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Posts Tagged ‘tax code’

The Ron Paul Institute for Peace and Prosperity : True Civil Libertarians Must Oppose the IRS

Posted by M. C. on July 13, 2021

Another frightening proposal is for the government to impose a “mileage tax” to fund highway construction. A mileage tax would require government to keep track of how many miles every American drives. Some claim that a mileage tax can be implemented without creating a massive new system of government surveillance. Even If this were true, anyone who expects the government not to use this new power for nefarious purposes needs to Google Edward Snowden.

http://ronpaulinstitute.org/archives/featured-articles/2021/july/12/true-civil-libertarians-must-oppose-the-irs/

Written by Ron Paul Monday July 12, 2021
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Progressives who work to end individual rights violations committed by the NSA, FBI, DEA, CIA, and other federal agencies usually overlook, or even support, the routine violations of Americans’ rights by the IRS.

For example, progressives rarely, if ever, speak out against the IRS’s targeting of the opponents of those in power. When liberal Democrats control the White House, the IRS targets advocates of free markets. When hawkish Republicans are in power, the IRS targets antiwar activists.

The Democrats’ election reform legislation would require political organizations to divulge their top donors. Such donor disclosure requirements can be, and have been, used to intimidate donors from supporting “controversial” causes. Yet the requirements are supported by many progressives in the name of getting big money out of politics.

In order to “pay for” their massive spending schemes, President Biden and his congressional allies are planning a huge increase in the IRS budget. The declared purpose is to enable the tax agency to bring in to the government much more money by ramping up efforts to identify and punish those not paying the “proper” amount of taxes.

The tax code’s complexity guarantees many innocent Americans will be caught in the IRS’s expanded net. Yet progressives will support this because they favor the new social programs the new revenue will finance, and because they believe the IRS will only target billionaires and big corporations.

The truth is that most of the new revenue will be collected from middle-and-working-class Americans. These Americans will be targeted because, unlike billionaires and big corporations, middle-and-working-class Americans cannot afford legions of tax lawyers and accountants to level the playing field between them and the tax agency. They are more likely to simply give in to the IRS’s demands.

Waiters and waitresses may even be subjected to audits to ensure they are paying taxes on their tips.

Another frightening proposal is for the government to impose a “mileage tax” to fund highway construction. A mileage tax would require government to keep track of how many miles every American drives. Some claim that a mileage tax can be implemented without creating a massive new system of government surveillance. Even If this were true, anyone who expects the government not to use this new power for nefarious purposes needs to Google Edward Snowden.

Progressives’ blind spot toward IRS abuses of liberty is rooted in their belief that one can separate “economic” liberties from “civil” liberties. This allows them to support an abusive tax system to fund a welfare state (and, for an increasing number of progressives, a warfare state) while opposing other infringements on liberty. These progressives are the mirror image of conservatives who defend economic liberty while supporting government infringements on personal lifestyle choices. One of the most urgent tasks of those who wish to restore a free society in all areas is to end the artificial distinction between economic and civil liberties. By defending all liberty — no matter if it is classified as economic liberty or civil liberty — we can best protect against violations of any liberties.


Copyright © 2021 by RonPaul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.
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It’s the Bureaucracy, Genius: How Bureaucracy Has Lowered Productivity and Income | The Libertarian Institute

Posted by M. C. on March 1, 2020

…“the size of the [White House’s] National Security Council staff went from a few dozen under Henry Kissinger and Zbigniew Brzezinski to nearly 600 under President Obama.”

Do you feel more secure?

Companies eventually collapse from the deadweight and are replaced by more nimble and efficient competitors.  The same with nations, but it just takes a lot longer.

It’s more important to study regulations than to study the work of pioneers in the study of management and organizations, such as Henry L. Gantt, Max Weber, G. Elton Mayo, Mary Parker Follett, Kurt Lewin, F. J. Roethlisberger, Peter Drucker, Herbert A. Simon, Abraham Maslow, W. Edwards Deming, and others.  

https://libertarianinstitute.org/articles/its-the-bureaucracy-genius-how-bureaucracy-has-lowered-productivity-and-income/

by

The supposed brightest minds, educated in the supposed best universities, can’t figure out why American productivity has languished in this era of technological innovation, resulting in income growth being lower than it would otherwise be.

