The final act of the Democrat majority on the House Ways and Means Committee was to make public several years of Donald Trump’s tax returns, which the Committee obtained after a prolonged legal battle. The tax returns confirmed that, despite being one of the richest people in America, Donald Trump paid very little in federal income tax. In fact, in at least one year he paid under a thousand dollars.
Trump’s success in minimizing his tax liability without ever being audited is surprising only to those who think IRS audits are mainly used to catch rich “tax cheats.” According to data released by the Syracuse University Transactional Records Clearinghouse, in 2022 lower-income taxpayers were five and half times more likely than millionaires and billionaires to be audited! This is because low-income taxpayers cannot afford to hire top-notch tax attorneys and accountants to help fight the IRS, so they are more likely to give in to the agency’s demands.
Despite claims of the Biden Administration and its Congressional allies, the $80 million in additional funds provided to the agency as a part of the misnamed “Inflation Reduction Act” will likely increase the tax agency’s targeting of low- and middle-income Americans.
Proponents of a flat tax or national sales tax argue that such a system would ensure millionaires and billionaires paid their “fair share” of taxes. Saying we must all pay our “fair share” of taxes assumes we have a moral obligation to the government that can only be fulfilled by turning over as much of our income as our so-called “public servants” demand. This is not the case. Individuals have a moral duty to support their families, and to support private charities if they wish. They do not have a moral duty to support the government.
Tax reform proponents also complain that the current tax code contains too many loopholes that cause economic distortions and inefficiencies. It is true that the current tax system promotes inefficiency, but this is caused by the income tax itself, not the loopholes. Conversely, loopholes actually promote economic efficiency by giving taxpayers the ability to spend more of their money the way they prefer, rather than allowing politicians to spend it. As economist Thomas DiLorenzo put it, “private individuals always spend their own money more efficiently than government bureaucrats do.”
Some have expressed concerns that the use of President Trump’s tax records as part of the Democrat and Deep State effort to discredit him sets a dangerous precedent that will lead to increased use of tax information as a political weapon. The sad fact is that ever since its creation, politicians have used the IRS as a tool for punishing political opponents. As an IRS agent told the head of conservative organization who was being audited after calling for the impeachment of then-President Bill Clinton, “What do you expect when you target the President?”
The major problem with the income tax, and the reason it must be eliminated, not merely “reformed,” is that it is rooted in the idea that the government has first claim on our income. This idea is incompatible with a free society. Furthermore, the income tax must also be repealed because the force of the IRS, along with the fraud of the Federal Reserve, is one of the two foundations of the welfare-warfare state that erodes our liberty and prosperity. The only way to avoid 1984 is to repeal 1913.
I would counter that some governments more consistently translate taxes into clean water, efficient infrastructure, quality education and competent health care. Obviously, ours does not. Why does it work better for some countries than others?
Ours also hosts more billionaires, which is an odd accompaniment to being saddled with a tax-hungry bureaucracy. However, these billionaires seem less interested in making up for the failings of the bureaucracy in improving infrastructure, etc. This would seem to weaken the argument that, left to their own devices, the wealthy are a net benefit to society.
Why is it so difficult for the US to find a middle ground between capitalism and socialism? The most predatory of either side always seem to prefer taking to giving. Is it a cultural failing?
This is the way it has been. This is the way it is. And this is the way it will be. Until we change it!
Here is a Canadian story. In another life long ago, I was co-inhabiting with a divorced woman with children. Because of my employment situation, I always used an accountant for income tax filings. One year, one of my/his deductions was disallowed, and I was “billed” about $300. The accountant was, shall we say, less than pleased about the ruling, and decided to make a point. He refiled both tax returns using the “long form” which allowed me to claim one of her kids as a spousal deduction, and other expenses more advantageous to me than my co-inhabitant. The result was she paid about $200 more, but I got over $1000 back. It pays to have an accountant do your taxes.
I’m a big Ron Paul fan, but it’s more for his consistent anti-war stance than his totally free market, anti-government positions on the economy. We can all agree that the government bureaucracy, especially the federal, is seriously bloated, and must be downsized (good luck with that). But is eliminating taxing authorities and making taxes voluntary the answer? There must be a middle ground.
