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The IRS Must Be Put Down Like a Rabid Dog

Any tax reform that leaves the IRS in place is not a reform, but a continuance. The IRS must go!

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Since it was first disclosed that the IRS abused the taxpayers and the law, the Democrat refrain has been, “…it is clear that there was no White House involvement...” Well, now it is clear that there was White House involvement, but it is against the law to disclose it.

A watchdog group, Cause of Action, filed a Freedom of Information Act request for email between the IRS and the White House. They have been informed by the Treasury Department that 2,509 such emails exist, but: “These pages consist of return information protected by 26 U.S.C. § 6103 and may not be disclosed absent an express statutory exception. Because no such exception exists here, we are withholding those.”

So, it is a felony to disclose the information that the IRS disclosed to the White House unless Congress passes a statutory exemption that will not become law unless this president, who broke the law, agrees to sign the statute so that we can see how he broke the law. Fat chance!

That, dear reader, is why the much talked about tax reform in the new Congress will fail. Any tax reform that leaves a corrupt system in place will be abused again by future administrations as unscrupulous as the Obama administration.

While political abuse of the taxpayer is a felony, economic abuse of the taxpayer is statutory. Thank the Congress for that.

The Mercatus Center at George Mason University puts the economic costs of the current tax code at $500 billion to $1 trillion each year. An earlier study concluded that it costs a typical small business $724 to collect, comply, and remit $100. That is not just inefficient... That is stupid.

Our tax code has created an underground economy of $2 trillion to $3 trillion and keeps in excess of $20 trillion in offshore financial centers. This money wants to be in our economy—and should be in our economy—but is not because of the tax costs of repatriation.

It takes thousands of companies to get a loaf of bread to your table, starting with getting oil out of the ground to make fuel for trucks, to getting ore out of the ground to make steel for tractors. Those companies have business expenses and tax expenses. The only mechanism they have to recoup costs is price. You pay those costs when you buy the bread.

A Harvard study concluded that the tax component in the price system is 22 percent. Competing in a global economy with a 22 percent tax component in our price system makes us less competitive and drives jobs offshore.

These four problems—Offshore money, costs of compliance, underground economy and embedded costs—all remain in place when we nibble around the edges of the current code. All go away if we abolish the code and tax consumption rather than income.

The FairTax solves all of the above. It is a universal sales tax levied at the checkout counter on the purchase of new goods and services for personal use. There is no tax on used goods, since nothing should be taxed more than once.

Under the FairTax there is no tax on business activity. There is no tax on personal income, corporate income, dividends or capital gains. No gift tax or estate tax. All are repealed and the IRS is abolished.

Currently an average income earner gives the federal government 23 cents of every dollar they earn—15 percent income tax and 8 percent payroll tax. Under the FairTax they would give the government 23 percent of every dollar they spend. Money saved is not taxed.

By eliminating the IRS, and thus compliance costs, we will share a five- to ten-trillion-dollar tax cut. Prices will decline because the embedded costs are gone. Take-home pay will increase since there would be no deductions from the paycheck. These two events, a reduction in prices and increase in take-home pay, will provide a 22 percent increase in purchasing power for everyone who spends all that they earn.

We will be untouchable in a global economy because we will export products with no tax component in our pricing system.

To effectively untax necessities, a cash distribution is made to every household based on the size of the household. The prebate for a family of four would be sufficient to allow that family to spend $31,000 with no tax consequences.

Beyond that, we are all voluntary spenders and we will all be voluntary taxpayers. We will pay taxes when we choose, as much as we choose, by how we choose to spend.

Finally, the IRS will be put down like a rabid dog. No agency of government should have the power to abuse our personal information for political gain, which the IRS has proven its willing to do.

TheBlaze contributor channel supports an open discourse on a range of views. The opinions expressed in this channel are solely those of each individual author.

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