Do we still need/want the IRS? (Corporate Profits, unemployment, Congress)
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The roots of IRS go back to the Civil War when President Lincoln and Congress, in 1862, created the position of commissioner of Internal Revenue and enacted an income tax to pay war expenses. The income tax was repealed 10 years later. Congress revived the income tax in 1894, but the Supreme Court ruled it unconstitutional the following year.16th Amendment
In 1913, Wyoming ratified the 16 Amendment, providing the three-quarter majority of states necessary to amend the Constitution. The 16 Amendment gave Congress the authority to enact an income tax. That same year, the first Form 1040 appeared after Congress levied a 1 percent tax on net personal incomes above $3,000 with a 6 percent surtax on incomes of more than $500,000.
In 1918, during World War I, the top rate of the income tax rose to 77 percent to help finance the war effort. It dropped sharply in the post-war years, down to 24 percent in 1929, and rose again during the Depression. During World War II, Congress introduced payroll withholding and quarterly tax payments. https://www.irs.gov/uac/Brief-History-of-IRS
I have posted the pros & cons of the IRS. Would like to know what others feel about having them around & why. OR why not. Can the IRS be fixed?
Your link does not address the pros and cons to the IRS; it is a screed against an income tax, period. So, do you wish to debate the necessity of the income tax? Or maybe debate which type of tax (income, consumption, etc.) should be used to fund the government? Or what functions the government should be funding?
Only after it is agreed that incomes should be taxed is it relevant to debate the pros and cons of the IRS (which is, after all, the agency charged with collecting the income tax and enforcing our tax law).
The best way to fix the IRS is to fix the tax code that the agency is tasked with implementing and enforcing. Our current tax code is a monstrosity, concocted to serve the needs of various lobbyists and advance the social-justice ideals of those in power. It has little to do with a fair mechanism of raising revenue to support governmental operations.
The tax code should be completely abolished and a new one put in its place, one that severely limits deductions to just the bare necessities of life: food, shelter, and clothing. And I would keep the child deduction, because it is in society's paramount interest to perpetuate itself. Then, tax everything else at a flat rate. (This is not "unfair" as some would charge, because the poor spend a proportionately greater amount of their income on the necessities, and thus a greater share of their income would be deductible.)
If this were done, the IRS would have far less leeway for mischief than it does now, and many of our tax-related problems would be solved.
EDIT to add, I may well be inclined to maintain the charitable deduction as well, because charities perform an important social function that, in their absence, would probably be taken on by the government, at greater cost and less efficiency. So I see the charitable deduction as a way to keep the size of government smaller than it otherwise would be.
Last edited by bus man; 02-11-2016 at 11:16 AM..
Reason: add comment about charities
The best way to fix the IRS is to fix the tax code that the agency is tasked with implementing and enforcing. Our current tax code is a monstrosity, concocted to serve the needs of various lobbyists and advance the social-justice ideals of those in power. It has little to do with a fair mechanism of raising revenue to support governmental operations.
The tax code should be completely abolished and a new one put in its place, one that severely limits deductions to just the bare necessities of life: food, shelter, and clothing. And I would keep the child deduction, because it is in society's paramount interest to perpetuate itself. Then, tax everything else at a flat rate. (This is not "unfair" as some would charge, because the poor spend a proportionately greater amount of their income on the necessities, and thus a greater share of their income would be deductible.)
If this were done, the IRS would have far less leeway for mischief than it does now, and many of our tax-related problems would be solved.
EDIT to add, I may well be inclined to maintain the charitable deduction as well, because charities perform an important social function that, in their absence, would probably be taken on by the government, at greater cost and less efficiency. So I see the charitable deduction as a way to keep the size of government smaller than it otherwise would be.
While not a bad approach, I think the challenge(and challenges are what got us to where we are today) lies with defining necessities.
For example, food is a necessity, but should lobster and steak be treated as a necessity or a luxury, and does it matter if you eat the food at home or at a restaurant? A home is a necessity, but is a 13 bedroom house a necessity? A shirt is a necessity, but is the latest pair of high end shoes? You get the point, even items from the essential category can become luxuries, and while my examples were relatively black & white, there's a lot of products in between that are uncertain.
