I am building a series of practical amendments that I think will have great appeal to much of the populace and to state governments. The idea is to propose through the states amendments that can reign in the Federal government rather than asking the Fed to give up power willingly. I wrote previously about building a method for state legislatures to repeal laws passed by the Federal government. Now I will deal with the most abused power of our Federal government:
The Power to Tax is the Power to Kill.
Most of the tax discussions center around a fair tax, flat tax, VAT, or some other approach to a Federal Tax. After reading through the Constitution I believe all of these are the wrong approach. I don’t think there is any possible national taxation method that will end the manipulation of every family, every business, and encourage every industry to seek tax goodies. The best system is one in which the IRS is stripped of all power in a way that it can never be resuscitated.
Our founders put in place a system in which the Federal government could levy items entering the nation and bill for services (land leases for example). However, almost all other revenue had to come by delivering a tax bill to each of the states in proportion to their population. Since the 16th amendment however the Federal government has become a part of every hiring decision, every manufacturing decision, and every other choice in our “free” country through the power to tax (including Obamacare). I propose that the Federal government be returned to a system in which levies are determined not by income but by population. Therefore a repeal of the 16th amendment would look like:
Section 1: The 16th amendment is hereby repealed.
Section 2: The Federal government may raise revenue solely through the sale or lease of government assets, taxes levied to the states and territories in proportion to their populations as enumerated in the census, and tarrifs of goods imported to the United States.
Section 3: The outlays by the Federal government in any year may be no greater than the revenue collected in the previous year. This limit may be disregarded during times in which war has been declared by congress, or in order to purchase land from foreign powers. In both of the aforementioned cases the outlays may exceed revenues only with the approval of three fifths of each of the houses.
Section 4: Congress has the authority to determine when the year begins and ends for revenue balancing.
Perhaps Sections 3 & 4 should be separated into a different amendment since they deal with budget balancing and not taxation, but I would tie them together personally because these are the economic restraints I think should be applied to the Federal Government. One of the beautiful things about this proposed amendment is that if your state decides to operate in a manner that chases out the top 1% of earners you are rewarded by retaining 99% of your tax levy. So, states would have an extra incentive to reward economic creativity. If your state wants a highly progressive tax scheme that punishes production then that is fine, you are welcome to the system of your choice. The citizens of another state will not force you to give up your (flawed) system. However, you are not allowed to force our system into something worse.
This would also end tax breaks given to both wind and coal, ethanol and oil. It would end IRS audits. It would make a failure to file or pay taxes a state rather than Federal offense. It would end tax credits for stupid hybrid vehicles. There is so very much power that would be stripped from the Federal government if they could not continue taxing in their current form. The solution is not to change how they tax every action made within our borders, but to allow only ~52 tax bills to be sent (one to Alabama, one to Alaska …, one to Washington, and also be sure to include DC and Puerto Rico).