Well, my mediocre mind came up with the reason 29 years ago and wrote about it in my book and in scores of subsequent journal and newspaper articles.  This was certainly not a great intellectual feat, because the root problem was, and continues to be, obvious to anyone who is not isolated in an ivory tower, as the problem pervades corporations, nonprofits, universities, school districts, cities, states, and the federal government.

The problem is bureaucracy.

At the federal level, this destroyer of productivity and wealth can be seen in the 40,000 pages of the tax code, the thousands of pages of new federal rules every year in the Federal Register, and the proliferation of jobs in the private and public sectors to decipher the rules, comply with the rules, consult on the rules, and lobby on the rules.  Holders of these jobs then become a constituency that will fight to protect their jobs, including those on the right who rail against big government.

Then there are the jobs that propagate because the natural course of bureaucracy is to beget more bureaucracy.

Two recent letters to the editor of the Wall Street Journal gave examples of this.  One letter said that “the size of the [White House’s] National Security Council staff went from a few dozen under Henry Kissinger and Zbigniew Brzezinski to nearly 600 under President Obama.”

Do you feel more secure?

The other letter said that since the Defense Intelligence Agency (DIA) was established in 1961, it has ballooned to 17,000 employees.  The agency was established because the Army, Navy and Air Force had been issuing conflicting military assessments instead of working as a team in developing a joint assessment.

Is it any wonder that the top-heavy military became mired in Afghanistan and made the strategic blunder of the Iraq War?

The DIA is a textbook example of one of the major causes of bureaucracy:  A new bureaucracy is put over existing bureaucracies because the silos of the existing bureaucracies are lousy at communicating, cooperating and coordinating with each other.

The proper fix would be to kick the executives at the top of the silos in the ass, demand that they and their respective organizations work as a team, incentivize them to do so, and fire them if they don’t change their ways.  The proper fix is not to bury the underlying problem under another layer of management.

The Department of Homeland Security is another example of burying the underlying problem under another layer of management.  The department was established after 9/11 because different federal agencies had missed the terrorist threat, because they hadn’t shared critical information.  Was anyone fired over this?

Unnecessary jobs have also propagated in universities, where the number of administrators has doubled over the last 25 years, surpassing the growth in faculty and increasing the cost of a college degree—which in turn has increased tuition debt, which in turn has led to presidential candidates on the left calling for the erasing of the debt and making college free.  Tellingly, they don’t call for a reduction in administrative jobs, because many of the jobs exist to deal with regulations that they have sired.

Bureaucracy is not just a problem with universities and governments; it also pervades the private sector.  Sears is in its death throes today because it built the Sears Tower in the 1970s to house its burgeoning corporate staff and their fiefdoms and miles of red tape.   At the same time, Sam Walton was expanding his business in Rogers, Arkansas, where he was close to the customer.

Is it a coincidence or a case of cause and effect that Boeing’s disaster of the 737 MAX happened after it had relocated its headquarters to Chicago, far away from where its planes are designed and assembled in Seattle?

Is it a coincidence or a case of cause and effect that the Democrat and Republican parties became out of touch with Middle America, due to spending too much time in the wealthy imperial city of Washington, DC?

What does it portend for Google and Apple that they have built Versailles-like headquarters in locales that rival the Imperial City in being removed culturally and economically from mainstream America?  And what does it portend for the tech industry in general that its workforce is congregated in hip urban centers, where everyone has similar values, politics, interests, and glaring blind-spots about their imagined social awareness and moral superiority?

These questions raise the question of where a corporate headquarters should be located:  near where the main work of the business gets done, or near customers, or near suppliers, or near a talent pool, or what?  Actually, the location is less important than what the company does to ensure that the top of the organization doesn’t become out of touch with the employees on the firing line who make products or deal directly with customers; and, similarly, that dysfunctional behavior at the top—backstabbing, Machiavellian maneuvering, and poor coordination and communications—aren’t amplified throughout the lower levels of the organization.

