If we are to uphold the idea of all men possessing equal rights under the law, then there can certainly be no justification for our present PROGRESSIVE tax system. It is dictatorial and contrary to everything for which America stands.
As the renowned Scottish economist, J.R. McCulloch, stated over 150 years ago, "The moment you abandon the cardinal principle of extracting from all individuals the same proportion of their income or of their property, you are at sea without a rudder or compass, and there is no amount of injustice or folly you may not commit." [J.R. McCulloch, Taxation and the funding System, London, 1845, pp. 141-143.]
Our own Thomas Jefferson astutely summed up such reasoning when he wrote, "The true foundation of republican government is the equal right of every citizen, in his person and property, and in their management." [Letter to S. Kercheval, 1816.]
Under our present system, the blindfolded Goddess of Justice has been allowed to peek. "Tell me first who you are and what you earn," she says, "then I will tell you how the tax laws apply to you." This is privilege and arbitrary law, the harbingers of every tyranny throughout history.
This then is the moral and philosophical case for abolishing the progressive income tax. It is simply unjust, unconstitutional, illegal, and dictatorial. But in addition to the philosophical case, there is also a very powerful practical reason why ending this tax is so important. This is because, with progressive rates ended, there would no longer be any incentive for voters to try and gain their life's status by relentlessly increasing government spending, i.e., by redistributing wealth from the pockets of their neighbors.
Most Americans do not understand it, but the major cause of explosive government spending is our use of progressive tax rates to redistribute wealth. This is because the progressive income tax permits large constituencies of voters to pay ZERO TAXES and equally large constituencies to pay NEXT TO ZERO TAXES. These two groups comprise 50% of today's adult population. Thus, a progressive income tax spawns a "something for nothing" voter mindset that dominates all elections. [The top 50% of Americans pay 96.03% of taxes; the bottom 50% pay only 3.97%. Figures from Internal Revenue Service, Statistics of Income Division Unpublished Statistics, September 2002.]
When large groups of voters are allowed the privilege of paying nothing and next to nothing in taxes, an irresponsible electorate will inevitably evolve to demand a steady expansion of government services. This is basic human nature and one of the cardinal laws of economics. If government benefits are free (or nearly free), demand for them will be infinite. Consequently, in every election there is an automatic 50% base of voters who always favor those politicians who propose increased government spending!
Overcoming this INFINITE DEMAND for government spending will be impossible until we radically reform the tax system and eliminate its "something for nothing" aspect. This means ending ALL deductions, special breaks, loopholes, and rate progressivity. This will necessitate the adoption of a simple equal rate income tax (i.e., a genuine flat tax) that does not convey favors or exemptions to anybody.
Since voters would then have to pay for all government subsidies and pork barrel programs proportionately out of their own pockets, they would lose their overwhelming desire for such subsidies and programs. They would begin to favor politicians who advocate "reduction" of government instead of its "constant expansion," because this is the only way they could get their own taxes reduced and more freedom into their lives. All kinds of Ron Pauls would begin to appear in congressional elections every two years because the electorate would demand it. But as long as voters pay zero taxes or next to zero taxes, they will continue to favor politicians who offer more programs and more pork every November at election time. An "equal rate tax" is the only way to end the automatic expansion of government.
But such a flat tax must be a REAL flat tax, not the imposters put forth by the likes of Steve Forbes and Dick Armey. These two attempts to promote a flat tax are no answers at all because of their huge personal exemptions.
For example, the Forbes plan greatly increases personal exemptions (a family of four goes from $14,150 to $36,000). This, of course, will greatly increase the amount of people who pay zero and next to zero taxes -- from 50% of voters to 65% of voters. Thus the amount of people who have infinite demand for government services will become larger and even more irresponsible than it is at present! Such pseudo "tax reform" is totally insane! If we wish to shut down the inferno of government growth and spending, then we must eliminate "rate progressivity," not increase it. This means all voters must pay the same rates, which means no exemptions!
As sure as the sun will come up tomorrow, however, liberals will attack any genuine "equal rate tax" as unfair to the poor people. So if a floor is to be established under which no one will have to pay the tax, i.e., an exemption for those under the poverty level, then a provision must be included in the tax bill stating that those who are exempted from paying are to also be excluded from voting. Remember we are trying to restore a RESPONSIBLE electorate and legislature. This cannot be done if voters get their services free. All who vote must pay the tax -- period! This is the only way they will act responsibly. This is human nature. After all, we deny children the right to vote. Why do we do this? Because they are not mature enough to vote responsibly. The same principle applies to men and women who are exempt from taxes; they will never vote responsibly. They will possess "infinite demand" for government services.
