Originally published March 23 2005
Tax reform is really just a political shell game, explains Rep. Ron Paul
by Mike Adams, the Health Ranger, NaturalNews Editor
According to Rep. Ron Paul (R-TX), tax reform is like a shell game where tax payments are hidden from view. Whether people pay through income tax or through the proposed national income tax, it is still the same money coming from the same pockets. Thus, true tax reform can only come from a fundamental tax cut (combined with a reduction in government spending), not the constant effort to make someone else pay for the exorbitant national budget.
Tax reform is back in the news, brought to the political forefront by a recent meeting of the president's advisory panel on tax reform.
Once again, politicians and former politicians are lamenting the complexity of our tax laws, as though their own spending measures have nothing to do with it.
In fact, we've been promised a simpler, fairer, and better income tax system many times, most recently in 1997 and 1986 when Congress made relatively significant changes to the tax code.
Yet the federal tax system remains an embarrassment, both in terms of the tax burden itself and the outrageous compliance costs engendered by its complexity.
One tax reform idea tacitly endorsed by Federal Reserve chairman Alan Greenspan calls for a national retail consumption tax to replace the existing income tax.
One can easily imagine popular support for retaining the income tax on the "very rich," which of course is how the 16th amendment originally was sold to a gullible public in the 1910s.
The president has thrown cold water on the consumption tax proposal, however, by announcing he opposes any reform that eliminates mortgage and charitable deductions.
This leaves us with variations on the flat tax concept, which was savaged by the political left when advocated by the likes of House Majority Leader Dick Armey and Steve Forbes in the 1990s.
Lew Rockwell of the Ludwig von Mises Institute offers a very simple test for any tax reform proposal: Does it reduce or eliminate an existing tax?
When reform proposals seem complicated, they almost certainly don't cut taxes.
The reform debate is strictly about politics and not serious economics.
This implies that government owns everything, and that any tax rate less than 100% costs government some of its rightful bounty.
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