To make matters worse, companies have bought organizational snake oil from tech companies and consultants, in the form of communications systems and message boards that supposedly connect all levels and departments, making it easier for employees to be in the know, to coordinate their work, and to give feedback to management.  But these systems can’t overcome dysfunctional politics, distrust, conflicting priorities, and lousy leadership.  Believing that they do is akin to believing that serious marital problems can be solved by spouses texting each other more.

Judging by the ever-increasing number of highly-paid and powerful staffers at corporate headquarters whose jobs and careers are dependent on pleasing the Leviathan in Washington, companies should move their headquarters to the Imperial City, as Amazon did with its second headquarters.  That way, the scores of tax attorneys, SEC lawyers, accountants, OSHA specialists, human resources managers, benefits managers, government affairs executives and others who specialize in brain-deadening government regulations—and who are often hardcore conservatives who rail against big government—could be close to the regulatory rice bowl that is the source of their income, influence and prestige.

In a 1995 commentary in the Wall Street Journal, I detailed the phony professionalization of the human resources function and its growth in power and pay, a growth that was in lockstep with the growth of workplace regulations, the increasingly counterproductive machinations of the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance, and the burgeoning rules governing 401(k) plans and employer-provided health insurance.  Naturally, the president of the Society of Human Resources Management took umbrage to what I wrote.

There is no room in today’s HR department for people who are grounded in human behavior, organizational dynamics, motivational theory, teambuilding, job design, productivity, and effective management practices.  It’s more important to study regulations than to study the work of pioneers in the study of management and organizations, such as Henry L. Gantt, Max Weber, G. Elton Mayo, Mary Parker Follett, Kurt Lewin, F. J. Roethlisberger, Peter Drucker, Herbert A. Simon, Abraham Maslow, W. Edwards Deming, and others.

Advertisements and commercials by firms selling HR software make it appear that the software will improve the workplace, when in actuality the software facilitates regulatory recordkeeping and further entrenches the HR bureaucracy.

Bureaucracy also pervades small businesses.  A noticeable example is the useless HIPAA privacy form that you sign in your doctor’s office, where a clerk is paid to give you the form, check if you signed and dated it, and then file it.   But what you don’t see are the high-priced consultants and software vendors behind the scenes who have become indispensable to physicians in complying with a plethora of regulations and reporting requirements, most of which has nothing to do with your health but can ensnare the physician in legal difficulties if not followed to the letter of the law.

A consequence has been that physicians are foregoing private practice to join large hospital groups, which have the economies of scale and staffing to handle the regulatory workload.   This means that the most personal of business relationships—your one-on-one relationship with a doctor—is being replaced by a relationship with a faceless corporation.

The private sector tends to be the realm of Republican bureaucrats who feed off the regulatory state, while the huge social-welfare and education complex tends to be the realm of Democrats, whose livelihoods depend on providing social services, housing, medical care, financial aid, and schooling to the underprivileged, at a cost of trillions of dollars over the decades.  Neither side has an interest in making themselves unnecessary or shrinking their rice bowls.

Imagine, for example, how much smaller the social-welfare complex would be if root socioeconomic problems had been addressed decades ago—or more specifically, if Daniel Patrick Moynihan’s warning had been heeded 55 years ago about the welfare state making black men unnecessary and thus destroying two-parent black families, which in turn has led to an increase in crime, in learning and behavioral problems in school, and in a political clamor for social justice without an understanding of how social justice was thwarted by the very same progressives now clamoring for social justice.

Not learning from what the welfare state has inflicted on blacks, the same institutional injustices have been inflicted on poor whites, with similar results:  broken marriages, one-parent families, drug abuse, obesity, low test scores, and dependency on welfare and disability payments.

As I calculated years ago, over 60% of voters live in a household where at least one member either works for the government or in a job dependent on the regulatory state, or receives welfare, an entitlement, or disability payments.  And in many locales in the country, the biggest employers are the defense industry or the medical industry, which is dependent on Medicare and Medicaid for half of its revenue.

