Tags: IRS | tax | president | system

Replace the Income Tax Not the IRS

By    |   Tuesday, 02 June 2015 11:19 AM

There seems to be an overabundance of politicians and pundits who think that abolishing the IRS will solve this country's income tax system problems.

While the IRS is unquestionably feared and hated by the individuals and companies who actually pay taxes, they are nothing more than a cog in the tax system machinery.

Abolishing the IRS would do nothing to alleviate the pain of the tax system, which by its inherent nature is doomed to failure while causing an inordinate amount of grief and destruction to America along the way.

Whatever evil is done by our tax authorities is a consequence of an evil system, not the cause of it.

Congress has already found that the current federal tax system is "fundamentally defective, economically counterproductive and its complexity leads to staggering costs to the taxpayers."

These costs are increasing exponentially to shocking levels, with the losses now being inflicted because there is no assured way that the computer systems containing all the intimate details of every taxpayer can be secure.

It is quite remarkable to see tax protestors, scholarly think tank policymakers and a growing number of members of Congress collectively recognizing the failure of the federal income tax law.

Why hasn't the federal income tax law been repealed and replaced already?

The answer is quite simple.

Congress and the president find that the federal income system is an easy way to raise campaign contributions, reward their particular constituent special interest voting groups, engage in social engineering and put into operation all manner of wild schemes purportedly to boost the economy.

What no Congress or president seems to be interested in is having a tax system that efficiently raises money to pay for the legitimate activities of the government.

It is clear to me that at this point there are few in Congress, in any president's administration or on the Supreme Court who are willing to limit government spending to just its legitimate needs.

Recently, Congress and the president have lambasted U.S. companies when they try and deal with a tax system that is the "most burdensome and uncompetitive in the world."

American companies are not wrong when they sell out to foreign competitors or engage in so-called inversion transactions by becoming a subsidiary of a foreign corporation.

All the shareholders, the investors who put their capital at risk by investing in these companies as well as all of the company's employees depend on these companies maintaining positive cash flow. Tax is not only a cost but also likely the greatest drain of cash. Cash, not profit, is the lifeblood of a company.

The government will always need a tax authority to administer its tax system regardless of whatever form it takes.

There are, in fact, two victims of the federal income tax system. Those being both the taxpayers and the IRS.

What would the correct system look like?

It would have three characteristics. First, the IRS could efficiently administer the collection of tax. Second, it would be easy for taxpayers to comply. And third, it would impact taxpayers equally.

It is time to replace the current federal income tax system — not abolish the IRS.

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There seems to be an overabundance of politicians and pundits who think that abolishing the IRS will solve this country's income tax system problems.
IRS, tax, president, system
Tuesday, 02 June 2015 11:19 AM
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