Taxes

Grover Norquist: The Future Looks Libertarian

in Economic Liberty, Liberator Online Archives, Taxes by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 16 of the Liberator Online. Subscribe here!)

One of America’s most influential Republican leaders says that libertarians are winning big victories, creating new coalitions, and seem to be the wave of the future.

Grover Norquist: The Future Looks LibertarianGrover Norquist is the founder and president of Americans for Tax Reform (ATR). His article “Beyond Rand Paul: The Libertarians Are Coming” at OZY.com begins this way:

“They’re no longer on the fringes. The libertarians are now officially mainstream. Proof? The New York Times Magazine [in its August article " Has the ‘Libertarian Moment’ Finally Arrived?"] cites the popularity of Republican Sen. Rand Paul and opposition to American ‘boots on the ground’ in Syria and Iraq.

“But it’s much more than a moment. It’s the culmination of a powerful narrative building over the past 30 years in American politics. This is a movement — and it doesn’t live or die on the shoulders of one policy or one individual.

“What is notable is that regardless of whether an issue originates from the right or left, the side able to grab the mantle of liberty has advanced against all odds.

“So forget ‘moment.’ Think trend. And consider the once-impossible political shifts that have taken place over the past 30 years. The relevant dividing line is not right versus left or Republican versus Democrat but the expansion of individual liberty versus whatever and whosoever stands in the way.”

Norquist gives four examples of major libertarian policy shifts in recent years: support for freedom of choice in education, gay rights, marijuana legalization, and the right to keep and bear arms.

Concludes Norquist:

“These four radical, unthinkable expansions of individual liberty are not liberal or conservative, Republican or Democrat. All flow from the small ‘l’ libertarian, live and let live, leave us alone, ‘laissez-nous faire’ attitude. Four movements calling for increased individual liberty while their opponents explained — with hundreds if not thousands of years of tradition and history to back them up — that society should have the power to control behavior for the public good.

“One can see other issues that follow this trend. Uber against the taxi regulators. Airbnb. Lyft. Bet and invest on the side advancing liberty.

“A libertarian moment? No. A trend. A long-term trend with no obvious roadblock in sight.”

Libertarian Candidates Pledge: Abolish the Income Tax

in Drugs, Economic Liberty, Elections and Politics, Liberator Online Archives, Libertarian Party, Libertarian Stances on Issues, Libertarianism, Military, Taxes by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 15 of the Liberator Online. Subscribe here!)

Scores of Libertarian Party candidates for federal office have pledged to downsize the Abolish The IRSbloated federal government — in these big and specific ways:

  • Eliminate the federal income tax
  • End the War on Drugs
  • Abolish the NSA
  • Cut military spending by 60%

We’ll be examining those pledges in detail below and in the next few issues, because they show that these bold-sounding proposals are not only possible, but practical and beneficial. (Of course, you can jump ahead and read about all four positions right now.)

First, eliminating the hated federal income tax. The candidates pledge: “If elected, I will sponsor legislation to eliminate the federal income tax, cut federal spending to the 1998 level ($1.65 trillion), and get the IRS off the backs of taxpayers.”

(Yes, that’s right: government has grown so rapidly in recent times that if you cut spending to 1998 levels — the Clinton era of huge government — you could eliminate the federal income tax.)

Here are the benefits of eliminating the income tax, according to the Libertarians:

  • Immediately balances the budget — without raising taxes.
  • Gives back, on average, $11,525 to each American family — every year — that they can invest, save, spend, or give away as they see fit.
  • Pours $1.4 trillion into the productive, private-sector economy, stimulating massive investment in small businesses and creating tens of millions of new private-sector jobs.
  • Stops the devaluation of the dollar and stabilizes prices, preserving American wealth.
  • Forces politicians to eliminate destructive federal programs, regulations, and bureaucracies that do more harm than good. Examples include: stifling business regulations, the prohibition of marijuana, unnecessary foreign wars, and thousands of frivolous projects best left to the private sector (e.g., promoting the Hawaiian Chocolate Festival).
  • Creates a boom in charitable giving. Trillions of dollars back in the hands of American taxpayers enables them to take care of others in need through their churches and private charities, and by giving directly to help friends, family, and community members in need.
  • Eliminates wasteful bookkeeping needed to comply with IRS tax filings and audits, saving Americans 6 billion hours of their precious time and up to $378 billion in accounting costs — every year.
  • Aborts the Democrats’ and Republicans’ plan to add another $5 trillion over the next eight years to the already perilously high $17 trillion federal government debt, sparing future generations from footing a bill they played no part in creating.
  • Frees up billions of dollars for Americans to spend on music, entertainment, crafts, and the arts, enabling talented individuals — now unemployed or working in jobs they don’t like — to do what they love for a living.
  • Forces politicians to eliminate government waste.
  • Stops the growth in the interest due on the federal debt, now at $237 billion per year. This will help minimize this expense if interest rates ever rise, which is likely.
  • Restores America’s reputation as the envy of the world, demonstrating that the American experiment of free, unfettered trade creates prosperity and alleviates poverty. This sets an example for poor countries, helping them rise from hardship to abundance.

 

Click here to read the next article from this issue.

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VIDEO: Remy’s “What are the Chances? (An IRS Love Song)”

in Liberator Online Archives, Taxes by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 12 of the Liberator Online. Subscribe here!)

A new video by the great liberty-minded comic Remy is always a cause for celebration.

Here’s his latest: “What are the Chances? (An IRS Love Song)“.

Remy, decked out handsomely in country music duds, croons a country-flavored ode to the IRS scandal concerning alleged unjust and biased targeting of conservative and free market organizations — and the suspiciously convenient IRS hard-drive crashes and loss of electronic correspondence relevant to the case. Remy’s expressions and voice in the last 30 seconds or so are particularly hilarious.

It’s about two minutes long. Written and performed by Remy, via ReasonTV.

Watch, laugh… then share with friends.

Cost of Government Day: July 6

in Economic Liberty, Liberator Online Archives, Taxes by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 10 of the Liberator Online. Subscribe here!)

While Americans celebrated Independence Day on July 4, we are far from being able to celebrate fiscal independence.

Indeed, according to Americans for Tax Reform (ATR), this year Cost of Government Day fell on… July 6. Ouch!

Cost of Government Day — calculated each year by ATR — marks the point during the year when the average American has finally earned enough income to pay for his or her share of the spending and regulatory burdens imposed by government at the federal, state and local levels.

2014 is the sixth consecutive year that Cost of Government Day arrived in July; prior to President Obama taking office, Cost of Government Day had never fallen after June 27.

All told, the full costs of government amount to a staggering 51 percent of GDP. Workers toil 121 days to pay for government spending alone, and 65 days to pay for regulatory costs. Americans labor in tax slavery 186 days — more than half the year — to pay off the full burden of government.

Some states like Connecticut and New Jersey must work even longer than that to pay for the costs of high spending and taxes in their states. The latest state Cost of Government Day once again occurs in Connecticut, falling on July 26 for 2014. The earliest Cost of Government Day goes to Louisiana, occurring on June 12 this year.

The days worked to pay for federal spending decreased since last year. However, federal regulatory costs have increased since 2013. While Americans worked 65 days to pay for the costs imposed by regulation in 2014, if the regulatory regime grows larger it will almost certainly mean much later Cost of Government Days in the future.

Making the Case for Ending the Income Tax

in Communicating Liberty, Taxes by Sharon Harris Comments are off

Ending the personal income tax would be a great blessing for America. And it would achieve many libertarian goals in one single swoop.

However, to most Americans — even those who hate the income tax — the idea currently seems unrealistic and breathtakingly radical.

Can we persuade others to accept this idea — and eventually propel it into the mainstream political discussion?

Libertarians are already doing this with many issues, including drug re-legalization, ending the Federal Reserve, privatization, a non-interventionist and many more.

Why shouldn’t we add ending the personal income tax to that list? The potential pay-off is incredible.

