It occurred to me that this is a good time to discuss our current tax system. After all, during this time most of us share in the common struggle to find, collate and review our tax documentation for the prior year with the aim of minimizing our liability to dear old Uncle Sam. The income tax is usually the largest annual tax liability we face. While I think the majority of taxpayers in this country believe that some sensible level of taxation is necessary to fund government at all levels, I also think that those of us that carry the heaviest burden want the portion of our earnings that we keep to be larger than it currently is.
After all Tax Freedom Day arrived on April 9, the 99th day of the year in 2010. Americans worked well over three months of the year—from January 1 to April 9—before they had earned enough money to pay that year's tax obligations at the federal, state and local levels. That was one day later than in 2009. The forecast for 2011 is to be later than 2010… no surprise there.
I also believe that the current Tax Code as administered and enforced by the IRS is one of the root causes of many of our society’s problems. It has been, and is being used, not only to pay for the basic cost of government services but also to transfer wealth from one segment of the population to another, pad union employment roles, for corrupt payoffs to political constituencies and to experiment with social engineering.
A Brief History of Taxation
Taxes are not a new idea. The concept is literally thousands of years old and dates back to the world’s earliest written human history.
For example, Egyptian Pharaohs levied taxes on their subjects. One of the most commonly taxed items was cooking oil. This commodity was taxed throughout Egyptian history due to shortages. Tax collectors, known as Scribes, would audit households using physical visits to insure that citizens were not avoiding the cooking oil tax by using leavings generated by other cooking processes as a substitute for the taxed oil.
In the Roman Empire during the time of Julius Caesar a 1 percent sales tax was imposed. During the time of Caesar Augustus the sales tax was 4 percent for slaves and 1 percent for everything else.
In Great Britain after Rome fell, the Saxon kings imposed taxes on land and property. These Kings also imposed substantial customs duties on imported goods.
But the income tax is a relatively new. Under some early taxing schemes an income tax was imposed on the wealthy, office holders, and the clergy. A tax on movable property was imposed on merchants. The poor usually paid little or no taxes. Some believe the income tax was invented by the Italians in 1427. It was mandatory for all heads of household in Florence to officially state their income, list their properties and provide a count of those living with them.
A precursor to the modern income tax we know today was invented by the British in 1800 to finance their engagement in the war with Napoleon.
America had few taxes in its early history. From 1791 to 1802, the United States government was supported by internal taxes on distilled spirits, carriages, refined sugar, tobacco, snuff, etc.The high cost of the War of 1812 brought about the nation's first sales taxes on gold, silverware, jewelry, and watches.
In 1862, during the Civil War effort, Congress enacted the nation's first income tax law. It was a forerunner of our modern income tax in that it was based on the principles of graduated, or progressive, taxation and of withholding income at the source. The Act of 1862 established the office of Commissioner of Internal Revenue. The Commissioner was given the power to assess, levy, and collect taxes, and the right to enforce the tax laws through seizure of property and income and through prosecution.
In 1868, Congress again focused its taxation efforts on tobacco and distilled spirits and eliminated the income tax in 1872. It had a short-lived revival in 1894 and 1895. In the latter year, the U.S. Supreme Court decided that the income tax was unconstitutional because it was not apportioned among the states in conformity with the Constitution.
In 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. The amendment gave Congress legal authority to tax income and resulted in a revenue law that taxed incomes of both individuals and corporations.
As an interesting side note, the 2nd Plank of Marx’s Communist Manifesto published in 1848 is “A heavy progressive or graduated income tax”.
Our Options Today – The Fair Tax
Tax reform is in the news today. Proposals for reform include simplifying the current system, a Flat Tax and the Fair Tax. For my money the Fair Tax is the best option.
In the January 22nd edition of the Gwinnett Daily Post, my newly elected Congressman from the Georgia 7th District wrote an Op-ed Entitled “Let’s Move Forward of Tax reform”.
http://www.gwinnettdailypost.com/opinion/headlines/WOODALL_Lets_move_forward_on_tax_reform_114424009.html
Here is an excerpt of this piece: “Under our current tax system, the tax compliance costs relative to the amount of tax paid are reason enough for rejecting it. The Internal Revenue Service estimates that Americans spend 6.6 billion hours per year filling out tax forms — including 1.6 billion hours on the 1040 form alone. Back in 2002, Americans spent an estimated $194 billion on tax compliance, which amounts to 20 cents of compliance cost for every dollar collected by the tax system.
According to research done by the Tax Foundation, the projected total income tax compliance costs in 2011 will be $391.9 billion, which is more than 20 percent of the total federal revenue. Americans bear an enormous cost to comply with the 67,000 pages of complex tax code. The IRS portion of the U.S. Tax Code — known as Title 26 — alone contains more than 3,600 pages of rules and regulations.”
The point is, in addition to the other negative issues listed in the opening paragraphs, this system is completely inefficient and oppressive. The only reason for maintaining it is because vested special interests have such large stakes in the current system that reforming it will be politically challenging. But I believe we must reform it to stop the slide into economic slavery we are experiencing now. And the environment in our capital and our country has never been more hospitable to this kind of positive change in recent memory.
Here are at least eight reasons to change to a Fair Tax:
After all Tax Freedom Day arrived on April 9, the 99th day of the year in 2010. Americans worked well over three months of the year—from January 1 to April 9—before they had earned enough money to pay that year's tax obligations at the federal, state and local levels. That was one day later than in 2009. The forecast for 2011 is to be later than 2010… no surprise there.
