Tags: GOP | Irrational | Belief | Tax | Reform

GOP Suffers From Irrational Belief in Tax Reform

GOP Suffers From Irrational Belief in Tax Reform
(Dollar Photo Club)

By    |   Sunday, 30 April 2017 08:42 PM

There is no possibility that the income tax could ever work in a capitalist free-market economy.

A government imposing an income tax is nothing new. Over some 4000 years of known tax history, at least since the time of the pharaohs, many civilizations have tried an income tax system, and it has always ended badly. The Founded Fathers knew this when they prohibited direct taxation in the Constitution.

It was a bad idea when foisted on the American people in 1913 and, after 114 years, it is nothing but a catastrophe for the American economy now.

There are a plethora of tax commissions, blue-ribbon committees, analysis, and reports over the years that have cataloged all the failures of the income tax and its deleterious impact on the American economy and culture.

How effective is the income tax system?

It’s fair to say that the government cannot effectively administer it, and the taxpayers are never certain they are complying.

The problem starts with the fact that it is a tax system built on a foundation of an unknown.

That is, we do not know what income is. There is no definition other than it is what it is.

That’s why the tax code is 79,000 pages long.

Categorizing all the circumstances, situations, transactions, and possible interactions as an item of income, deduction, exemption, exclusion, deferral, or credit is a massively complicated undertaking.

Adding to this is an ever-growing list of methods or structures which are subject to subjective anti-abuse or tax evasion rules. These enforced through a bewildering matrix of idiosyncratic civil and criminal provisions subject to determinations by layers of unaccountable bureaucracies and, always, political influence.

I am not asserting that the government should not tax.

But why are we taxing income which cannot be defined even with a tax code 79,000 pages long as opposed to the sale of goods or services which are easily identifiable?

Ultimately, all taxes, however imposed, are in economic effect to the taxpayer a sales tax

Trump’s tax reform proposals are a step in the right direction. That is if it is part of a transition to a true flat tax system, and then to a sales tax system.

Make no mistake; I am all for lowering the tax rates, repealing the AMT, the estate tax, and FATCA. What would also be an even greater benefit is taxpayers having the presumption of innocence instead of the presumption that they are tax evaders. And having the tax code translated into plain English.

President Trump is trying to make changes. The holdup is the GOP political establishment that believes that they have a better way.

It just proves that the GOP politicians are typical human beings making decisions which are predictably irrational.

Denis Kleinfeld is known as a strategic tax and wealth protection lawyer, widely published author and creative teacher.

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A government imposing an income tax is nothing new.
GOP, Irrational, Belief, Tax, Reform
Sunday, 30 April 2017 08:42 PM
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