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Taxation Today: Not About Revenue, it is about CONTROL.

Posted by mrfixit on November 10, 2010

Taxation is not about revenue.  Sure that is how it begins, but it quickly has evolved into a much more alluring use.  Taxation today is about control, it is about POWER.

Earlier post on income taxation:

https://minorityrightsadvocate.wordpress.com/2010/10/18/the-road-to-serfdom-is-paved-with-income-taxation/

Just out today, in a supposed effort to get a hold of out of control deficit spending, the proposals to help set thing straight, well they ALL miss the mark.  Spending is a problem, and something must be done, but they assume that tax breaks, if ended, will produce that amount of revenue.  It never happens.

If they end the mortgage deduction, fewer people will by and re-finance homes, and revenue expected will never happen, just for example.

The massive tax code is one giant mess of flawed societal engineering.  It has been used to give breaks to encourage certain behaviors, and taxes to discourage others.  The real root of the problem is the notion of income taxation in the first place.  Taxes discourage activity, so taxing income in fact discourages work, and income generation.  Ironically, it is quite nice for the born wealthy, who can exist on investments and tax free government municipal bonds and such.  Yes, this is how the average Joe ends up with a higher tax rate than the billionaire!

You see, as long as we tax income this will be the case.  The problem is the flaw of thinking income should be taxed in the first place, I contend the founders would have completely rejected any attempt to tax income.  It brings with it the potential for massive abuse, total control and intrusion into all aspects of each individual’s life, you have no privacy, no protection from an all powerful government when they can compel you to reveal detailed aspects about your entire financial situation!

You see, this is a dream for the control freak elites, but it is a nightmare for all who seek and want liberty.

We need to abolish income taxation entirely, and get revenue to fund essential services based ONLY on trade and consumption. 

As it is with the fuel taxes that fund the roads you drive upon, consumption based taxation perfectly adjusts to ensure those who reap or use the most in society also pay the most and in contrast those that conserve the best are taxed the least.  Consumption taxation is fair, and it is elective.  All likely have some consumption, but those who choose maximum independence and also demand least, well they are left alone.  Those who demand most, use most, must fairly pay, and do so with consumption taxation.  This system does not demand you pour out the details of your life; the taxation is like it is now for fuel, at the point of sale, the fuel pump in case of the fuel tax.  It is also a tax that the payers are always aware of and will know exactly what they are paying.  Income withholding permits many to live in ignorance of the real out of control costs of their various forms of government.

If the environmental progressive really cared about the consumption of resources, then why would they not support consumption only based system of taxation?  Sure they would support energy taxes and taxes in general, but only in ADDITION to the “progressive” income tax.  To the progressive, control and power over others is the center priority that overrides all others! 

It is not really about what is fair, just or even what is effective.  It is not even about actual revenue either, since rates are so high, most will find ways to dodge them anyway (Google). 

http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html

It is about control, it is about power.  Ironically, revenues normally INCREASE with rates lower that those we have today, this because there is less incentive to find ways to avoid the taxes, people pay them, and the ACTIVITY that was suppressed by the taxation is freed allowing economic GROWTH.

Curve shows taxes can go beyond point of increasing revenue:

http://www.heritage.org/Research/Reports/2004/06/The-Laffer-Curve-Past-Present-and-Future

Obama says it is not about revenue, it is about “fairness”:

http://www.youtube.com/watch?v=WpSDBu35K-8

Russia has a Flat tax, and works to lower capital gains taxes?!

http://biggovernment.com/dmitchell/2010/06/20/russia-getting-rid-of-capital-gains-tax/

And the lower Flat tax rate brings in MORE revenue:

http://economistsview.typepad.com/economistsview/2009/06/russian-flat-tax-myth-and-fact.html

Enough data to make your eyes bleed that supports my point:

http://www.heritage.org/Research/Reports/2002/05/Correct-Way-to-Measure-the-Revenue-Impact-of-Changes-in-Tax-Rates

The reason there has been no political will to abolish the income tax in favor of a consumption based fair tax is it would require distributing power back to the citizens.  If there is one thing our elite political class craves and holds dear more than any other, it is POWER.  The notion of giving it back, are you kidding me!?  That it is the correct move to make, but, not since about 1776 did that really take front and center stage in the American body politic!

Here are the recent moves to change taxation, to supposedly raise revenue and reduce debt:

http://www.bloomberg.com/news/2010-11-10/deficit-reduction-panel-s-plan-would-seek-to-cut-social-security-medicare.html

End of the mortgage deduction!   How is hope and change working out? :

http://www.msnbc.msn.com/id/40111714

Oh, and let’s raise the retirement age, cut defense, you name it:

http://online.wsj.com/article/SB10001424052748703805004575606643067587042.html?mod=WSJ_hp_LEFTTopStories

Here are some ideas:

–          Eliminate the IRS, a consumption tax would require minimal staff to collect.  The IRS is one big drain on the budget, one of the largest in fact.

Supporting data:

IRS performance:

http://www.cato.org/pubs/pas/pa222.html

Cost to collect tax is sometimes more that the collection:

http://www.washingtonpost.com/wp-dyn/content/article/2008/04/14/AR2008041402808.html

–          Let people retire on their OWN schedule!  Get the government out of the business (in time).  Let people have their income and invest in their OWN accounts and retire when they choose!  What has Social Security run by politicians really brought us?   Can you say Ponzi Scheme!

Supporting data:

Texas Gov calls it as he sees it, the world’s largest ponzi scheme!  Perhaps he is correct?

http://www.mysanantonio.com/entertainment/books/perry_touts_new_book_in_san_antonio_107002198.html

Note this 2007 pie chart, here you see the hard data, it is the social welfare spending that is killing the USA, defense comes in at only 16.19%!  I’d hate to see the Obama numbers!

http://en.wikipedia.org/wiki/File:Fy2007spendingbycategory.png

Social security is in the RED ink:

http://www.washingtontimes.com/news/2010/aug/5/social-security-red-first-time-ever/

Unfunded liabilities exceed our assets:

http://www.americanthinker.com/2009/09/is_the_us_government_bankrupt.html

–          Without income tax, there is no need for or against mortgage interest deductions!  If we wanted to incentivize home ownership, we could give sales tax breaks or holidays on construction materials, or real estate and property taxes!  No need for interest deductions, which by the way are incentivizing you to what?  To make you dependent and not really anowner of your property!

Supporting data:

Home ownership on the DECLINE, lowest in over a decade:

http://money.cnn.com/2010/07/27/real_estate/home_owners/index.htm

Government Dependence is a threat to Liberty (this from 2001!):

http://www.heritage.org/Research/Lecture/The-Coming-Crisis-How-Government-Dependency

MORE:

Admission, taxation because some did not “earn it” according to disgusting Barney Frank:

http://www.theblaze.com/stories/barney-frank-double-dip-estate-tax-not-punishment-because-heirs-didnt-do-anything-to-deserve-it/

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4 Responses to “Taxation Today: Not About Revenue, it is about CONTROL.”

  1. Dave D. said

    How can a consumption and trade tax fund national defence? I am more supportive of a flat tax on gross income which would also eliminate the need for the IRS and it’s tomes of paperwork and regulations.

    • mrfixit said

      Well it worked from 1776 to 1917, so it can be done. The notion it is not possible is based on our frame of reference. The majority of the budget today is not defense, not even close at maybe 16%. The entitlements and social welfare programs consume most of the budget. If that money was in circulation in the population it likely would mitigate any “need” for the programs in the first place. Most have no idea of the massive overhead in cost to employ a person, so much is taken off the top in withholding. It is done, not to generate revenue, it is done to exercise control.

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