We Need a Real Flat Tax by Richard A. Epstein

I was heartened recently to see Edward Kleinbard’s op-ed in the New York Times, with its alluring title, “Don’t Soak the Rich.” But as I read the piece by Kleinbard, a law school professor at the University of Southern California, it became clear that his proposed solution was a classic bait-and-switch operation. Kleinbard’s so-called flat tax soaks the rich by a different route. He proposes a tax hike on everyone evenly and then suggests that the government spend most of the extra revenues on the poor, either by direct grants or public expenditures from which they derive the lion’s share of the benefit.

The flat tax deserves a better send-off. Historically, the tax was championed by such notables as Aristotle, Locke, and Hayek as a device to reduce the government’s role in the lives of its citizens. Even a limited government must do many things—provide national defense, preserve internal order, and supply the infrastructure on which a well-organized private sector markets run. Accomplishing these daunting tasks requires public revenues. The challenge for the defender of limited government is to find that set of taxes that minimizes the distortions of a market economy while generating revenue to accomplish government’s necessary and proper goals.

In general, a two-pronged approach offers the greatest hope. First, whenever possible, the government should impose user fees to defray the costs of public services. These include, for example, highway tolls, which ideally should cover the costs of running the system, by apportioning expenses so that those who place the greatest burden on the roads pay the greatest amount. But user taxes are not feasible for standard public goods, i.e. those indivisible benefits that must be supplied to everyone if they are supplied to anyone.

The flat tax proportionate to either income or consumption offers the most attractive option, because it allows the government to set the overall levels of revenue as high or as low as seems necessary,….

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Recent Scandals Show It’s Time To Abolish IRS By LEWIS K. UHLER AND PETER J. FERRARA

The Constitution states in Article I, Section 8: “The Congress shall have the power to lay and collect taxes … .” The 16th Amendment enacted in 1913 restated: “The Congress shall have the power to lay and collect taxes on incomes … .”

There is no mention of a presidential role in either imposing or collecting taxes.

Congress abdicated its constitutional role in tax collection in 1862, when it prescribed an income tax to be collected by a newly-created Internal Revenue Commission in the Treasury Department. Since then, there have been a series of presidential abuses of the IRS, which now has lapsed into virtually a campaign arm of “Team” Obama.

Today, IRS bureaucrats directly flout Congress and stonewall investigations of abusive, partisan political activity, with technologically impossible claims of lost emails. What would the IRS say if you filed your tax return claiming your computer crashed and you hopelessly lost all records of your income a year ago?

The only solution is to return to the Constitution, abolish the IRS under presidential control and replace it with a congressional tax collection bureau reporting to Congress. Lois Lerner and all her IRS colleagues who refuse to cooperate with Congress would then simply be fired — instead of called to testify.

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Mastering the art of B.S. By the Bear

You know how to tell when a politician is lying? His lips are moving. Fear mongering and dooms day scenarios are all part of the art.

Here is what some of B.S. experts told the public would happen during the government shutdown occurred in 2012 ( Sequestration) and remember Chris Matthews, the guy with the tingle up his leg, he called “Sequester a doomsday machine”. Needless to say that the tingle gave him permanent brain damage.

• The Congressional Budget Office predicted 750,000 jobs could be lost. So, the CBO missed the target estimate by 749,999 because ONLY ONE JOB was lost.
• When Congress agreed to cut $37.8 billion in 2011, it was called “the largest annual spending cut in our history” by President Obama, and lethal austerity by many liberal economists.

Well our crack government economist must have been smoking crack at that time because $ 37 billion dollars represents about three days of government spending.

These are but two examples of many and now let’s change subject to how to cut government waste.

Anytime the subject of “cuts” in government spending comes up the political establishment gets hysterical over the possibility of cutting the budget or even ONE JOB!

Billions of dollars have been wasted on “Green energy” and no one seems to be concerned, but cutting three days of spending out of the budget and B.S. artists go into high gear telling the public about the looming disaster this will cause.