The fact that taxes aren’t working for the benefit of the CITIZENS who live here indicates severe dysfunction. It is a sign of increasing societal decay – accelerated by the incompetent Brandon regime and a Neocon run Congress, which pumps multi-billions of our tax dollars into war with Russia. The answer I propose is the break-up of the country into much more manageable units, which would put an end to this ravenous empire which seems hell-bent on starting a nuclear war. We can’t ever get true tax reform as long as we’re stuck in the mire of this Evil Empire.
The US tax code and all the associated bits and pieces exist because special interest groups and wealthy individuals paid for those loopholes via political campaign contributions.
The tax code will not be fixed or simplified until money is removed from politics. To do this would require that campaigns be shortened to less than 2 months, individual contributions be limited to less than $500 and special interest/PAC’s/company contributions be prohibited.
The probability of this ever happening is close to ZERO due to all the powerful stakeholders and special interests that benefit from complex tax rules.
Can you just imagine all the tax law firms, accountants, special interests, media that has tuned politics into a horse race and of course, the politicians say, “Sure, go ahead and put us out of business”. [lol]
Disallow the government from going into debt without a declaration of war.
The new tax laws coupled with the hiring of 87,000 new armed “auditors” is just another ploy to terrorize the middle class into obedience. Desperate regimes use desperate means to keep themselves in power.
Big lesson of Trump IRS examination is that tax code is too complex for IRS to enforce. IRS salaries aren’t high enough to pay for employees smart enough to combat the sophisticated accountants and tax attorneys dreaming up the loopholes and scams used by the wealthy. Clearly, most of the 87,000 new employees will examine and collect from poor and middle class. I retired from IRS after 33 1/2 years and know that the money is in the middle class. Examinations of wealthy individuals were usually unproductive, and the only large adjustments were timing adjustments which reversed themselves in future tax years. I agree that I mostly admire Ron Paul for his foreign policy views. Most people aren’t competent enough to handle themselves in his libertarian dream world. Most of us simple folk need help with health care and our finances. Because of money in politics and lobbyists, I do not see us ever having a simple, rational tax code.
Sir, it’s $80 billion. E.g., https://tax.thomsonreuters.com/blog/understanding-the-inflation-reduction-act-of-2022-irs-funding/
With all the verbiage about paying one’s fair share, no one ever defines what one’s fair share is. As its usually directed against the wealthy, it would seem to mean “more.” The implication is you’re a greedy pig if you figure out a way to keep your money out of the government coffers. Given the spending habits of Congress, what fool — rich, middle class, or poor — would want to bestow more money on the government?
To fund the legitimate interests of government, a national sales tax would be the easiest and simplest solution. Also the “fairest” — the rich have more money, so they spend more money, so they pay more in sales taxes. That’s how it works in many states and it would work for the feds. Unfortunately, it would not allow for IRS snooping and harassment of taxpayers for political retribution. So it will never happen.
Fundamentally, why is it the government’s business how much money you have, how much money you make in a given year, or how you made it? Funny how your “right to privacy” is not an issue when it comes to taxation.
Right on! This is why I appreciate the former Congressman “Dr. No”, the only Congressman I know of who could have gotten through terms in Washington, FS with a clear conscience. What other US Gov’t official would have every uttered this truth going back a century?!
I’m glad Ron Paul has you and Mr. Sollipsist on his side as far at the American Warfare State goes. It’s great that you two read his stuff. Sorry guys, but there is no middle ground. You either want freedom or you don’t. It sounds like you two don’t. As for:
… This answer has been in place for over 230 years now. It’s called Federalism. Those “units” are what we call States. Per the original US Constitution, unmodified by the Civil Rites/Constitution 2.0 and before being let to be trashed by those wanting that “middle ground”, specified your solution pretty damned well, I gotta say. I’m not trying to sound like an asshole here, but have you read that document?
I have, and Ron Paul has. It does not specify an American Empire. In fact, it precludes it per the articles on Declaration of War and Amendment X.
PS: Amendment XVII took a lot of power aware from the States too, enabling the Warfare State among other things.
Mr. Hammond, I agree that this would be better in a lot of ways than the Income Tax. However, practically speaking (not your point, perhaps):
1) The sales tax would be sold to Americans as a way to greatly lower income tax not replace it. Amendment XVI* would NEVER get repealed. Then, the income tax would creep right back up, and we’d get our money stolen in even more ways.
