…that folks who thought we should abolish the IRS and simplify the tax code were wacko.
Now they make a lot of sense to me, particularly Ted Cruz:
Now that Republicans control Congress, Cruz said the party must seize on the opportunity to simplify the tax code and make it fairer.
“The last two years have fundamentally changed the dynamics of this debate [on the tax code],” he said. “As we have seen the weaponization of the IRS, as we have seen the Obama administration using the IRS in a partisan manner to punish its political enemies.”
The problem is always: what is “fair”? Flat tax?:
“We ought to abolish the IRS and instead move to a simple flat tax, where the average American can fill out our taxes on a postcard,” he said last week on Fox News. “Put down how much you earned, put down a deduction for charitable contributions, for home mortgage and how much you owe. It ought to be just a simple one-page postcard, and take the agents, the bureaucracy out of Washington and limit the power of government.”
Frazier said Cruz views the FairTax as “ideal” but embraces the flat tax as the more “realistic” option politically.
Cruz’s crusade echoes those of other politicians.
Billionaire businessman Steve Forbes built his 2000 presidential bid around a flat tax. Rick Perry advocated a flat tax when he ran for president last year. Dick Armey, the former House majority leader from suburban Dallas, has long pushed a flat tax, as does FreedomWorks, the tea party group he founded.
I don’t think any of these proposals would actually eliminate the IRS, however; the honor system for reporting and collecting wouldn’t work. But it would certainly make the IRS into a token shadow of its former bullying and behemoth self.
Among the 300+ drafts I have for posts unwritten-as-yet but nevertheless researched is a lengthy one on the battles involved in the original passage of the progressive income tax. It was fascinating to see that all the arguments that people have today on the subject were already present back then.
Here’s one tiny example, from a 1906 speech by Teddy Roosevelt (at the time he was proposing a progressive inheritance tax):
It is important to this people to grapple with the problems connected with the amassing of enormous fortunes, and the use of those fortunes, both corporate and individual, in business. We should discriminate in the sharpest way between fortunes well-won and fortunes ill-won; between those gained as an incident to performing great services to the community as a whole, and those gained in evil fashion by keeping just within the limits of mere law-honesty.
Of course no amount of charity in spending such fortunes in any way compensates for misconduct in making them. As a matter of personal conviction, and without pretending to discuss the details or formulate the system, I feel that we shall ultimately have to consider the adoption of some such scheme as that of a progressive tax on all fortunes, beyond a certain amount either given in life or devised or bequeathed upon death to any individual ”” a tax so framed as to put it out of the power of the owner of one of these enormous fortunes to hand on more than a certain amount to any one individual; the tax, of course, to be imposed by the National and not the State Government.
Such taxation should, of course, be aimed merely at the inheritance or transmission in their entirety of those fortunes swollen beyond all healthy limits.
In 1907 he added a progressive income tax, and justified it with some rather fancy tap-dancing:
A heavy progressive tax upon a very large fortune is in no way such a tax upon thrift or industry as a like would be on a small fortune. No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood. We have not the slightest sympathy with that socialistic idea which would try to put laziness, thriftlessness and inefficiency on a par with industry, thrift and efficiency; which would strive to break up not merely private property, but what is far more important, the home, the chief prop upon which our whole civilization stands. Such a theory, if ever adopted, would mean the ruin of the entire country–a ruin which would bear heaviest upon the weakest, upon those least able to shift for themselves. But proposals for legislation such as this herein advocated are directly opposed to this class of socialistic theories. Our aim is to recognize what Lincoln pointed out: The fact that there are some respects in which men are obviously not equal; but also to insist that there should be an equality of self-respect and of mutual respect, an equality of rights before the law, and at least an approximate equality in the conditions under which each man obtains the chance to show the stuff that is in him when compared to his fellows.
It is instructive to remember that the federal income tax needed a constitutional amendment to be passed. There was a reason such a tax had been prohibited by the Founders; they had figured out some problems with them:
Direct taxes were viewed by the Founding Fathers as a dangerous tax because they give government great power over its citizens and also because, in order to assess such taxes, agents must have the authority to snoop into the private details of the daily lives of the citizens. They agreed, therefore, that direct taxes are safer if administered by the states, where elected representatives are closer to the people and easier to control. Indirect taxes, on the other hand, were viewed as less dangerous, because people could avoid them, if they wanted, merely by not purchasing the items being taxed. This assumes the establishment of taxes only on those items that are considered nonessential, such as liquor and tobacco, often called luxury taxes. Furthermore, the process of collecting indirect taxes does not endanger the individual’s right of privacy. For these reasons, the delegates agreed that indirect taxes are more appropriate for the federal government.
The Sixteenth Amendment was adopted in 1913, overriding such concerns (go to the link to read more about the history of how it came to be passed):
The Sixteenth Amendment (Amendment XVI) to the United States Constitution allows the Congress to levy an income tax without apportioning it among the states or basing it on the United States Census. This amendment exempted income taxes from the constitutional requirements regarding direct taxes, after income taxes on rents, dividends, and interest were ruled to be direct taxes in the court case of Pollock v. Farmers’ Loan & Trust Co. (1895).
And here we are today.