In conclusion, you might want to know what needs to be done about bureaucracy.  Well, nothing needs to be done, because the problem is self-correcting.  Companies eventually collapse from the deadweight and are replaced by more nimble and efficient competitors.  The same with nations, but it just takes a lot longer.

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The Greatest Swindle in American History… And How They’ll Try It Again

Posted by M. C. on November 23, 2019

International Man: The Cayman Islands doesn’t have any form of direct taxation. What does that mean exactly?

Jeff Thomas: It means that the driving force behind the country is the private sector.

I think it’s safe to say that political leaders don’t really have any particular concern over whether a tax is applied to income, property, capital gains, inheritance, or any other trumped-up excuse. Their sole concern is to tax.

Taxation is the lifeblood of any government. Once that’s understood, it becomes easier to understand that government is merely a parasite. It takes from the population but doesn’t give back anything that the population couldn’t have provided for itself, generally more efficiently and cheaply.

https://internationalman.com/articles/the-greatest-swindle-in-american-history-and-how-they-will-try-it-again-soon/

by Jeff Thomas

International Man: Before 1913 there was no income tax, and the United States was a much freer country. Initially, the government sold the federal income tax to the American people as something only the rich would have to pay.

Jeff Thomas: Yes, exactly. It always begins this way. The average person is always happy to see the rich taken down a peg, so this makes the introduction of the concept of theft by the government more palatable. Once people have gotten used to the concept and accept it as being perfectly reasonable, then it’s time to begin to drop the bar as to who “the rich” are. Ultimately, the middle class are always the real target.

International Man: The top bracket in 1913 kicked in at $500,000 (equivalent to around $12 million today), and the tax rate for it was only 7%. The government taxed those making up to $20,000 (equivalent to around $475,000 today) at only 1% – that’s one percent.

Jeff Thomas: Any good politician understands that you begin with the thin end of the wedge, then expand upon that as soon as you feel you can get away with it. The speed at which the tax rises is commensurate with the level of tolerance of the people. And in different eras, the same nation may have a different mindset. The more domination a people have come to accept from their government, the faster the pillaging can be expanded.

As an example, the Stamp Tax that King George III placed upon the American colonies in the eighteenth century was very small indeed – less than two percent – but the colonists were very independent people, asking little from the king in the way of assistance, and instead, relying upon themselves for their well-being. Such self-reliant people tend to be very touchy as regards confiscations by governments, and even two percent was more than they would tolerate.

By comparison, if today, say, Texas were to eliminate all state taxation and allow only two percent in federal taxation, Washington would come down on them like a ton of bricks, saying they were attempting to become a “tax haven.” They’d be accused of money laundering and aiding terrorism and might well be cut out of the SWIFT system. The federal government would shut down the state government if necessary, but diminished tax would not be tolerated.

International Man: Of course, once the American people conceded the principle of an income tax in 1913, the politicians naturally couldn’t resist ramping it up. Just look at the monstrosity that exists today in the US tax code, which most Americans passively accept as “normal.” It’s a typical example of giving an inch and taking a mile.

Jeff Thomas: Yes – the key to it is twofold: First, you have to be sensitive as to how quickly you can ramp up taxation, and second, that rate is directly proportional to the level that the public receive largesse from the government. They have to have become highly dependent upon a nanny state and thereby willing to take their whipping from nanny. The greater the dependency, the greater the whipping.

International Man: Homeowners in the US – and most countries – must regularly pay property taxes, which are taxes on property that you supposedly own. Depending on where you live, they can be quite high and never seem to go down. What are your thoughts on the concept of property taxes?

Jeff Thomas: Well, my view would be biased, as my country of citizenship has never, in its 500-year history, had any direct taxation of any kind. The entire concept of direct taxation is therefore anathema to me. It’s easy for me to see, simply by looking around me, that a society operates best when it’s free of taxation and regulation and people have the opportunity to thrive within a free market.