2) The better solution, one based on the concept of Federalism, is that the various States would put in whatever money the Feral Gov’t “required” based on population, raising it in any way they each see fit.
Note the sources of revenue for the Feral Gov’t, as seen on a graph in the 2nd Part of the Peak Stupidity series:
* See Part 2 and Part 3 of the series on the abominable 16th.
What’s despicable is how they recklessly spend billions or trillions on things that have no benefit to society or it’s core infrastructure. I would not call aircraft carriers, bombers, nuclear missiles bla bla bla beneficial to humanity, if anything, they’re a detriment to the future of civilization.
Their attitude is “who cares about the art of diplomacy when you can threaten nation states with annihilation should they refuse to accept your terms of endearment.”
I can only imagine what a few trillion dollars wasted on Iraq and Afghanistan wars would have done to America’s crumbling cities, with many becoming ‘No Go Zones’, filled with black criminals and unwanted filth from every third world Schitt hole known and unknown.
I say defund the government and let it’s Alphabets crumble to to ground.
Instead of a “Reset”, let’s have a new beginning.
Semi-autonomous States under Federalism are not individual countries. Under the Constitution, the States gave up responsibility for their own defense to the Federal government. I propose several different more homogenous Countries, with their own militaries, not beholden to Washington for their defense. The Constitution was unable to prevent The United States from turning into an Empire.
It may very well go that way, starting with Texas’ efforts to control its own border against the invasion. I’m all for any of that.
A century or two into it, the American people quit defending it. That’s the way I’d put it. Lincoln did the first permanent damage, though, creating a precedent that there was no opting out.
And we can have a republic of ron paul which has a pitifully small government that has no association with the economy. I would pledge to move there if it wasn’t where I reside currently.
With that attitude & resume you’ll never get the invitation to join the republic of ron paul. It’s a voluntary place so you’d have to give up your authoritarian ways & find productive employment. No gov teet in these here parts.
#310, I’m curious what you think of my latest experience with the IRS, in which they cashed my checks that had been stapled to the returns (2 different years), but claimed they never got my returns. Haha, I had copies, but I wasn’t about to make it that easy. Instead, I sent a letter chiding them to look around better for my stuff. “They’ll turn up.”
That’s an anecdote written up in the Peak Stupidity post Me and the IRS. (Yes, of course I embedded the Johnny Paycheck song.
Curmudgeon, I liked your story. I used to be good acquaintances with a very Conservative guy that did this for a living – he hated the IRS as much as anyone. I don’t know if he’s still doing this, but here’s my problem with accountants doing my taxes, turbo-tax (Glenn Reynolds pushes the hell out of it), etc. From the Peak Stupidity post I linked to just above:
I do it on paper and mail it on April 15th, to get it into the middle of the pile. I round to the nearest 10 bucks or 100 bucks these days (inflation, you know), and used to do them at the bar during Superbowl halftime, often fittingly spilling cheap Milwaukee swill on the forms.
I will not spend more than 2 hours on the Fed and State forms together. If I don’t know it, I’ll let the computers correct me. Bad attitude? You betcha!
You should have filed and paid electronically. Congress cut IRS funding, reducing staff at the Service Centers to process paper returns.
I don’t think anything in life is as easy as “you want freedom or you don’t.” Freedom is on my short list, but so is peace and prosperity. And history is against any form of government hosting (providing? permitting?) any of those things more than briefly. I’m sure anarchy would work just fine if a majority of the people were reasonable and shared similar goals, but has that ever been the case?
I have indeed read The Constitution, and I’m a big fan. I appreciate the far-sightedness of the authors’ design, and I lament the weakening and abandonment of it. But I also know that it took about 500 years for the Magna Carta (another wonderful document) to become insufficient except as a precursor. And it’s undeniable that the world has changed more, and more quickly, in the past 235 years. And after all, The Constitution in its strictest form established ‘more’ government than the Magna Carta did — and even that was too much for many people.
See here (my comment above).
#253, I’m not worried about the processing. I don’t care if they NEVER get around to it! They may not, too, because the GOP did something useful and nixed that 87,000 IRS agent hiring as part of the “Inflation Reduction Act”.
