Liberty in America
columnist: rtbohan

Topic: Taxation
Taxes, Tax Spin and Real Reform

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"The tax reform that will actually help most Americans is the reform in how taxes are spent. When Uncle Sam spends less money and...stops borrowing money every American will benefit.--George Phillies, Libertarian Candidate for President

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by rtbohan
(Libertarian)
Thursday, April 17, 2008

George Phillies,   candidate for the Libertarian Party's nomination for President has said what needs to be said and spelled out by all Libertarian and conservative candidates. Ron Paul has made his position clear on the question. Other candidates need to do so.

Conservatives and Libertarians agree on the basic idea that the income tax should be abolished.  But they are often vague about what happens then.  Some Libertarians and conservatives say they want a flat tax, but are somewhat vague about the nature of that tax.  Are they talking about a sales tax?  Are they talking about maintaining the income tax but doing away with the progressively higher rates on higher incomes?  Conservatives talk about the 'Fair Tax" as the solution.  From the description it would seem to be a value added tax. If it is the latter, it would mean a tax system which is based on "soak the rich" would be traded for one in which we "soak the poor.  Other versions include a welfare program as part of the tax plan, which raises real questions about a movement towars smaller govrenment and fewer entitlements.  Only Ron Paul, so far, has stated the clear position that the income tax should be abolished and replaced by nothing.

George Phillies yesterday put frrth an analysis ot the tax question which all Libertarian candidates and Libertarian voters should take to heart.

Professor Phillies is not among my favorite people. He describes himself as a Left Libertarian and represents a particular sector of the Libertarian spectrum.  That he is a libertarian I do not doubt, nor do I reject his position on the issues he considers most important.  But he has an unfortunate habit of trying to read those who occupy a different part of the spectrum out of the libertarian movement and out of the party.  He denies, for example, that Bob Barr and Ron Paul are Libertarians because they hold conservative views.  In fairness, it should be noted that some supporters of these two men deny that Professor Phillies is a Libertarian because he is a Liberal.  I don't agree with any of the three in every  position they take, but I accept them as Libertarians.  Where we disagree, we should fight the issues out.  Given the broad areas of agreement we should acknowledge the work and the good faith of  others.

In this case, I must praise Professor Phillies because he makes some points and advances arguments that  Libertarian candidates and Libertarian voters ought to respond to.

His first point is that every tax imposed by the government has an identical purpose:  to take money out of somebody's  pocket and transfer it to the government to do with what it pleases.  Suggesting the abolition of one tax (the income tax) sounds good to those who feel that the graduated income tax is unfair. It sounds even better when a candidate suggests that he has a different tax plan which will be easier and more fair.  But, as Professor Phillies points out: "It's always easier to make imaginary taxes sound simple.  After all, lobbyists and taxpayers concentrate on adjusting real taxes, not taxes that don't exist.  But once a real tax has been legislated, you can be certain that lobbyists will be hard at work persuading Congress to adjust the rules".

He also points out the it is not a step forward to end injustice to one person by imposing unjust burdens on another.

"[C]hange for the sake of change may hurt large numbers of fellow Americans.  If we eliminate capital gains deductions Americans who have liquidated stock holdings...they...they might have kept without our tax laws would be forced to eat their losses.  If we change the income tax into a value added tax, every American who put after tax money into a Roth IRA will have that money taxed again..."

In other words, the voters and the candidates should concentrate on cutting spending rather than tinkering with taxes.  President Bush has proposed a $3 trillion budget for next year.  The Democrats have criticized the budget because they feel it does not call for enough spending on their favorite programs.  The Libertarian candidates ought to be specific and sweeping in describing where they would make cuts.  Professor Phillies seems to believe that cutting programs of "corporate welfare" will be sufficient.  Some of the conservative Libertarians believe that cutting individual entitlement programs will be the answer.  In fact, as the late Harry Brown said, the place to start is with your favorite government program.  Would you be willing to do without that benefit if it meant you would never have to pay income tax again.  That is the place to start.

As Professor Phillies says, "The tax reform that will actually help most Aermicans is the reform in how taxes are spent.  When Uncle Sam spends less money and..stops borrowing money, every American will benefit."

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2008 rtbohan, all rights reserved.
Published: Thursday, April 17, 2008
Last modified: Thursday, April 17, 2008

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