We are supposed to believe that this time the Republicans are serious about tax reform.
Senator Orrin Hatch, R-Utah, who was reforming tax law when dinosaurs still roamed the earth, has been quoted as saying, "This is not theater, nor is it just for show."
Hatch dutifully and, in typical congressional fashion, promptly created five bipartisan working groups on taxes to help put together a major tax bill to be voted on later this year.
Hatch says that "my only goal when it comes to tax reform is to make new law."
First Investor Takeaway: There will be no new law, but there will be even more of the same.
To give Hatch some credit, the Republicans on the Senate Finance Committee have issued a 340-page report titled "Comprehensive Tax Reform for 2015 and Beyond."
It really is an excellent piece of work by the Republican staff, which I most sincerely doubt that any Republicans in the Senate have read.
The introduction by Hatch tells us that the status quo is unacceptable and all that sort of stuff, and is coupled with a plea for bipartisan efforts that he knows "to some, may sound like a fairy tale."
If anyone believes that this Congress is going to work together to enact a new tax law this year, then they must be one of those who invests their money in fairy tales.
Second Investor Takeaway: The only tax reform that will work is a consumption tax system. Buried in the report is the observation that "an income tax system, by its very nature, discourages savings and investment." To achieve the goal of enhancing savings and investment, a system of tax based on consumption works, while any system based on taxing income will not.
Remarkably, the rest of the GOP report completely ignores this and resorts back to proposing more of the same old tax reforms of prior years that created the monstrous tax law we have now.
Third Investor Takeaway: Flawed memories of President Reagan guides today's Republican tax reform effort. While the Republicans are all giddy when extolling the virtues of the 1986 Tax Reform Act, this is all wishful nostalgia. The fact is that among other consequences of the 1986 Tax Act, it wiped out the savings and loan industry and crushed the real estate industry. Does anyone remember the Resolution Trust Authority? Besides that, something like half our personal liberties got taken away with ever more power given to the IRS. It didn't take more than another year or two after that before Congress re-reformed any of the reform of the 1986 Tax Reform Act out of existence.
Let us admire Reagan and honor his accomplishments, but for God's sake leave his tax reform policies resting in their place in tax history.
Fourth Investor Takeaway: When it comes to fairness, equality is the only true measure. "On the other hand, fairness may require that the benefits received by the government be equal, or roughly equal, with the taxes the taxpayer pays," the report states. The report notes the observation of John Stuart Mill (a classical liberal) made some 160 years ago that taxing income discourages savings and investing.
Clearly, without saving and investing there is no capital. Without capital there is no capitalism.
The political far left and the Obama administration want to raise income taxes because it is the most effective way to destroy capitalism.
The existing income tax system is destroying our free-market capitalist country and its enforcement is destroying our personal liberties.
The Founding Fathers of our country knew that an income tax system must be prohibited if the country was to successfully survive. After more than 100 years of our defying their wisdom, it is abundantly clear that if we are to continue as a free people we must repeal the income tax system.
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