Now I not in favor of cutting ONE JOB, I am in favor of cutting whole departments and here is the first two I would start with:

The Department of Education… School curriculums should be left up to local school boards and the parents of the children and we don’t need Washington dictating school lunches. Their budget is $ 67 billion dollars.

Internal Revenue Service (IRS) Their budget is $106 billion dollars.

I am in favor of what I call “pay as you go” … you can call it a flat tax or a consumption tax, it doesn’t matter, your tax obligation is paid for in full when you purchase something that is taxable.

And finally this factor should not be ignored.

The cost of preparing and filing all business and personal tax returns is estimated to be $100 to $150 billion each year. According to a 2005 report from the U.S. Government Accountability Office, the efficiency cost of the tax system—the output that is lost over and above the tax itself—is between $240 billion and $600 billion per year. For tax return preparation, Americans spent an amount equal to roughly 20% of the amount collected in taxes.

My final comment: The amount of money wasted here is astounding; especially when you consider that the country borrows money to finance this madness.

So why are we doing this?

Because the B.S. artists must keep control over the people no matter what the cost is.

American Companies Think The Unthinkable — Leaving The U.S.

Taxes: Walgreen, America’s venerable drug-store chain, is thinking the unthinkable: relocating to Europe. Not because it sees growth and opportunity there, but because of onerous taxes here in the U.S. It’s an ominous trend.

The Financial Times of London calls it “one of the largest tax inversions ever.” That is, a company seeking to avoid punitive taxes in one market by moving to another.

No doubt the FT is right. And after its recent $16 billion takeover of Swiss-based Alliance Boots, it would be easy for Walgreen to remake itself as a Swiss company.

If it did, the Democratic Party’s liberals would no doubt call Walgreen unpatriotic for wanting to lessen its tax burden. In fact, they are responsible for an economic environment so hostile to capital and investment that companies now find it intolerable.

As we’ve noted, corporate tax rates in the U.S. are the highest among the developed nations. The average rate in America in 2013 was 39.13%; for all of the Organization for Economic Cooperation and Development nations, it stood at 28.2%.

In short, being headquartered here is a major competitive disadvantage for American firms.

According to an analysis by UBS, Walgreen’s U.S. tax rate is 37.5% — compared with Alliance Boots’ rate in Europe of about 20%. That’s a huge gap, worth billions of dollars a year.

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Culture Challenge of the Week: Tax Tyranny By Rebecca Hagelin

Anxious and somber faces greet me as I step into the crowded waiting room. A sense of dread fills the air.

Men and women sit silently, clutching folders and envelopes, stacks of papers and piles of files. The fear in the air is so thick you can almost cut it with a knife. I join the morbid group as I slump into the nearest empty chair and wait for my turn to see….the ACCOUNTANT!

It’s tax time, and even though we go through the same depressing ritual year-after-year, it just doesn’t get any easier. If I think about it too long, I get really ticked off.

I’m angry that I am forced to hand over so many of my hard-earned dollars to a nameless, faceless bureaucracy where much of it is wasted; frustrated that someone else chooses who gets my money; and upset that I work hundreds of hours each year to pay for stuff I don’t want, don’t need and often times find disgusting.

And to make matters worse – just like all those people sitting in all those waiting rooms across the country – I can’t even figure out how to figure out how much I owe the beast!

The system is so complex that I actually have to pay someone else to calculate it for me and hope and pray that the accountant is educated enough on the intricacies of the tax code to get it right. Every time I see one of those advertisements by accounting firms claiming that they can pretty much guarantee they will find errors in some other accountant’s rendering of my tax return, I get upset all over again. And not because I think they are lying, but because I know that it is true. The tax labyrinth is too complicated for anyone to know their way through it unscathed.

And the real kicker? When April 15 rolls around, the reality is that I have not yet made enough money this year to pay for the taxes I will have to pay next year.

Read more at Patriot Post