Years ago, I built my first home from my savings alone, which had been sufficient, because my earnings were not purloined by my government. I never paid a penny on a mortgage and I never paid a penny on property tax. So, following the construction of my home, I was able to advance economically very quickly. And of course, I additionally had the knowledge that, unlike most people in the world, I actually owned my own home – I wasn’t in the process of buying it from my bank and/or government.

So, not surprisingly, I regard property tax as being as immoral and as insidious as any other form of direct taxation.

International Man: Not all countries have a property tax. How do they manage?

Jeff Thomas: I think it’s safe to say that political leaders don’t really have any particular concern over whether a tax is applied to income, property, capital gains, inheritance, or any other trumped-up excuse. Their sole concern is to tax.

Taxation is the lifeblood of any government. Once that’s understood, it becomes easier to understand that government is merely a parasite. It takes from the population but doesn’t give back anything that the population couldn’t have provided for itself, generally more efficiently and cheaply.

So, as to how a government can manage without a property tax, we can go back to your comment that the US actually had no permanent income tax until 1913. That means that they accomplished the entire western expansion and the creation of the industrial revolution without such taxation.

So, how was this possible? Well, the government was much smaller. Without major taxes, it could become only so large and dominant. The rest was left to private enterprise. And private enterprise is always more productive than any government can be.

Smaller government is inherently better for any nation. Governments must be kept anemic.

International Man: The Cayman Islands doesn’t have any form of direct taxation. What does that mean exactly?

Jeff Thomas: It means that the driving force behind the country is the private sector. We tend to be very involved in government decisions and, in fact, generate many of the decisions. Laws that I’ve written privately for the Cayman Islands have been adopted by the legislature with no change whatsoever to benefit government. As regards property tax, there are only three countries in the western hemisphere that have no property tax, and not surprisingly, all of them are island nations: The Turks and Caicos Islands, Dominica and the Cayman Islands.

I should mention that the very concept of property ownership without taxation goes beyond the concern for paying an annual fee to a government. Additionally, in times of economic crisis, governments have been known to dramatically increase property taxes. Further, they sometimes announce that your tax was not paid for the year (even if it was) and they confiscate your property as a penalty. This has been done in several countries.

What’s important here is that, with no tax obligation, the government in question is unable to simply raise an existing tax. If you have no reporting obligation, you truly own your property. And you can’t be the victim of a “legal” land-grab.

Instituting a new tax is more difficult than raising an existing one, and instituting any tax in a country where direct taxation has never existed is next to impossible.

International Man: How do Cayman’s tax policies relate to its position as a business-friendly jurisdiction?

Jeff Thomas: Well there are two answers to that. The first is that the Cayman Islands operates under English Common Law, as opposed to Civil Law. That means that as a non-Caymanian, you’re virtually my equal under the law. Your rights of property ownership are equal to mine. Therefore, an overseas investor, even if he never sets foot on Cayman, cannot have his property there taken from him by government, squatters, or any other entity such as can legally do so in many other countries.

The second answer is that, since we’re a small island group, the great majority of business revenue comes from overseas investors. Therefore, our politicians, even if they’re of no better character than politicians in other countries, understand that, if they change a law or create a tax that’s detrimental to foreign investors and depositors, wealth can be removed from Cayman in a keystroke of the computer. Before the ink is dried on the new legislation, billions of dollars can exit, on the knowledge that the legislation is taking place.

Now, our political leaders may not be any more compassionate than those of any other country. Their one concern is that their own bread gets buttered. But should they pass any legislation that’s significantly detrimental to overseas investors, their careers are over. They understand that and recognise that their future depends upon making sure that they understand and cater to investors’ needs.

International Man: Governments everywhere are squeezing their citizens through higher taxes and new taxes. And don’t forget that printing money, which debases the currency, is also a real, but somewhat hidden, tax too.

What do you suggest people do to protect themselves?

Jeff Thomas: Well, the first thing to understand is that many nations of the world grabbed onto the post-war coattails of the United States. The US was going to lead the world, and Europe, the UK, Canada, Australia, Japan, etc., all got on board for the big ride to prosperity. They followed all the moves the US made over the decades.

