Topic: Ron Paul
What is a "Fair" Tax

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Ron Paul wants to abolish the income tax and replace it with "nothing". Here is some analysis behind this position.

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by Ivan from Oregon
(libertarian)
Sunday, March 9, 2008

Back in the mid- nineties I wrote a weekly column for a little conservative weekly in the Bay area in California. It was approaching "tax season", just as now, and I heard a piece on the radio that said that May1^st was "tax freedom day", when we stopped working for the Govt and started working for ourselves. It didn't seem right to me, so I did some analysis and came to a different conclusion.

I started to do a computation of all the taxes we pay. I listed all the different taxes I paid as an employer: income, FICA, FUTA, ETT, and on and on. One of the weirder ones was from the California "Department of Upholstery and Insulation" that paid the salaries of people that come and "inspect" the tags on the bottom of chairs, mattresses, etc. (we really needed that one). When I was done with my list, I had listed over 20 different taxes that were explicit and I hadn't even started on the "hidden ones" like the phone bill, gasoline, etc. I was tearing my hair out, but came up with a simpler method.

What I did was take the total budgets (spending) of the Federal, Calif. State, Santa Clara County and Milpitas City governments and divided each by the number of "families" (individual and joint filers) to obtain the average tax burden of each. Doing it this way includes all the "hidden taxes", not just the "income" tax, for example, the tax hidden in the phone bill, gas tax, sales tax, property tax, car registration, etc, etc. Comparing that family tax burden to the average family income, as provided by Govt, showed that Tax Freedom Day was sometime in late September, at the earliest. This analysis did not include the further burden of the cost of collecting all the taxes, around which an entire industry has been built. That provided the "fodder" for my weekly column, which I would plagiarize if I could find it.

The issue of taxation is discussed today almost exclusively within a paradigm that, after generations of brainwashing offers several erroneous "tenets". One is that an "income tax" is necessary to fund the activities of Govt. Another is that "corporations pay tax" (and don't pay their fair share). Yet another is that "property tax" is OK because only the richer people pay it. There are others, but these are the main ones.

To bring some sanity to the discussion, we must first realize that we are intermixing two separate topics: 1. How much Govt are we willing to pay for, and 2. How do we pay for it. Most discussions of taxation make an assumption that the current level of Govt is what we want, with maybe some "spending cuts". This article doesn't address the first issue, but the Ron Paul platform does - let's start obeying the Constitution.

In addressing the second issue - how do we collect the money to pay for the Govt we're willing to fund - we must first dispel the notion that corporations pay tax. If you think about it, the truth is that they don't "pay" tax, they collect it from their customers (us) as a cost of doing business, very similar to value-added-tax or sales-tax. We (the people) pay it when we buy their goods or services from them. More on this below.

Ultimately, the money to fund Govt has to be provided by "we the people" because we are the ones that create wealth. The funding for Govt in the first century and a half came from duties, imposts and land sales, with some exceptions (Lincoln printed his own money to fund the civil war, but since it was backed by nothing it soon inflated to nothing - "it's not worth a Continental" came from that era.)

The Constitution specifically does not allow a tax such as the "income tax" to exist. Even the 16^th Amendment did not allow any new power of taxation, as the Supreme Court has ruled. Yet we impose it anyway, through a coerced "voluntary" system. A progressive tax on income is a plank in the Communist Manifesto, and is one of the means of enslaving the populace. I don't want to debate the Constitutional validity of the income tax here. But we can compare the collection of money this way against constitutional principles.

The way we collect the "income tax" is the most intrusive of ways we could do it, as regards our personal privacy. We are forced to disclose how much we earn, from whom and how we spend it. Is this liberty? Moreover, the revenues raised by this "income tax" all go to pay the interest on the money created by an unconstutional private bank, loaned to us at interest. Believe it or not, I have had reasonably intelligent people ask me, "how will we fund the functions of government without this tax?" When Ron Paul says he wants to get rid of the income tax and replace it with nothing, the MSM and the brainwashed sheeple call him a "kook" and an "extremist".

To these, I reply, "being an extremist when it comes to personal liberty is the only way to go!" Being an "extremist" in this regard is saying, " I will not compromise my God-given rights for any stupid theory you may have about societal values, PERIOD".

Once we decide how much Govt we're willing to pay for, one of the less intrusive ways to collect the money is through the old-fashioned excises and imposts ( land sales too, since the Feds shouldn't "own" land that rightfully belongs to the States - over 10 miles square). For example, since we've given corporations the status of "persons", we could have them collect a levy on wholesale goods. We could use the IRS to make sure they're doing this according to the rules, or better yet, we could use the collection organizations the States already have, and collect the revenue without disturbing the privacy of the sovereigns (us) and not incur a lot of overhead. This kind of system would also capture imported goods to give our businesses a level playing field. The wealthy would thus pay more "tax" as they spendmore money than the poorer people.

At a more local level, the "property tax" needs to be examined in terms of our liberties.  Taxing someone because they own something seems unconstitutional as he** to me.  Charge them for the service, (such as fire dept. etc), or deny it to them if they don't want to pay, but don't use that as an excuse to steal their property.

I'm sure there are more competent people than me to figure out some system that's "fair", but absolutely safeguards our individual liberties. Ron Paul is one of those people.

©2008 Ivan from Oregon, all rights reserved. You must have written permission from the author in order to republish this work.
Published: Sunday, March 9, 2008
Last modified: Sunday, March 9, 2008

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