If you’re still sweating over your tax forms, there is one molecule of silver inside the dark cloud hanging over your head: this year, the deadline falls on April 17th (Tuesday) instead of April 15th. It doesn’t fall on Monday the 16th because Monday is a local holiday in Washington, DC, called Emancipation Day, marking the date in 1862 when Lincoln freed the slaves. So you have two extra days. Yay!
Since I’m answering questions from readers today, this seems like the perfect time for this question:
“I know you are a supporter of the proposed FAIR Tax legislation, HR25/S18, but I was wondering why Congress won't even consider it?”
Opponents of the FAIR Tax cite various concerns about how much revenue it would raise, whether it would be “regressive,” etc. I’m sure some are sincere in their objections, but I suspect that many have an ulterior motive they don’t want to discuss. It all boils down to one simple question: Why does the government tax us?
My position, and that of other FAIR Tax supporters, is that the government should taxes citizens to raise funds to pay for the necessary functions of government. Therefore, any tax system should be as simple and efficient as possible, raising the revenue needed without harming economic growth, distorting the market place or infringing on personal freedom and privacy. It should be a system that taxes consumption instead of savings or productivity (why do we punish activity we want more of?), and that allows taxpayers to fill out a postcard-sized tax return instead of having to keep every receipt, justify every expense, and waste time and money filing out mind-numbing forms or paying professionals to do it for them.
How much time and money does the current system waste? According to the Tax Foundation, complying with the 70,000+ pages of rules in our tax code each year costs individuals and businesses a combined 8.9 billion work hours (Imagine one 40-hour-a-week worker putting in 4,278,846 years of pointless effort) at a cost of $409 billion annually. Imagine how many jobs could be created or prices lowered without that added cost. So why doesn’t Congress jump at the chance to do it? I believe it’s for the same reason they’ll never voluntarily vote term limits on themselves: nobody wants to give up their own power, and the tax code is one of Washington’s most potent centers of influence to wield or peddle.
Forbes reports that in 1955, the IRS tax code was about 409,000 words long. Today, it’s close to 8 million and growing, in addition to 60,000 pages of tax-related case law. All those words were not added to help boost economic growth. For that, you remove words from the tax code. They were added because the government figured out that the tax code could be used as a system of punishments and rewards to shepherd the public into behavior of which those in power approve. It can also be used to reward politically-connected companies and punish their competitors. If you think of the tax code not as a giant pile of words but as a mountain of carrots-and-sticks that give politicians and regulators the power to bribe or whack Americans into doing what they want, then you can see why it’s virtually impossible to get rid of it.
I fear the only solution will be if Americans finally start doing what the Founders intended: only electing people who don’t see politics as a lifelong career that makes them rich and powerful, but as a public service they perform for a brief time before coming home to live under the laws they made. Sadly, as long as voters fail to hold their leaders to account, and refuse to view government as a way to protect a level playing field and taxes as a way to raise necessary revenues, but view both as vehicles to redistribute other people’s money, that’s not likely to happen.
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