Unfortunately, once they were on board the train, they couldn’t get off. When the US went from being the largest creditor nation to the largest debtor nation, those same countries also got onto the debt heroin.

That big party is coming to an end, and when it does, all countries that are on the train will go over the cliff. So, what that means is that you, as an individual, do not want to be on that train. If you’re a resident of an at-risk country, you want to, first and foremost, liquidate your assets in that country and get the proceeds out. You may leave behind some spending money in a bank account – so that you have the convenience of chequing, ATMs, etc. – and that money should be regarded as sacrificial.

You then would want to move the proceeds to a jurisdiction that’s likely to not only survive the train wreck but prosper as a result of it. Once it’s there, you want to keep it outside of banks and in forms that are difficult to take from you – cash, real estate and precious metals.

After that, if you’re able to do so, it would be wise to also get yourself out before a crash, as the day will come when migration controls will be imposed and it will no longer be legal to exit.

It does take some doing, but if faced with a dramatic change in life, I’d want to be proactive in selecting what was best for me and my family, before the changing socio-economic landscape made that choice for me.

Editor’s Note: Governments everywhere are squeezing their citizens through increased taxation and money printing–which is a hidden tax. This trend will only gain momentum as governments go broke and need more cash.

Most people have no idea what really happens when a currency collapses, let alone how to prepare.

That’s precisely why bestselling author Doug Casey and his team just released this new video. It shows how it could all go down, and what you can do about it. Click here to watch it now.

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Senate Bill Hits Obstacle Over Deficit Concern

Posted by M. C. on December 1, 2017

Reform does not reduction. But that is the implication. The problem is you can’t reduce taxes while building a world wide empire via the military.

This is all smoke and mirrors. Shuffling the deck trying to keep tax revenue the same.

True tax reform means lowering taxes. You can’t lower taxes without reducing the size of government. Expecting tax reduction from those whose jobs rely on increasing the size of government is folly.

https://www.wsj.com/articles/senate-bill-hits-obstacle-over-deficit-1512083103

But Thursday’s cascade of problems—including a parliamentary hurdle and a nonpartisan analysis that said the bill wouldn’t pay for itself with economic growth and would instead add $1 trillion in budget deficits over a decade—forced a late rethinking just as Republicans were speeding toward a final vote.

 

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Don’t Fall for Tax Reform | Mises Wire

Posted by M. C. on September 29, 2017

Congress does not have the intellectual ability let alone the morals and intestinal fortitude to get the job done. The tax code should be about ten pages, not tens of thousands.

Who will bet anything congress does will result in larger, not smaller, pile of pages?

https://mises.org/blog/dont-fall-tax-reform

It’s a con, and a shell game. It’s a promise every presidential candidate makes, including Trump. But we ought to be suspicious of grandiose talk about Congress reforming anything. Tax reform proposals always evade and obscure the real issue, which is the total cost– financial, compliance, and human– taxes impose on society. The fundamental questions about war and entitlements and state power go unasked. We never consider whether Congress really needs to spend more than $4 trillion in 2018, or how it managed to double federal spending in only 15 years.  Read the rest of this entry »

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Taxation Is Theft

Posted by M. C. on April 19, 2017

https://www.lewrockwell.com/2017/04/tyler-durden/taxation-is-theft-2/

But it gets worse, as Andrew Napolitano writes via The Mises Institute; with a tax code that exceeds 72,000 pages in length and consumes more than six billion person hours per year to determine taxpayers’ taxable income, with an IRS that has become a feared law unto itself, and with a government that continues to extract more wealth from every taxpaying American every year, is it any wonder that April 15th is a day of dread in America?

Here’s an example you’ve heard before. You’re sitting at home at night, and there’s a knock at the door. You open the door, and a guy with a gun pointed at you says: “Give me your money. I want to give it away to the less fortunate.” You think he’s dangerous and crazy, so you call the police. Then you find out he is the police, there to collect your taxes.

Read the rest of this entry »

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