Monday, January 10, 2011

Abolish the IRS

"After the 16th Amendment was ratified, an income tax was imposed starting in 1913 with rates ranging from 1 percent to 7 percent with the top rate applying only to incomes in excess of $500,000. By 1916 that top rate had risen to 15 percent, on income in excess of $2,000,000. The top rate exceeded 90 percent at its peak in the early 1950s. The first 1040 form -- instructions and all -- took up only four pages. Today there are some 4,000 pages of tax forms and instructions. American workers and business are forced to spend more than 5.4 billion man-hours every year figuring out their taxes. Since those hours could be put to a more productive use, and almost surely would be in the absence of today’s incomprehensible tax code, the result is a large dead-weight output loss of some $200 billion each year. ... The IRS now has more enforcement personnel than the EPA, BATF, OSHA, FDA, and DEA combined. With its 115,000-man workforce, it has the power to search the property and financial documents of American citizens without a search warrant and to seize property from American citizens without a trial. It routinely does both. Economist James L. Payne has written a most revealing analysis of the IRS, a 1993 book entitled Costly Returns. He arrives at a stunning conclusion, the total cost to collect our federal taxes, including the effects on the economy as a whole adds up to an amazing 65 percent of all the tax dollars received annually. The U.S. tax system, says Payne, has produced hundreds of thousands of victims of erroneous IRS penalties, liens, levies, and tax advice. In answering taxpayer questions, for example, the IRS telephone information service has in previous years given about one-third of all callers -- as many as 8.5 million Americans -- the wrong answers to their questions. A 1987 General Accounting Office study found that 47 percent of a random sample of IRS correspondence -- including demands for payments -- contained errors. Incredibly a GAO audit of the IRS in 1993 found widespread evidence of financial malfeasance and gross negligence at the agency. The IRS could not account for 64 percent of its congressional appropriation!" ~ Dr. Lawrence W. Reed, President of the Foundation for Economic Education

This quote is from 1995. Think it's gotten any better since then?

Let's abolish the IRS and go to something simpler.


Mad Jack said...

I'll vote for that. I'm not holding my breath, though. Consider that the IRS is the core source of a gigantic industry in the United States. The tax code, when printed, is over eight feet in length on standard eight and a half by eleven paper. Accounting firms of all sizes and costs are needed to navigate the tax code and file all forms correctly. Even then, the problems are legion. The number of lives that have been ruined, irreparably ruined by the IRS is uncountable, even unguessable. People have committed suicide because they couldn't deal with the IRS and they couldn't face a lifetime of certain poverty, knowing that no matter how much money they made in their lives they'd never see any of it.

Personally, I'd string every single IRS employee up by their thumbs in the public square and bugger them at high noon. But that's just me.

-Sepp said...

I like the idea!
The problem though with abolishing the IRS is that it takes away from the government a measure of control over the people.
The IRS is an arm of the government that uses fear to get compliance and as much private information from every individual in the country.
Take away that power and the fear and we'll end up with a populace who doesent fear the government any longer...can't have that happen now can we?

skeeter1107 said...

As someone that has worked in taxes for decades now, the problem stems from the code itself. As the code has expanded, so has the bureaucracy and the zeal of politicians to collect revenue.

Mad Jack is correct in that unknown numbers of people have had their lives ruined by the IRS.

We will need some form of the IRS to collect federal tax revenues. However, I would advocate an abolition of the income tax in favor of a Value Added Tax VAT, and only a VAT. No Income TAX at the federal level.

That way, everyone pays.

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