Simplifying the Tax Code
The framers of our Constitution and those who wrote in defense of its articles clearly intended to form a small but strong federal government. There were certain limited powers given to our national government to act on behalf of its citizens. However, all of the remaining powers were assumed by the states and subsequently handed back to “We the People.” To protect the people from a government that potentially could be overreaching in nature and in scope, our Founding Fathers decided to include the Bill of Rights. This was another clear expression of the “individual” nature of protection that the contract between the people and our government agreed to. These were the first 10 amendments to our Constitution. There are twenty-seven such amendments in total.
Amendment #10 states, “The powers not delegated to the United States by the constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.” Big government represents those who need to control power while small government represents those who seek to disperse individual freedoms and liberty. In view of the above, let us now take a look at the institution currently administering our tax code.
As of May 20, 2021 it is reported that the Internal Revenue Service used 83,000 full-time equivalent positions (irs.gov) with another 10,000+ part time and seasonal help. They also spend a whopping $12.3 billion (FY 2020). We now have a 75,000-page tax code (Forbes). Does anyone think that this is a little out of hand? Has the size of our government so exploded that we can no longer comprehend the magnitude of its intrusive nature? Are the bureaucracies of government and the administrative deep state so engrained and we so beholden to lobbyists and other nonprofit benefactors that it reduces our capacity to act in the best interests of all Americans?
It is for this reason that I would recommend a flat tax on income as a way of simplifying the tax code and ultimately drawing down the institutional bureaucracy, called the IRS. In what has become one of the most complex, inefficient, and incomprehensible tax code systems in the entire world, the need for change is now. Congress must agree to band together and right-size this outdated institution and tax code. They must say no to the current lobbyists who want to preserve sections of the existing tax code that favors their client’s self-serving interests and not those interests that benefit the entire nation. Simplification must be the cornerstone of any/all subsequent tax code changes. Simplification will ultimately relieve the regulatory burden and associated administrative costs. Here are some additional actions that should be taken:
· Eliminate the payroll tax
· Eliminate the business income tax
· Eliminate the death tax
· Eliminate the capital gains tax
· Eliminate the dividends and distribution tax
This guideline to streamlining our tax code will unleash an avalanche of investment, spur economic activity, and create new jobs. Our government should be small, efficient, and nimble enough to meet the demands of its citizens relating to our tax code system. Oh, by the way, it should fit on a postcard!