aren't using the nifty mass transit; tax the gas some more. The poor are eating too much fast food; tax McDonalds. And so it continues. And while you can come up with a rationalization why taxing a behavior is a good idea (and the anti-tobacco zealots are ready to scream), it's still the government profiting off of a behavior they have decided is "bad" but not bad enough to ban. Another example would be the pot legalization movement. The selling point that seems to be carrying the day in near-bankrupt California? The politicians can TAX IT!
And it's just as bad with the credits and deductions. Add solar panels; get a credit. Squeeze out babies; get a credit. Enslave yourselves in marriage; get a credit. Buy a car (preferably from a government-owned company); get a credit. And in corporate America, EVERY SINGLE DECISION has to go through an examination of the tax implications of doing it. The government health care mandate, for example, may be something that determines whether it's better to automate, outsource, or go with temps rather than hiring that one person that means you have to start paying for your employees' health care.
Lying Bastards - This one should be self-explanatory. Every election, we get to hear how each candidate is going to lower your taxes, or how another group will pay their "fair share" or how they're going to close loopholes (while opening others). It's all a giant Washington shell game. It ties back into pleasing the special interests that each candidate is trying to handjob into votes. And it goes back into using taxes to manipulate behavior. But it's all about obscuring exactly how much everyone pays in taxes, from the embedded costs of corporate taxes, to tax forms that require paying other people to fill them out, unless your taxes are that simple and/or you are that good with filling out online forms.
Either way, understanding how your taxes work to subvert you is an exercise in running shit through a sieve. Except actual excrement is more pleasant to work with.
What is Radical Tax Reform?
Because unlike spending programs, which could theoretically be starved and killed depending on the ferocity of the people in power (ask NASA), the tax code simply shifts to accommodate those in power. And there are very few statesmen left in Washington that could really push through a solution that would last.
So our tax system is unfixable. And if you can't fix it, then the only option is to tear it completely down, and come up with a radically different solution.
I can't think of a single reason we should keep our current system (although if you like pain, you can make the case for continuing the soft tyranny). And what I'd like is to see what radical ideas are out there. Requirements for the plan to be radical include:
- Wholesale replacement of the existing tax code.
- Repeal or modification of the 16th amendment to limit the government's control over the new tax code.
- Significant attrition or elimination of the IRS.
- Elimination of the ability of the federal government to target taxes to a narrow group.