The income tax threatens your liberty


This year's election promises are just the latest version of the scam
Regular readers know I've nothing but contempt for the income tax. That's what let the Federal government assume that you are guilty until proven innocent. That's what turned your bank into an unpaid spy for the FedGovs. And that's the point where I think individual freedom was sacrificed for the greater good.

Let me remind you of a couple things.

The top 1% of taxpayers EARN 22% of all income, but PAY 40% of all income taxes.

The top 50% of taxpayers EARN 88% of all income, but PAY 97% of all income taxes.

The United States has the most progressive income tax system on the planet. And that is WITHOUT Obama's promises to "spread the wealth."

But a new study on inequality by researchers at the Organization for Economic Cooperation and Development (OECD) in Paris reveals that when it comes to household taxes (income taxes and employee social security contributions) the U.S. "has the most progressive tax system and collects the largest share of taxes from the richest 10% of the population." As Column 1 in the table below shows, the U.S. tax system is far more progressive—meaning pro-poor—than similar systems in countries most Americans identify with high taxes, such as France and Sweden.

Even after accounting for the fact that the top 10 percent of households in the U.S. have one of the highest shares of market income among OECD nations, our tax system is second only to Ireland in terms of its progressivity for households.

The table also shows that the U.S. collects more household tax revenue from the top 10 percent of households than any other country and extracts the most from that income group relative to their share of the nation's income.

But it's all for the best right? People paying for those less fortunate?

Not exactly. It seems like if people have a choice, they vote with their feet when it comes to high taxes.

Politicians love to figure out ways to rape and pillage minorities in order to win votes from majorities, and this is why class-warfare tax policy is a common tactic. Fortunately, globalization is making it more difficult for politicians to implement punitive tax laws. When rates become too high, it is now increasingly easy for productive resources - including labor - to escape across national borders. This is leading politicians, even in places such as France and Germany, to lower top tax rates. In our new book, Global Tax Revolution, Chris Edwards and I explain how this process of tax competition is an amazing liberalizing force in the world economy.

Competition. Got to love it. It means that even governments have to listen to taxpayers.

And since it's an election year, here's my tax plan again. Since I am quoting me, I get the technopagan green.

Rescind the 16th Amendment. Add another amendment that in the first part specifically prohibits any income tax at any level of government within the United States. No more income tax means no more withholding, which means IMMEDIATE cash in the pocket. No more IRS means means that the cost of doing business for banks would decline, so much so that I estimate there would be a 30-50% decline in interest rates within one month. Most importantly, no more IRS means no more presumption of guilt.

Create a national sales tax to be applied uniformly to all goods and services with no exemptions and no exceptions. The biggest single advantage of sales taxes is that they are mostly self-administrating, needing only a fraction of the resources of an income tax.

And the second part of our new amendment would specifically limit the TOTAL (Federal, State, and local) sales tax collected to 10% unless approved annually BY THE VOTERS.

Now the common wisdom is that a sales tax is the most regressive tax possible. I absolutely agree, but there are three things that should be considered here.

First, , most of the poor don't stay poor in the U.S.

Second, we don't want people to stay poor.

And third, the best way I know of to keep taxes low is to make sure that people get seriously angry when the tax rate rises. If someone has to vote for higher taxes on themselves, there had better be an overriding reason or they are going to get incredibly pissed off.

More and more I am convinced that an overstuffed bank account made it possible for the Federal power grab we've seen. If the FedGovs didn't have the money, we'd have a lot more freedom and cash in the pocket.

Vote "NONE OF THE ABOVE." And if you can't, ask why not?

— NeoWayland

Posted: Mon - November 3, 2008 at 01:11 PM  Tag


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