(Don’t know how it could be only $80 million for 87,000 agents, per this Ron Paul column. He must be off by 2 orders of magnitude on the money.)
Nice intro to Jimmy Dore, and Ron Paul & Rand Paul & Cynthia Mckinney, & Dennis Kucinich, & Jesse Ventura, & a few others.
It will also be a niggra jobs program.
Well, even with the high income tax, high inflation, and very high cost of energy, the Mestizo family across my street is having a massive backyard party right now. The backyard stereo system is using a very high amount of electricity as it sends intense sound waves into my house and into my ears. There are around 150 people in their backyard, all highly intoxicated with ethanol, THC, and nicotine, and they are dancing to African rap acoustics. The outdoor cooking grills are on, cooking all sorts of meats for the guests. This is extreme hedonism, gluttony and decadence. What this means is that Americans still have too much money. The cost of living is going to have to rise much more before Americans are forced to give up their hedonism, gluttony, and decadence, and instead attempt to live in a civilized manner, as Westerners did in the century preceding the Enlightenment.
I will agree with Ron Paul about income taxes and the cost of living being too high only when all the entities in the West representing hedonism, gluttony, and decadence go out of business. I want to see Star Bucks, all fast foods, all pizza places, all restaurants, all dance and comedy clubs, all alcohol bars and pubs, all coffee shops, Hollywood, NetFlix, all Hollywood movies/shows distribution companies such as HBO, all strip clubs, all magazines, all brand clothing, SUVs and recreational vehicles, Disney World and all other theme parks, all sea/ocean cruise companies, all vacation spots, all junk food companies, all golf courses, and all pop-music production and distribution companies go out of business. Once the above mentioned entities go out of business because Americans no longer have enough money to pay for them, I will then agree with Ron Paul.
Matt LeBlanc to Heather Graham in the Lost in Space film.
‘If there is no time for fun, what are we saving the planet for?
Thank you Ron Paul. At this point we may have to repeal the Income Tax, the Fed, and the IRS. I wish there was a way to reorganize the three entities and issues. The Flat Tax is unconstitutional, being neither a direct or indirect tax. The repeal of the Income Tax is the rich man’s battle, not the average citizen’s, that is not until the Democratic Party’s IRS began it’s flank offensive against the US Constitution, that oppresses the American people and Main St. economy.
It’s the IRS that operates and acts ‘under the color of law’, war actually, against the Constitution and the American people, under the pretext of taxation. The Congress is somehow dependent on the money derived by this abuse of the citizenry, the poor and the powerless, and the law. Yet Congress will not retrieve $Trillions of dollars, lost, unaccounted for, or Stolen. Congress will not Audit the Fed. The 1% in their multi-faceted warfare offensive against us all, obviously believe this is the way it should be.
The Income Tax is an excise tax; where and how the expansion of the Income Tax’ scope and the jurisdiction of both the Congress and the IRS, with compliance of the Bar began, I don’t know. The US Fiat Money system, WWI and WWII definitely created the necessary premise. Perpetual War would not be possible without the Federal Reserve Bank system. The ‘New Left’, in the recent decades, under one pretext or another,(population control), has commenced the War on Prosperity to cause the eradication of the American middle class as indicated by the human garbage heap, by the mountains of the homeless throughout America.
The US Constitution describes Congress’ power to tax, within the parameters of direct and indirect taxes. There are only two classes of taxes, the Income Tax is not a third class. I reference Brushaber vs. Union Pacific and Chief Justice Charles White’s decision.
