****The following guest post is by Jim Knapton. To learn more about his new book, Changing Our World: Solutions for a Future, please visit his website.****
Now that we have finally found ourselves in a national debate over the debt, deficits, and the dollar, one side refuses to increase taxes while the other is unwilling to give in to changes in entitlements. In the end they may agreed to do a bit of both, which doesn’t matter since there is no money left in the kitty anyway, just millions of IOUs. So the issue will remain unsolved since the elephant in the room is not penury but corruption. And the lie will remain. There is no moral decency because Washington is paid for.
Nothing illustrates this better than the indefensible way we pretend to raise revenues. While the national debt and yearly deficits grow out of control, taxes raised this year as a percentage of the domestic product were the lowest on record. In other words, as a nation we are not only failing to cover our costs, our national debt is growing at an ever increasing rate. Just as Mark Twain eloquently put it, “How easy it is to make people believe in a lie, and how hard it is to undo that work again.” No question Washington has been lying to us for years, for how is it our controllers have suddenly realized things are growing beyond their control?
Of all the issues that are conveniently swept under the national carpet, it is that of raising the revenues that vexes the most. It isn’t that we are not discussing where the government’s revenues are to go—it seems Congress has little else on its mind—but it is more that we view as sacrosanct rules of taxation, fiddling with them on the whims of whatever special interest group holds sway at any time. But the self-evident unfairness of the taxation system holds that the major burden is carried by those whose power is the least influential in changing the laws. The richer you are or the cleverer your tax attorney, the less percentage-share of the tax debt you are liable to pay. And the patent absurdity of the tax code is that all of us accept taxation now as an annual game, individually seeking out as many feasible but often shady means of avoiding the burden as we possibly can.
This is not wrong but it is damned silly. The trouble is that we are so imbued with this nonsense and so accustomed to its ritual that we tend to ignore its inequity, assuming it to be an irresistible force, like death, that we are powerless to alter. But are we? Indeed, isn’t it essential to fix this issue for the common good for no other reason than that our apparent decline is centered largely on our inability to raise the wealth necessary to drive national prosperity, and that if we don’t answer this one, we might as well forget the rest?
Up for debate must be the proposal of a flat-percentage tax rate on income. Irrespective of who or what you are, whether a public or private corporation, institution or individual, profit or non-profit organization, charity or church, irrespective of marital status or profligacy of parenthood, all income would be taxed at a given and equal percentage rate. No exceptions, no deductions, no incentives, no shelters, no loopholes, no special interests, tax lawyers, CPAs, arguments, or excuses—just a flat-tax rate on all income.
And it’s easy to set the tax rate. Once we know, for any given year, predicted government spending (say, $1 trillion in 2012) it’s easy to calculate the percentage individual fixed tax rate necessary to cover that outlay. Say, for example, for next year this is calculated to be 15 percent of your annual income. Just imagine how easy it will be to fill out your individual income tax return. After name, address, and social security number, there will be just two lines, Total Income and Tax to Pay, based on 15 percent of that income. Of course we will try to hide as much income as we can. But that will be difficult since payment transactions will be accountable via electronic issuing and billing, and cash will be limited to small bills.
Is the astonishing simplicity of this idea the reason it is so dubiously greeted, or is it because the rich don’t like it? I don’t know. But once it sinks in against the howls of protestation of all the parasites profiting from today’s prehensile taxing systems, it is so sound—like the irrepressible beauty of the truth of a mathematical proof—that its appeal is irresistible. For not only is it manifestly fair in that all of us share equally in the tax burden, but it is also the middle-class rebellion that the majority of us disproportionate-tax-paying middle class are seeking. In addition, it perpetuates the concept of “graduated taxation” in that the more you earn, the greater the dollar tax amount you have to pay even though you pay at the same percentage rate as someone far less well-off. There is a one-time downside, however. The cut in staff of the Department of Revenue will be huge.
Another aspect of this flat-tax proposal is to use it to begin paying off the national debt. For example, by setting an additional flat-percentage rate (say, 1 percent) on all income, this residual would be earmarked annually for paying down the $14 trillion inherited from our present debt-ridden system. True, this would be an added taxpayer burden, but the national debt cannot be ignored. Since we don’t think twice about putting families in the street via foreclosure on their homes, the least we can do as a nation is to be fiscally responsible for our children’s future. The sooner we start paying down the national debt, the sooner it will disappear.
As time goes by—quite some time of course—the flat-percentage rate can be altered to one commensurate with a rate sufficient only to cover annual government outlay. Budget deficits would then be outlawed and changes in the flat taxation rate made necessary only after periods of, say, a congressional house term, and then only with the approval of two-thirds of the Senate. The result: a lawfully guaranteed fiscal responsibility that previous governments, Democratic or Republican, have seen fit to ignore as if they had the right to pass the buck to each new generation.
Wouldn’t this be a crowning achievement of a civilized society?
------------------------------------------------------------
To know more about Jim Knapton’s new book, Changing Our World: Solutions for a Future, visit his website at http://www.ottolinepublishing.com/. You can send him mail at info@ottolinepublishing.com.
