The income tax turns most Americans into wage slaves. The super rich, people like the Kennedy’s, Rockefellers, etc. support the income tax and usually agitate for tax increases while their own fortunes are securely sheltered. Multinational corporations support an income tax that has virtually replaced the tariff, a tax that used to be paid by them, which was previously the primary means for the government to raise revenue. To the Federal Reserve, the income tax insures that the interest bearing bonds that they buy from the federal government will be paid back with taxpayer money. To the government itself, the income tax is a guaranteed means of supporting their increasing size, their massive programs, and their payoffs to non productive interest groups. In short, everybody loves the income tax except the producer of wealth, the 80% of us Americans who are working for a living. We are getting royally screwed.
We are never going to pull ourselves out of the hole unless we change our system from one that taxes production to one that taxes consumption. The idea of penalizing the income earner at the point at which the income is earned is impractical and immoral. It discourages savings and investment while it encourages debt. It is a corrupting and at times forceful intrusion into the property and private business of the citizen by the government. It suppresses business creation and growth while it furthers the concentration of wealth in the hands of the very rich.
A consumption tax, on the other hand, is fair as the taxpayer retains the right to choose whether or not to buy the taxed product. The government knows that if a consumption tax is too high the product will not be purchased. This is why it is easier for the government to just tax all income outright. The revenue from certain consumption taxes, such as a gas tax, is earmarked toward paying for the maintenance of roads and bridges. A very fair tax since the consumer of gas uses these services and should be willing to pay for them.
The idea of free trade is quite trendy but why should multinational corporations be able to import products into this country tax free while undercutting American companies and workers? Often the American worker is competing against slave labor from places like Communist China. The multinational corporation pays no import tax while the life blood is being drained from the American worker both in taxes and in lost jobs. A return of the constitutional tariff system and the elimination of the income tax would increase savings, investment, and domestic production.
The government has us over a barrel. They know that with the taxing power, they can fund virtually any program or agency. They know that they can borrow from the Federal Reserve and back up the bonds with projected future earnings from taxes. That way they can spend a virtually unlimited amount of money into the economy without increasing taxes or inflation immediately. The taxes will be increased, or the dollar devalued, years down the road when the bonds become due. At that point, the big spending politician has retired and the government program has become permanent.
Getting rid of the income tax will force the government to exercise fiscal responsibility. Without the guaranteed yearly fleecing of the citizen, borrowing from the Federal Reserve and other sources would be more difficult for the government and, therefore, spending would be more circumspect. The result would be a long overdue reduction in the size and power of government and a rapid shrinking of the national debt. The average citizen would have an opportunity to live beyond the next paycheck. A return to the tariff system and a consumption tax, the way our government successfully conducted business before 1913, would allow for an increase in domestic production and would free the income earner to save and invest in his future and, by proxy, the future of the country.