If I Made the Rules - Part 3: Taxes

The argument about taxes is nearly always about "fair share".  Mostly Democrats insisting that the rich are getting a free pass, and not paying their "fair share".

I don't hear enough of the question, "fair share of what?".

My proposal is that arguing about fair share is putting the cart before the horse.  The first discussion needs to be about the proper role of government, including Federal, State, and Local.  Hate to break it to you folks, but the Constitution already settled that question; the problem is, the Federal government hasn't applied the constitution to tax policy since before Franklin Delano Roosevelt was president.

So let's start there.  It might require a number of years to get there, but it's way past time to begin rolling back all of those unconstitutional agencies now operating in Washington, DC.  Department of Education, Department of Health and Human Services, Department of Agriculture, Environmental Protection Agency, Corporation for Public Broadcasting, Endowment for the Arts, Department of Energy, and so on.  Just phase them out over time.

To the extent the people decide they need and want a government-run organization to serve some purpose, let them petition their State Legislature.  Agriculture, for example, can be much better managed at the state level, which would allow each state's organization to fit its programs with the needs of their own farmers.  Education has always been and should return to a locally administered program.  The federal government simply is the wrong place for most of these agencies to build their massive, one-size-fits-all bureaucracies.

Then I'd go with a simple flat tax.  Once our Federal Government is returned to only those activities allowed it by the constitution, figure out the annual budget and divide by the annual GDP to get the tax rate.  OK, if we must, we can extend an exemption from income tax at a floor of, say, $20K.  But I would prefer to throw away the graduated tax rates that are designed to soak the rich.

You know, I'd even be willing to compromise on the progressive tax system as long as the Left reciprocates by agreeing to transition the federal government back to only its constitutionally authorized activities.  But the top rate can't ever exceed 1/3 of any individual's earnings.

I've looked at the "Fair Tax", which is a tempting alternative.  It's basically a national sales tax.  But I can't figure out how they enforce it without turning the government into an uber-intrusive tax collector prying into all of our private transactions.  So I'm more of a flat tax guy.

The current tax code is the first bit of evidence presented on behalf of the prosecution that the federal government is hopelessly corrupt.  The tax code is thousands of pages containing tax exemptions and credits and deductions targeted at specific individuals and corporations in return for their continued financial backing of the congressperson who anonymously wrote the exception into the unwieldy code.  If we achieve nothing else, slicing all of that graft out of the tax code would be a tremendous accomplishment.

Wouldn't it be terrific if every one of us filed our annual tax return on a postcard?  Here's how much I made this year, and here's how much tax I paid in.  Here's my calculated 15 or 20 percent (whatever the rate ends up to be), and I am sending a check for the difference.  Or the government owes me a refund of my overpayment.  Done. 

Perhaps the most important part of my proposed solution needs to be mentioned here.  If necessary, use a Constitutional Amendment that says something like this:

No tax assessment, credit, reduction, or any other type of adjustment can be applied to any individual or organization without it being applied or available to all individuals or organizations.  The effect of this constitutional requirement would be that congress would be specifically precluded from giving tax breaks to their friends and supporters.  Likewise it would stop legislators from levying punishing taxes on individuals or industries (i.e. Oil Companies) they don't like. 

I could see this leveling the playing field in all aspects of tax preferences that occur around the country.  State and local governments would no longer be allowed to bribe companies to locate into their area with tax abatements.  Professional sports teams will no longer be able to extort money and expensive stadium projects from their host cities with the threat they may move the team to a more generous city.

The fundamental policy is simply this:  Everybody pays the same rate, everybody is subject to the same laws, and nobody can get preferential treatment nor be punished for belonging to an industry that's out of favor with the party in power.