US Tax System Needs Overhaul

I am not sure who gets the credit as the candidate for tax reform, perhaps it goes back to the institution of the Internal Revenue Service itself and the first person to complain... Did you know that the Income Tax was not included in the original Constitution but added through Amendment in 1913? There was a short flirtation with an income tax during the Civil War (appropriate, don't you think, as the Federal government started replacing the State and local governance), the office of the Commissioner of the Revenue was created in 1862 as a means of paying for the costs of the war. This office lasted about 10 years, I assume until the financial and social crisis was seen to have passed. It was resurrected in the 1890's but deemed unconstitutional within a year by the Supreme Court.

Only in 1913 did the Income Tax "stick," creating the Bureau of Internal Revenue through the 16th Amendment to the Constitution. One assumes that this was another tool of the Federal government to use against those involved in unlawful enterprises as many of the "gangsters" of the day were jailed not due to their activities, but due to their failure to pay appropriate income taxes, as well as providing general income funds. The rates were generally low other than in years of wartime or distress, and the Bureau gradually evolved into the IRS that we know today that is tasked with providing the funds necessary to run our burgeoning bureaucracy. 

We have managed to allow the IRS to become the most feared government agency in existence, I think we would all rather the FBI was chasing us around than the IRS. We allowed government spending to increase to such a level that taxes are necessary to keep it afloat, but this agency was never a part of the plan of the Founders plan, it is a relatively modern invention, an agency tasked to do whatever it takes to raise funds and with the "teeth" to back it up.

I support those who want to do away with the IRS and the confusing tax codes, so confusing in fact that the CPA's and general accountants and clerks across America don't know much more than we do when it comes down to it, they rely on complex software packages to keep up with the rules. I personally prefer no tax at all other than to provide for the common defense and essential services that no one area can provide for itself, but even then the source of that revenue should be changed to something that makes more sense. 

The buzzword today is the "Fair Tax" or the "Consumption Tax," which has been passed around in elite circles for quite some time. Basically, if you buy a good or service, you would add a percentage to that purchase which would go to the Federal government, much like the Sales Tax that most States use. No muss, no fuss, simple and to the point, you keep all the money you earn to spend as you like with no one checking up on you once a year. I believe this is a much more favorable means of appropriately and fairly raising the funds needed to run the necessary programs, although the actual amount and the programs that would be funded is another subject entirely.

Think of our tax system in this very simplified analogy:

10 friends enjoy each other's company and like going to the movies together on Friday nights (had to pick a reasonable place and use nice, round numbers to simplify this for myself...). Their total cost for the night at the movies is $100. Using recent IRS rates to illustrate:

The first 4 (the poorest of the group) would pay nothing, the fifth pays $1, the sixth $3, the seventh $7, the eight $12, the ninth $18 and the tenth (the richest of the group) $59.

And they were OK with this arrangement, enjoyed their movie and just assumed the disparity in cost was fair. Now let's assume for a moment that the movie theater needed to create income for the snack bar, so they offered a 20% rebate on the cost of movie tickets. The total cost for the Friday night out would now be $80. They all still expected the first 4 to get their tickets for free, but had to decide how the $20 in savings would be distributed among the rest. $20 divided by the remaining 6 people would be $3.33 in savings each, but they quickly realized that they would end up paying the 5th and 6th moviegoer to see the movie which did not seem fair, so they decided to reduce each person's ticket by an amount relative to their current price, so:

The fifth now paid nothing like the first four, the sixth paid $2, the seventh $5, the eighth $9, the ninth $14 and the tenth $49. Pretty obvious that they were all better off than before, but pretty soon someone got out a calculator and figured out that although the sixth person saved 33%, that amount was only a dollar, and although the tenth person only saved 16% that amounted to a whopping $10 in savings.

This situation started a firestorm.

The fifth person was also upset that they only saved a dollar and the tenth person saved $10, the seventh joined in to exclaim how the wealthy get all the breaks! The first four people were up in arms at how this system did not give them anything back and was used to exploit the poor! Pretty soon the whole group was bickering over their own situation, which eventually turned into railing on the tenth person until that person quietly decided to move (the Cayman Islands I guess...) to avoid the whole mess.

The next Friday night at the movies the tenth person did not show up, and the other nine were shocked to find that even with the cost reduction, they did not have enough money between them to cover even half the tickets. Now what to do? 

We are presently right at the point of deciding what to do, how to get the same services (movie tickets) tomorrow that we are enjoying today, before the whole system blows up and we can't even afford half of what we have. Please consider the Fair Tax and its cousins as a viable alternative that is fair for everyone, simple to understand and necessary for the future growth of our nation. Compliments to David Kamerschen, Professor of Economics at UGA for the original premise of the tax illustration.

Student's Pledge of Allegiance

I found something that I thought I should share, I wish I could claim it for my own, but it was written by someone smarter than I, a 15 year old student from Arizona...I don't think I need to add a thing.

Now I sit me down in school,

where praying is against the rule.

For this great nation under God,

Finds mention of Him very odd.

If Scripture now the class recites,

it violates the Bill of Rights,

and any time my head I bow,

becomes a federal matter now.

Our hair can be purple, orange or green,

that's no offense, its a freedom scene.

The law is specific, the law precise,

prayers spoken aloud are a serious vice.

For praying in a public hall,

might offend someone with no faith at all.

In silence alone we meditate,

God's name prohibited by the State.

We're allowed to dress and cuss like freaks,

and pierce our noses, tongues and cheeks.

They've outlawed guns, but first the Bible,

To quote the good book makes me liable.