You also have arguments for additions to the necessity list. You could easily make the case that a source of income is essential for life too, since without a job, you can't get any of the thing you need. So wouldn't that make anything essential to having a job also a necessity? Things like education costs, transportation costs, and the internet also come into play.
You've also then got the additions of medication and other medical expenses, however then you have to try and determine what's nice to have vs essential. Insulin seems like a good essential example, but what about a weight loss procedure. Could save your life, could be called cosmetic.
I don't list all these things out to attack your idea in particular, rather to point out why the tax code is the way it is. Everything is specified because if it's not, things get uncertain and uncertainty means one person gets ripped off because they paid taxes they didn't have to, while another person doesn't pay taxes they owe.
And at the end of the day, when those problems come up, an agency is required to be able to settle those disputes and track anyone not playing by the rules. Hence, the IRS(or an equivalent) is needed.
SOME services in a Nation are necessary and must be handled by a governmental body, those services cost money, that money must be raised, someone must ensure that the laws governing how those funds are raised are adhered to, that someone is currently the IRS.
Rousseau: "Man was born free, and he is everywhere in chains"
Unfortunately, the invisible bond of the Social Contract that we humans possess on a genetic level will always force us into a relationship with money and government.
The fairness of the process is what needs to be regulated or as history has shown, the few end up having the majority of the money.
Now, it's become painfully obvious to the taxpayers and our government that our thousands of pages of tax code aren't written for the majority of the people but to have the majority of the money go to the minority of the people.
The new normal isn't better then the old normal was.
Considering that it looks like they are used to harass individuals by certain other individuals, make trouble for someone and get audited, I think it is time they go. Now, people working in those jobs have GOOD jobs and they'll be a fight to save those jobs and that is the problem with a lot of stuff that just needs to go.
I think the system as it is has outlived itself. It is nothing but a mess. I would agree with more of a flat tax type system. As we know, our current system is pitiful unless you are wealthy or have the power to order one of those audits for an enemy.
I pay my taxes, always have, I think we have a lot of people who are feeling the need for a more perfect world and see the abolition of taxes as a logical first step. Similar to the notion that all government expenditures can be free from fraudulent claims is the thinking that government is somehow the base problem and if we just tweaked it a tad bit we'd see the rising of that more perfect world.
The "tax problem" seems to lie in the fact of so many people coming to believe in this overhaul of everything that annoys them. Taxes, welfare, social security, section eight housing, unemployment insurance, and now, the BLM and the FBI. All of these constructs are coming to the fore of citizen complaints, either they don't want any of these entities to exist or at the least, severely restrained.
The flat tax notions came about as a ploy to circumvent the taxes levied on investment returns, as most of the flat tax proponents are only advocating taxes for "earned income" and not any capital gains taxes. Malcolm Forbes of all people was in favor of a tax system overhaul, surprise, surprise, he was advocating for the flat rate. When billionaires tell you they've got a better tax mousetrap you'd better be holding tight to your wallet. Ronald Reagan, another champion of the (rich) people spoke to Americans about "getting government off your back," of course he was talking over the heads of the working class to those who bought his presidency, and sought to make their lives richer by lowering their taxes.
Speaking of taxes as something that the abolition of the IRS will fix is also being a bit disingenuous, states, counties, cities, all have their own tax systems that bring just as much grief to those who find all taxes to be something not easily tolerated. And here we arrive at the real crux of the entire tax question, most people just don't think they should be taxed in any way that allows others to benefit form their contributions, the social nature of taxation is what brings them to the anger and frustration with taxes in general.
In the meantime, I'll be paying my share as always, and so will others despite their disapproval of the system. One reason that we will not see much of a change in the federal tax code is that the vast majority of all that government expenditures occurs as a benefit to corporate profits and that in turn means jobs. Follow the money..That's how you can see the spread of benefit.
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