Article 1, Section 8, of the Constitution grants the legislature power to levy taxes, borrow money as needed, perform an extensive list of functions & make all laws necessary to carry out their constitutional powers. The list of powers, especially the power to tax & borrow, is virtually unlimited, & stands in direct opposition to the 5th & 14th Amendments, which guarantee the right to life, liberty & property & that private property may not be appropriated for public use without just compensation. The current regime is dictating surrender terms of the prosperous, in the socialist-envisioned, class warfare between the taxpayer-class & the tax-consumer-class, by means of forced, redistribution of wealth to achieve “Social Justice”.
Our current income tax is said to be a "progressive" tax, as those with greater incomes pay more taxes. However, a single rate, flat tax, say of 20%, would be an example of a simple, progressive tax: Someone earning a lower income of say, $40,000/year, would pay $8,000 in tax, while someone with a greater income, say $200,000/year, would pay $40,000 in tax--even though the tax rate is the same, the taxes paid by the more prosperous far exceed those paid by the less prosperous. Our current income tax system, including the pending Obama tax hikes, is really a doubly progressive tax: someone earning $40,000/year might pay $4,000 in taxes, while someone earning $200,000/year might pay $120,000 in taxes. Most small businesses would pay income taxes at the higher rate. Facing this exorbitant level of taxation, & considering the tidal-wave of new regulations coming from the Obama Administration, it’s no wonder small businesses are hunkering down, holding onto cash, & putting off expansion, production & job creation.
One of the greatest vehicles for congressional corruption is our income tax code. Special interest groups lobby lawmakers to grant the groups they represent exceptions or reductions in taxation, or special taxes are enacted that are earmarked as pork-barrel funds to these groups. These lobbyists provide either valuable perks (bribes) or campaign contributions (not considered so, but still are bribes) so incumbents can retain their seats in elections, & be available to be lobbied & do additional favors by further modifying the tax code during the next session. Eliminating the temptation to alter the tax code for personal or political gain, would go a long way toward bringing a new, unfamiliar air of integrity to Capitol Hill.
Historically, when taxes have been raised on the more prosperous, revenue actually collected from these folks ends up being considerably less than when they are taxed at lower rates. It seems that, facing a high tax rate, the more prosperous invest more of their money offshore or in tax-free bonds. Subsequently, there is less capital for investing in our country’s economy & for businesses to create jobs & prosperity. The wealthy are also more likely to take advantage of our overcomplicated tax code to avoid paying the high taxes. Those who live outside the law (outlaws: including criminals, drug cartels & illegal aliens), also largely avoid paying any income or payroll tax, while fully utilizing taxpayer-supported social, educational, healthcare & other services. The ideal replacement for our income tax, would convert all of these groups of people that traditionally avoid paying taxes, to full taxpayers.
Disposing of thousands of pages of income tax code, & replacing our income tax with a national sales tax coupled with a sliding-scale monthly rebate based on income (The FairTax), would remedy many of the problems that exist in our current system. The FairTax (www.FairTax.org) would vastly simplify the process of taxation, saving hundreds of millions of dollars & hundreds of hours of lost productivity each year currently wasted on income tax preparation & filing. The national sales tax would be collected by those who currently collect existing state sales tax (retail businesses) when all people buying goods & services in the U.S., even the wealthy with expensive tax attorneys, outlaws & illegal aliens, will participate in paying taxes. The FairTax would also dramatically reduce opportunities for congressional corruption & obviate the need for armies of highly-paid Washington lobbyists.
No discussion of government fiscal responsibility would be complete without addressing the issue of entitlement reform. Almost 75% of annual federal spending is fixed by law and spent on entitlements long before Congress can have anything to do with spending, leaving little more than 25% as discretionary, that is, Congress can say how, only this small portion of the federal budget, will be spent. While most of us still labor under the illusion that our payroll taxes pay into a fund that is preserved to pay benefits to retirees, the hard truth is that payroll taxes go into the general fund & Congress spends the entire amount each year—Medicare & Social Security Trust Fund vaults are empty, except for IOUs from the government. If we fail to constructively reform these entitlements, in a few years there will be no benefits for anyone as the government will be insolvent, broke, with astronomical deficits.
Rep. Paul Ryan has developed a “Roadmap for America’s Future” (which can be found online at www.roadmap.republicans.budget.house.gov), which preserves entitlement benefits unchanged for those age 55 and older, while reforming financing & benefits for those age less than 55, compatible with the survival of these programs & paying off of the deficit by 2060. Any attempt to change entitlement programs, is naturally met with stiff resistance, especially by our seniors. However, seniors should be reassured that, under the Ryan plan, the programs will not change for seniors (those age 55 & older). In addition, all concerned must understand that without entitlement reform, there would be no benefits in several years; only with responsible reform can we assure that these programs have a future.
Anything that further restrains Congress' almost unlimited, constitutional power to borrow, tax & spend, such as a Balanced Budget Amendment, or procedural measures like requiring a 2/3'rds chamber vote to raise taxes, should be considered. Thousands of honorable candidates for high office, from across the country, who will stand firm & fight for fiscal responsibility, constitutionally limited government & a free market, need to be groomed, nominated, campaigned for & elected to office. Term limits need to be considered to prevent incumbents from becoming entrenched, professional politicians.
The Seniority System & Party Dominance in regard to power & perks in both chambers of Congress, must be scrapped in favor of each lawmaker, having been sent to Congress to represent his constituents who should receive equal representation with other constituencies, exercises an equal voice & power to get things done, regardless of the majority political party or the length of service in office.
In the end, we may have to amend Article 1, Section 8, to constitutionally restrict Congress’ power to commit these fiscal abuses. These & other fiscal restraint measures, along with necessary, responsible entitlement reform along the lines of Rep. Paul Ryan's "Roadmap", tax reform along the lines of the FairTax & a little good luck, will save us from national bankruptcy & permit us to embark on the road to true fiscal responsibility.