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Paying The Piper
Now that we have finally found ourselves in a national debate over the debt, deficits, and the dollar, one side refuses to increase taxes while the other is unwilling to give in to changes in entitlements. In the end they may agreed to do a bit of both, which doesn’t matter since there is no money left in the kitty anyway, just millions of IOUs. So the issue will remain unsolved since the elephant in the room is not penury but corruption. And the lie will remain. There is no moral decency because Washington is paid for.
Nothing illustrates this better than the indefensible way we pretend to raise revenues. While the national debt and yearly deficits grow out of control, taxes raised this year as a percentage of the domestic product were the lowest on record. In other words, as a nation we are not only failing to cover our costs, our national debt is growing at an ever increasing rate. Just as Mark Twain eloquently put it, “How easy it is to make people believe in a lie, and how hard it is to undo that work again.” No question Washington has been lying to us for years, for how is it our controllers have suddenly realized things are growing beyond their control?
Of all the issues that are conveniently swept under the national carpet, it is that of raising the revenues that vexes the most. It isn’t that we are not discussing where the government’s revenues are to go—it seems Congress has little else on its mind—but it is more that we view as sacrosanct rules of taxation, fiddling with them on the whims of whatever special interest group holds sway at any time. But the self-evident unfairness of the taxation system holds that the major burden is carried by those whose power is the least influential in changing the laws. The richer you are or the cleverer your tax attorney, the less percentage-share of the tax debt you are liable to pay. And the patent absurdity of the tax code is that all of us accept taxation now as an annual game, individually seeking out as many feasible but often shady means of avoiding the burden as we possibly can.
This is not wrong but it is damned silly. The trouble is that we are so imbued with this nonsense and so accustomed to its ritual that we tend to ignore its inequity, assuming it to be an irresistible force, like death, that we are powerless to alter. But are we? Indeed, isn’t it essential to fix this issue for the common good for no other reason than that our apparent decline is centered largely on our inability to raise the wealth necessary to drive national prosperity, and that if we don’t answer this one, we might as well forget the rest?
Up for debate must be the proposal of a flat-percentage tax rate on income. Irrespective of who or what you are, whether a public or private corporation, institution or individual, profit or non-profit organization, charity or church, irrespective of marital status or profligacy of parenthood, all income would be taxed at a given and equal percentage rate. No exceptions, no deductions, no incentives, no shelters, no loopholes, no special interests, tax lawyers, CPAs, arguments, or excuses—just a flat-tax rate on all income.
And it’s easy to set the tax rate. Once we know, for any given year, predicted government spending (say, $1 trillion in 2012) it’s easy to calculate the percentage individual fixed tax rate necessary to cover that outlay. Say, for example, for next year this is calculated to be 15 percent of your annual income. Just imagine how easy it will be to fill out your individual income tax return. After name, address, and social security number, there will be just two lines, Total Income and Tax to Pay, based on 15 percent of that income. Of course we will try to hide as much income as we can. But that will be difficult since payment transactions will be accountable via electronic issuing and billing, and cash will be limited to small bills.
Is the astonishing simplicity of this idea the reason it is so dubiously greeted, or is it because the rich don’t like it? I don’t know. But once it sinks in against the howls of protestation of all the parasites profiting from today’s prehensile taxing systems, it is so sound—like the irrepressible beauty of the truth of a mathematical proof—that its appeal is irresistible. For not only is it manifestly fair in that all of us share equally in the tax burden, but it is also the middle-class rebellion that the majority of us disproportionate-tax-paying middle class are seeking. In addition, it perpetuates the concept of “graduated taxation” in that the more you earn, the greater the dollar tax amount you have to pay even though you pay at the same percentage rate as someone far less well-off. There is a one-time downside, however. The cut in staff of the Department of Revenue will be huge.
Another aspect of this flat-tax proposal is to use it to begin paying off the national debt. For example, by setting an additional flat-percentage rate (say, 1 percent) on all income, this residual would be earmarked annually for paying down the $14 trillion inherited from our present debt-ridden system. True, this would be an added taxpayer burden, but the national debt cannot be ignored. Since we don’t think twice about putting families in the street via foreclosure on their homes, the least we can do as a nation is to be fiscally responsible for our children’s future. The sooner we start paying down the national debt, the sooner it will disappear.
As time goes by—quite some time of course—the flat-percentage rate can be altered to one commensurate with a rate sufficient only to cover annual government outlay. Budget deficits would then be outlawed and changes in the flat taxation rate made necessary only after periods of, say, a congressional house term, and then only with the approval of two-thirds of the Senate. The result: a lawfully guaranteed fiscal responsibility that previous governments, Democratic or Republican, have seen fit to ignore as if they had the right to pass the buck to each new generation.
Wouldn’t this be a crowning achievement of a civilized society?
------------------------------------------------------------
To know more about Jim Knapton’s new book, Changing Our World: Solutions for a Future, visit his website at http://www.ottolinepublishing.com/. You can send him mail at info@ottolinepublishing.com.
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