The Federal Income tax is NOT necessary to fund the federal Government. We must stop flailing away at the branches of Ashkhenazim power and strike resolutely at the root, which also entails consigning the IRS to oblivion! The current model of banking and currency is based on the Bank of England model, founded in 1694. Benjamin Franklin stated that the main reason for the American Revolutionary War was the insistence by George III that the American colonies accept Bank of England banknotes, which were issued as promissory notes, rather than use the increasingly successful American fiat script, issued by the colonies in the CORRECT quantity and not bearing debt! We must be prepared for a new monetary system, an honest one, when our present debt-based banking cartel collapses. Kindly read and critique this proposed Constitutional Amendment. But first, a little background…
From “The Truth in Money Book” by Theodore R. Thorsen and Richard F Warner:
QUOTE Someone had to borrow at usury to bring that money [checkbook balances, bills and coins] into existence. The money goes out of existence as the usury and the debt principal are paid back to the bank. These amounts are huge: several billion dollars go out of existence each day. [Actually this money goes into the reserve accounts of the Federal Reserve Banks, out of the hands of the public! This book was first printed in November 1980. The amounts which are withdrawn presently are much larger.] If the money is not replaced with new loans, a shortage occurs. Soon individuals and businesses experience serious cash flow problems. These result in more and more loan applications to banks—the only place where money is being created to replenish the supply” UNQUOTE
Here is one possible solution—-To Hell with Fractional-Reserve Debt-Based Banking Constitutional Amendment
(1) Rescind the Federal Reserve Act of 1913 and rename existing Federal Reserve notes and check book balances, in all U.S. banking and credit-creating institutions as well as foreign holdings of dollars, on a 1-to-1 basis, as U.S. Treasury Dollars and U.S.Treasury-Denominated bank balances. All currently existing financial contracts of the Federal Reserve Banking System, including United States Treasury Bills, Notes, Bonds, and Inflation-Protected Securities, remain in effect.
(2) Henceforward, ex nihilo credit creation by banking and financial institutions in the United States is prohibited. Loans are required to originate from previous savings of U.S. Treasury Dollars and U.S. Treasury-Denominated bank balances, which for each loan are held in and paid from specific sequestered loan accounts by the various financial institutions, with interest charges and term limits for each loan to be determined solely by the contracting parties. Non-cash reserves held in the regional Federal Reserve Banks in accounts of the member institutions of the Federal Reserve System no longer form the basis for credit creation and are extinguished via accounting erasure. Any further payments of principal and interest on currently-existing promissory notes owned by any bank are required to be distributed to holders of savings accounts and checking accounts in that bank in a manner to be determined by each bank, such procedures to be transparent to savings or checking account holders at that bank in terms of amount and frequency of payment. Regional Federal Reserve Banks continue to provide check-clearing operations for the member banks.
(3) Monetary transactions of the regional Federal Reserve banks or of its member banks with international banks, including the Bank of International Settlements and the International Monetary Fund, can not include ex nihilo credit creation.
(4) The U.S. Treasury supplies Treasury Dollars as needed to any member bank of the Federal Reserve system to satisfy demands for cash by deposit and savings account holders in excess of cash reserves held by banks at the time of enactment of this amendment.
(5) Fund the U.S. government and its agencies and projects directly via Treasury Dollars authorized by the Congress in its yearly federal budget. The borrowing of money from the Federal Reserve system of banks or from other institutions or individuals to pay for federal government expenditures is prohibited. All outstanding Treasury Securities are henceforward redeemed on demand via payment with U.S. Treasury Dollars.
(6) Abolish the Federal Income Tax on individuals, corporations, and business enterprises while maintaining a social security tax on individual incomes. Social security retirement revenues are strictly sequestered in Federal Government Retirement Accounts held by the U.S. Treasury and managed by the Social Security Administration. The Sixteenth Amendment to the U.S. Constitution is hereby rescinded and the Internal Revenue Service disbanded.
(7) Institute a federal sales tax with a varying yearly tax rate adjusted by the U.S. Congress in session, the sole aim of such adjustments being to maintain a stable or decreasing Consumer Price Index based on data collected by the Federal Government. Any such federal sales taxes taken in by the Federal Government are extinguished from the currency supply to keep the Consumer Price Index stable or decreasing and are not utilized for further funding.
(8) Article 1, Section 8, Clause 1 of the U.S. Constitution is amended to read as follows: The Congress shall have Power to collect customs duties on imports and exports, uniformly applied throughout the United States, and to provide for the Defence and general Welfare of the United States.
(9) Article 1, Section 8, Clause 2 of the U. S. Constitution is rescinded.
(10) The adoption of this amendment does not prohibit the use by the citizens of the United States of any alternative currencies they should choose to use in their private or commercial transactions, provided both parties to the transaction agree to the medium of exchange.
I could stand the Income Tax a lot better if the government waste was eliminated.
All the pork in the budget needs to be wiped away.