How to Neuter the IRS

Taking down the IRS is not complicated.

The recent IRS targeting of groups opposing the Obama administration has clearly demonstrated that the government is out of control and run by people who are downright loopy. This is a direct assault on everybody's freedom. But it's important to realize that such things are possible only when government has monopoly control over a nation's money. Government monopoly over the issuance of money concentrates power to the government. Also, the government must be smaller and less powerful against its own citizens when others have the ability to compete with government currency.

The Solution

The ultimate solution to the IRS problem is simple; repeal all legal tender laws. However, in the absence of that there is another very effective and very simple solution. We charge a national sales tax (or a value-added tax) and give rebates to the poor. At the same time, we completely eliminate all income taxes.

Now there is a difference between a national sales tax and a value-added tax. A VAT is charged at each stage of production and sales while a sales tax is only charged on the end sale.But in the context of this proposal, either one would do. So in this discussion, we're going to use them nearly interchangably.

Step1: A National Sales Tax

Now a national sales tax or a value added tax, is not a new or original idea. One of the main problems with such taxes is that when it is implemented, politicians tend to give exemptions or discounts on certain types of purchases. For instance, Australia has a VAT that exempts money spent on child care. Canada exempts groceries from their VAT.

Exemptions and discounts distort the market and places unfair burdens on people in other industries. It also invites special interests to lobby the government for exemptions or  discounts for their particular industry. The only way to avoid that kind of corruption is to actually call it corruption and make no exceptions. A 100% fair tax is the only thing that will work beyond the next election.

Step 2: Tax Rebates for the Poor

A primary objection to a VAT is that it hits the poor harder because a larger percentage of their income goes to pay taxes than the rich. It's precisely for that reason that we have a graduated income tax structure with higher-income people paying a larger percentage of their income.

Well, that problem is easy to solve. We simply give tax rebates to the poor. The poor, if they think they qualify, can file in income tax return to apply for a rebate. If their income is below a certain level, they can receive back some of the money that they pay on their taxes. This scale can be graduated just like income tax. In other words, people close to the poverty level can receive larger rebates than people who make more but still qualify.

The Result

Switching to a VAT + rebates rather than a federal income tax has some distinct advantages.

  1. The tax code becomes both simple and fair. Everyone pays their fair share. There are no exceptions, discounts, or exemptions.
  2. The IRS becomes a money-giving agency rather than an money-taking agency. Ok, ok...that's not strictly true. Someone has to collect the VAT tax. But the reality is that most of the business of the IRS would be giving refunds rather than taking money.
  3. The IRS gets waaaaay smaller. It doesn't need as many auditors, staff members, enforcement agents, guns, bullets, etc., etc. This is a huge savings to the taxpaying public. We have a chance here to drastically reduce the size of the federal government. That's always a good thing.
  4. The poor are not overburdened. Lower-income people have a chance to get rebates. So they are not unfairly hit by taxes.
  5. Only the poor file returns. Because the rebates are determined by the size of a person's income, the poor must file an income tax return to get their rebates, just like they do now. They go through the same process they now use. And it's highly likely that those who prepare the tax returns will not charge the poor up front for the service. As it stands, many tax return preparers will take their fee out of a persons refund. That will undoubtedly continue. So the poor won't have to pay a fee up front. In other words, they won't be hampered by having to pony up money in order to get their tax refunds. And the average person doesn't need to file at all.
  6. The average person has no business with the IRS. Under this system, the average person would have no business with the IRS and the IRS would have no enforcement power over the average person. This would effectively neuter the IRS. That right there is the best reason of all to move forward with this proposal. A small IRS with limited enforcement powers over citizens is a vast improvement over what we have now.

By targeting groups for political reasons, the IRS has clearly declared itself to be the enemy of the people and the enemy of democracy. If it can't be eliminated completely, it must be neutered and neutered now.'

Making this proposal will probably get us audited, but oh well. It's time for us to stand up for freedom.

© Cognisaya 2013-2018

                Home |  Products | Services | Blog | Articles | Videos | Links | About | Contact