We can elect a pregnant senior Queen,

and the unwed "Daddy" our senior King.

Its inappropriate to teach right from wrong,

we're taught such judgments do not belong.

We can get our condoms and birth control,

study witchcraft, vampires and totem poles.

But the Ten Commandments are not allowed,

no word of God must reach this crowd.

Its scary here I must confess,

when chaos reigns, the school's a mess.

So, Lord, this silent plea I make

should I be shot, my soul please take.

The Divided States of America

Never since the Civil War (or the War Between the States if you prefer) has America been divided into such a clean division of social and political ideals. That is a bold statement, but if you really stop and think about it you will find it appropriate. We are 2 nations within common borders, without geographical identity so each side is hard to pinpoint, unable to move forward because of the stalemate that exists in our divisions.

The Presidential race has magnified this divide for me, and while people size up the candidates to see which one fits their value system most closely, the results of that decision will identify a much larger issue. Gone is the day when the US was united in the face of social and political issues, and even threats to our freedom. In the past 60-70 years we have experienced change at a dramatic rate, from our social system that found the need to support our economic systems through programs due to the Great Depression but allowed those programs to continue and grow even after the need had passed, from the institution of an income tax and removal of the US financial system from the gold standard which ultimately will prove to be an issue that erodes our prosperity back to the last century, and from the social upheavals of the 1960's that resulted mostly from the abuse of power in our government and loss of leadership on moral issues. If you are looking for a change in government, you need look no further than our own recent history that is threatening to divide the very institutions of our nation. The real candidate of change will be the one that returns us to the original democratic ideal that brought us to America in the first place. I am not sure that candidate is available to us yet, because the radical change that will be required can only happen when we all realize where we are going (see blog topic-How Long will Democracy Last).

I recently heard someone on talk radio announce that he is voting for the Democratic candidate because "the Democrats give us what we want, and the Republicans just take it away." Seems to me this is a common theme, and while the Republicans certainly have done their part to deserve the stigma of government mismanagement as much as anyone else, I think the idea that was voiced on that radio show is more dangerous yet. It signals a choice of the American people, a demographic shift that we are in the midst of right now, where people feel more comfort and security in allowing the government to take care of their basic needs than they do in determing those needs for themselves. We are slowly becoming the same form of centralized government that our ancestors would do anything to escape, including a 2 month sea passage in horrid conditions away from the place you were born and raised, just to escape government that held control over your property, religion and personal freedom. Think about it, we are voting now to give that control right back to the government that our ancestors abhorred!

I would pre-suppose that the worst areas of the country that are in the midst of the housing turmoil, where in some cases nearly 50% of the homes sold are sold out of bankruptcy, are mostly those areas that will vote Democratic in the next election. I'd like to see an overlay map illustrating that feature. The last election between President Bush and Al Gore illuminated the fact that in simplistic terms the inner cities voted for Gore and the vast areas of the US with lighter density voted for Bush. What is that telling us? It is telling me that the people that expect government to provide for them are mostly centralized in higher density areas, dependent on the public dole in the midst of higher crime and substance abuse issues. Those issues that this demographic faces are not issues that government can repair, only community and the courage to rise to a higher level of personal integrity can provide relief, not more government intervention and support programs. The fact that we are nearing a 50/50 split between those that want the government to provide for them in a relatively small overall area of the US, and those that want government to be diminshed in favor of personal liberty is cause for alarm, but I think we are going to quietly continue to move in that direction until we become a socialist nation before anyone figures it out.

There is evidence on both sides of the aisle that we are moving in that direction, even the Republican leadership is eroding our personal rights by allowing spying and wire tapping in the name of national defense. The fact is, if we choose to remain a self sustaining democracy, then we are going to be open to attacks that we simply cannot defend. In fact, if we are truly a free and open society, we should look on the attacks of others that hate that freedom as an occasion for celebration. We cannot be open to personal freedoms of thought, movement and ownership and closed to attacks from the outside, or we will inevitably lose those freedoms. We have a lot of very good people dealing with national defense issues every day, and I am thankful for them, but as Americans we should have a higher standard than the rest of the world when it comes to personal freedom in all areas of our society. We know who the bad guys are, get the court order to tap their phones and whomever is in contact with them and take care of it, but the rest of the American public should not be subjected to a blanket proclamation. The same is true of the sanctity of life issue, by turning over our rights to the government and its courts we can't be sure that one day national health care means they get to decide who lives and who is too expensive to keep, just as by turning over our private conversations means some degree of added security today may mean you are labled an enemy of the state tomorrow.

John Adams and Thomas Jefferson on their worst day would never trade personal freedom for government intervention, yet some would use their names in defense of government supporting people in need instead of their neighbors supporting that need. The premise that our young Democrats hold today, the same ideals that John Kennedy tried to establish where people take personal initiative in making our country better is not the same ideal that the Democratic leadership exhibits. I admire those that hold on to that ideal on the democratic side, but if they will just take a moment to look at the big picture they will see this is not the case today, they have been duped into something else. We have allowed our welfare system to overcome the position of the church and community in taking care of our own, we have allowed our government to exercise more and more control over our personal lives since the end of the Civil War, and now we have become so used to that control that we are willing to vote it away in the name of national health care.

I am still unsure where my vote will go in November, but regardless of those that even go so far as to say don't vote unless your candidate fulfills all of the "requirements" for your side, I plan to vote for someone. I encourage you to vote as well, and I hope that your vote will go toward uniting a country divided by policies we have allowed to separate us. Our democracy will not last if we allow our government to become what our ancestors risked everything to leave, please take a step back and consider the big picture, before its too late...