It is time to abolish the Internal Revenue Service and adopt a Flat Tax.
A Flat Tax is a system under which you list your annual gross income, multiply it by a fixed percentage and pay the resulting figure. You could do it on a post card rather than taking months to calculate all of your tax forms. Under a Flat Tax, the Internal Revenue Service would be eliminated.
Meanwhile, online.wsj.com, the website of The Wall Street Journal reported on April 13, 2013 about Obama taxes on their 2012 income:
WASHINGTON—President Barack Obama and First Lady Michelle Obama paid $112,214 in federal income taxes in 2012 on adjusted gross income of $608,611, an effective rate of 18.4%, the White House said Friday.
So after taking a political position that “the rich” must pay more in taxes and advocating for years to raise the top rate from 35% to 39%, the Obamas themselves are paying only 18.4%.
Why? Why don’t they just skip all of their deductions and pay the top rate?
Answer: Because they are Democrats and Obama knows that he can do this because his media friends will never make an issue of it.
In fact, Obama has repeatedly sought to invoke The Buffett Rule, a law that would require wealthy people to always pay a higher rate than people lower down on the economic scale.
Because Warren Buffett, America’s second richest man, has repeatedly claimed that he pays a lower tax rate than his secretary. But that is totally fake. There are two scenarios under which the Buffett claim is true, both of which are deceptive:
#1) Buffett’s ‘net worth’ is, oh, say, $50 billion. But his company is reported to only pay him an annual “official salary” of $80,000 while his personal secretary makes more than that, up to $200,000 annually according to news reports. So on that “salary”, Buffett indeed pays a lower rate than she would because he ‘makes less money’.
#2) The other explanation is that Buffett’s ‘annual income’ (outside of his $80,000 “salary”) is surely in the billions and comes from capital gains (profits, interest, dividends etc.) on his investments (his $50 billion). Those gains are taxed at the capital gains rate of 15%. This is a ‘second tax’ on his income because your investment capital is money that is left over after you pay your taxes the first time around.
So if Buffett’s secretary makes $200,000 she could easily be taxed much higher than Buffett’s 15% capital gains rate. Her rate would be the same as “wealthy Americans” before deductions.
Thus don’t believe Obama’s hot air. Warren Buffett’s secretary does not have a $25 million mansion in California and a $75 million private jet.
And by the way, here is an excerpt from money.cnn.com on April 13, 2012 about Obama’s 2011 taxes:
“The president's secretary pays a slightly higher rate this year than the president on her substantially lower income," White House spokeswoman Amy Brundage told CNNMoney.
The president's secretary is Anita J. Breckenridge, and according to White House disclosure forms, the "personal aide to the president" earns $95,000 a year.
So there you go… Democrats never live by their own rules.
Meanwhile, the previous commissioner of the Internal Revenue Service under Obama Douglas Shulman said on a C-Span Newsmakers program in 2011 that he used a tax preparer on his returns. “I've used one for years,” said Shulman. “I find it convenient. I find the tax code complex so I use a preparer.”
Some Americans might find this amusing but it should be infuriating. This is why we need to abolish the Internal Revenue Service entirely, which can be done easily with one simple piece of legislation.
The tax code is a monster. It is now is 74,000 pages. It did not even exist before 1913. Few can understand it, not even the commissioner of the IRS. So why should every American be subject to it?
We should not. We need genuine reforms like a Flat Tax.
This would be called “tax simplification”. But Democrats will fight a Flat Tax or any other alternative tax system because they use the IRS to harass the citizenry, harm political opponents, instill fear of the government, and employ tens of thousands of bureaucrats.
And because they know that a Flat Tax will actually work and will show them for who they are.
The current tax system is like a door with 10 locks, with the government controlling all the keys. Conservatives want to use a Flat Tax to finally open the door to total tax simplification.
This current collection system costs huge amounts of time and money just for tax preparation itself. According to the Heritage Foundation in 2007, based on figures from The Tax Foundation:
“All taxpayers, not just small businesses, face rising compliance costs. Americans spent billions of hours and an estimated $279 billion filling out their federal income taxes last year alone.”
$279 billion! Not in taxes but just in time and money to pay the preparers, accountants and lawyers! In other words it costs you more and more money just to pay more and more in taxes. Imagine what $279 billion could do to spur economic growth if it were directed toward investment in new businesses rather than to lawyers and accountants and wasted time.
Said The Tax Foundation:
The full cost of a tax system is more than the amount of tax paid. It also includes the cost of tax planning and paperwork. Economists call these "tax compliance" costs, and the IRS estimates Americans spend 6.6 billion hours per year filling out tax forms—including 1.6 billion hours on the 1040 form alone. In 2002 Americans spent roughly $194 billion dollars on tax compliance. That amounts to 20 cents of compliance cost for every dollar collected by the tax system.
So not only is so-called tax compliance a monetary cost but a huge expense in wasted time and productivity, and months of anxiety for tens of millions of Americans.
Then the same Democrats who have entrenched this awful system talk about how America needs more jobs and more growth. Which we easily could have if we were not wasting all that time and money just to prepare tax returns.
The Flat Tax is so simple that Democrats literally fear it. Because it would free Americans from the tyranny of the current tax code.
A Flat Tax could easily be implemented across the board, no exceptions, no government tinkering with every detail, no waivers. And these three benefits would accrue:
A) The Internal Revenue Service would be abolished along with its $11 billion annual budget. This would help reduce our budget deficit.
B) No more payments would need to be made to the nonexistent IRS and the tax code would be scrapped. No more forms to fill out, no 1040, 1099, W-2 etc. All federal taxes would be collected through the Flat Tax; you would pay your tax with one simple form, just three lines long.
C) The $279 billion annual savings for tax preparation would be a huge boost to the economy. So would all the time and personal energy saved.
What could be simpler? Even Russia has implemented a Flat Tax and it has seen direct and positive economic results, like conservatives always know will happen.
It is truly time to scrap the current tax system.
Abolish the Internal Revenue Service!
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