Soon to be President Barack Obama has a plan that involves how much of your money the government will take away, by force if necessary. Some people won’t pay anything. Some people will pay a lot. The plan, like those that have come before it – the only constant being that tax rates have grown vastly since World War I – is based not on common sense or fairness, but on economic voodoo.
Senator Barack Obama declared recently that he wants to “reform our tax code so that it rewards work and not just wealth.” We think that is a great goal if it means a simple tax system with low marginal tax rates. Unfortunately, a close inspection of Obama’s proposals reveals something disquieting: he would raise marginal tax rates for many middle-income taxpayers, a bad move for anyone seeking to promote economic growth.
Although Obama is offering a new series of tax breaks, they undermine rather than improve economic incentives. First, whether or not you get those breaks will depend on your income. In Washington, taking away tax breaks as families work harder to make more money is called a “phase-out.” Economists have a different name for it—we call it a tax. Reducing a person’s tax credit as his income goes up also reduces his incentive to earn more income.
The keys to our current tax system are manifold. Although touted as voluntary, our tax system is based on force. If you don’t pay whatever the government determines you should pay then force comes into play. First you are threatened. Then your wages are garnished. If you continue to try and avoid paying whatever “fair share” the bureaucrats say you owe the rest of the country, you’ll end up in jail, with all your real property forfeit to the Fed. If you ask questions about the laws that entitle the government to seize however much of your money it wants, you’ll soon find yourself surrounded by armed goons.
Just ask Edward and Elaine Brown of New Hampshire. You’ll have to visit them in jail to do so. The couple is currently sentenced to 63 months in federal pound me in the ass prison for refusing to participate in the “voluntary” tax system because the government wouldn’t answer their tax questions honestly.
The law they were accused of violating was the personal income tax law and the Browns asked to see the law before they handed over any more money. Their quest for proof of the existence of such a law began over 10 years ago when they first found out the income tax was being misapplied to include taxing all Americans labor. Once the browns realized they, along with the rest of us, were being defrauded of our hard worked labor by the irs they decided to make a stand and challenge the government, not only for themselves, but for the rest of the people in this country, so that they also will be made aware of the terrible injustice being carried out on each of us every day.
You may agree or disagree with the Browns methodology. That’s your right. However, I would strongly encourage you to take a few moments to understand how the upcoming Obama presidency is likely to affect your pocketbook.
While Obama has publicly embraced a tax rate of 40 percent for couples earning over $350,000, his tax policies would result in a staggering 45 percent effective marginal rate in the $110,000 to $120,000 income range for this family. That is 11 percentage points higher than under current law.
Here’s a graph:
Bear in mind that if you ask to see the current tax law, no one will be able to show you anything that a) is Constitutional or b) vaguely resembles a coherent, interpretable English document. The current federal tax code is purposely obtuse and also completely against the highest law of the land, the United States Constitution. At least, that is my opinion.
One question I’ve always asked those who feel it is OK for the federal government to skim money off of every paycheck I’ve ever earned is: if God himself only requires 10% why is it OK for people I’ve never met to take more than that? No one has ever given me an answer that made any sense.
Fighting the tax man may be difficult and dangerous, but it is also a moral imperative. I have the audacity of hope on my side.