I also believe that the current Tax Code as administered and enforced by the IRS is one of the root causes of many of our society’s problems. It has been, and is being used, not only to pay for the basic cost of government services but also to transfer wealth from one segment of the population to another, pad union employment roles, for corrupt payoffs to political constituencies and to experiment with social engineering.
A Brief History of Taxation
Taxes are not a new idea. The concept is literally thousands of years old and dates back to the world’s earliest written human history.
For example, Egyptian Pharaohs levied taxes on their subjects. One of the most commonly taxed items was cooking oil. This commodity was taxed throughout Egyptian history due to shortages. Tax collectors, known as Scribes, would audit households using physical visits to insure that citizens were not avoiding the cooking oil tax by using leavings generated by other cooking processes as a substitute for the taxed oil.
In the Roman Empire during the time of Julius Caesar a 1 percent sales tax was imposed. During the time of Caesar Augustus the sales tax was 4 percent for slaves and 1 percent for everything else.
In Great Britain after Rome fell, the Saxon kings imposed taxes on land and property. These Kings also imposed substantial customs duties on imported goods.
But the income tax is a relatively new. Under some early taxing schemes an income tax was imposed on the wealthy, office holders, and the clergy. A tax on movable property was imposed on merchants. The poor usually paid little or no taxes. Some believe the income tax was invented by the Italians in 1427. It was mandatory for all heads of household in Florence to officially state their income, list their properties and provide a count of those living with them.
A precursor to the modern income tax we know today was invented by the British in 1800 to finance their engagement in the war with Napoleon.
America had few taxes in its early history. From 1791 to 1802, the United States government was supported by internal taxes on distilled spirits, carriages, refined sugar, tobacco, snuff, etc.The high cost of the War of 1812 brought about the nation's first sales taxes on gold, silverware, jewelry, and watches.
In 1862, during the Civil War effort, Congress enacted the nation's first income tax law. It was a forerunner of our modern income tax in that it was based on the principles of graduated, or progressive, taxation and of withholding income at the source. The Act of 1862 established the office of Commissioner of Internal Revenue. The Commissioner was given the power to assess, levy, and collect taxes, and the right to enforce the tax laws through seizure of property and income and through prosecution.
In 1868, Congress again focused its taxation efforts on tobacco and distilled spirits and eliminated the income tax in 1872. It had a short-lived revival in 1894 and 1895. In the latter year, the U.S. Supreme Court decided that the income tax was unconstitutional because it was not apportioned among the states in conformity with the Constitution.
In 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. The amendment gave Congress legal authority to tax income and resulted in a revenue law that taxed incomes of both individuals and corporations.
As an interesting side note, the 2nd Plank of Marx’s Communist Manifesto published in 1848 is “A heavy progressive or graduated income tax”.
Our Options Today – The Fair Tax
Tax reform is in the news today. Proposals for reform include simplifying the current system, a Flat Tax and the Fair Tax. For my money the Fair Tax is the best option.
In the January 22nd edition of the Gwinnett Daily Post, my newly elected Congressman from the Georgia 7th District wrote an Op-ed Entitled “Let’s Move Forward of Tax reform”.
http://www.gwinnettdailypost.com/opinion/headlines/WOODALL_Lets_move_forward_on_tax_reform_114424009.html
Here is an excerpt of this piece: “Under our current tax system, the tax compliance costs relative to the amount of tax paid are reason enough for rejecting it. The Internal Revenue Service estimates that Americans spend 6.6 billion hours per year filling out tax forms — including 1.6 billion hours on the 1040 form alone. Back in 2002, Americans spent an estimated $194 billion on tax compliance, which amounts to 20 cents of compliance cost for every dollar collected by the tax system.
According to research done by the Tax Foundation, the projected total income tax compliance costs in 2011 will be $391.9 billion, which is more than 20 percent of the total federal revenue. Americans bear an enormous cost to comply with the 67,000 pages of complex tax code. The IRS portion of the U.S. Tax Code — known as Title 26 — alone contains more than 3,600 pages of rules and regulations.”
The point is, in addition to the other negative issues listed in the opening paragraphs, this system is completely inefficient and oppressive. The only reason for maintaining it is because vested special interests have such large stakes in the current system that reforming it will be politically challenging. But I believe we must reform it to stop the slide into economic slavery we are experiencing now. And the environment in our capital and our country has never been more hospitable to this kind of positive change in recent memory.
Here are at least eight reasons to change to a Fair Tax:
1) The Fair Tax is economically pro-growth.
2) The Fair Tax would simplify the tax code, reducing onerous compliance costs.
3) The Fair Tax will increase job opportunities and thus lower unemployment.
4) The Fair Tax will shrink the federal workforce by eliminating the IRS (who knows really how many employees they have? Estimates range from 100,000 to over 500,00 during peak season).
5) Illegal Aliens will have to pay taxes under the Fair Tax.
6) The Fair Tax gives the individual the ultimate control over what they pay in federal taxes.
7) The Fair Tax is not regressive. With a built in “pre-bate” system it will treat the lower income population fairly.
8) The Fair Tax will end the power of special interests to game the system.
Here is a link to the Fair Tax website:
http://www.fairtax.org/site/PageServer?pagename=about_main
Please check out the Fair Tax website. Educate yourself about this important legislation. Get involved. Talk to your family, co-workers and neighbors and educate them. Write your Congressmen and Senators and ask them to support the Fair Tax. There is a convenient link on the web site to help you do this easily. When the Fair Tax is passed and implemented and the Income Tax repealed you will get to keep more of your paycheck. Just think of the power that will devolve to the people of this country and away from Washington D.C. This fact if for no other reason should motivate you to push for this plan. The time for action is NOW!