Here are some ways to present this bold libertarian idea as sensible, desirable and realistic.

ONE: Use the popularity of Ron Paul. If you’re discussing this issue with a Ron Paul admirer and there are millions of them then the battle is already at least half won. Just tell the person that Paul has long supported ending the personal income tax, and several times he has introduced legislation, the Liberty Amendment, to do this, most recently on April 30, 2009.

In fact, even if your listener isn’t a Ron Paul fan, the mere fact that legislation has been introduced in Congress to end the personal income tax will make the idea seem more real, more possible.

TWO: If appropriate, explain your position with dramatic language along these lines:

“I want to end the income tax — and replace it with… nothing.”

This makes it clear that you’re calling for bold change, not just a reshuffling of the status quo. This is powerful and provocative phrasing. The pause, then the unexpected “nothing” at the end surprises your listener — and makes him eager to hear what you’ll say next.

THREE: The natural question you’ll be asked is: “But how will we fund the government without the income tax? How can we fund essential services?”

Happily, there’s a great and persuasive answer. On November 20, 2008 Ron Paul said in a New York Times interview:

“About 45 percent of all federal revenue comes from the personal income tax. That means that about 55 percent — over half of all revenue — comes from other sources, like excise taxes, fees, and corporate taxes.

“We could eliminate the income tax, replace it with nothing, and still fund the same level of big government we had in the late 1990s. We don’t need to ‘replace’ the income tax at all.

That is remarkable and eye-opening: to think that we could adapt a budget from roughly ten years ago (or, more precisely, cut spending back to the still extremely high levels of just ten years ago) — and no longer be plagued by the personal income tax.

You’ll want to update the numbers, if possible, or at least qualify the statement by saying something to the effect of In 2008, Ron Paul pointed out

FOUR: Having made this striking point, you can de-radicalize the issue by adding: “So perhaps this idea isn’t so radical after all.”

FIVE: Strengthen point number three by adding something along these lines: “By the way, in the late 1990s, when Bill Clinton was president, I don’t remember many people complaining that government wasn’t big enough, or complaining we had too little government.”

Ask your listener if he would be willing to reduce the federal government to the size it was in the last years of the Clinton administration — if it meant we could abolish outright the personal income tax.

Many people will respond by saying that we need more reduction than that. Congratulations — you’ve just turned a radical-sounding idea into something that doesn’t sound radical enough!

SIX: Now it’s time to make the point that history is on your side. Tell your listener that America didn’t have an income tax until well into the 20th century — and without an income tax we quickly rose from a struggling ex-colony to become the most abundant nation in history.

Ron Paul, who has done more than any other elected official to advance this issue, made this point beautifully in 2001. Use his language to shape your own response:

“Could America exist without an income tax? The idea seems radical, yet in truth America did just fine without a federal income tax for the first 126 years of its history. Prior to 1913, the government operated with revenues raised through tariffs, excise taxes, and property taxes, without ever touching a worker’s paycheck.”

SEVEN: You may be asked: “But what about the Fair Tax (or the Flat Tax, or some other income tax reform plan)?”

Ron Paul provides a friendly and supportive response to this question. From the New York Times, Nov. 20, 2008:

“I see a consumption tax as being a little better than the personal income tax, and I would vote for the Fair Tax if it came up in the House of Representatives, but it is not my goal. We can do better. … We could eliminate the income tax, replace it with nothing, and still fund the same level of big government we had in the late 1990s. We don’t need to ‘replace’ the income tax at all.”

You can also point out that it is hard work to build support for any form of bold tax reform, including the Flat Tax and Fair Tax. We may get just one shot at major tax reform in our lifetimes. So why not put our effort into building a movement for change that would dramatically limit government and increase freedom? As the old saying goes, if you don’t ask for what you really want, you’ll never get it; but if you do ask, you might just get it all.

EIGHT: Make the benefits of abolition come alive for your listeners! Do what every good salesperson — and political persuader — must do: sell the benefits of the idea.

Help your listeners feel the desirability of income tax abolition. Make them feel in their pockets the extra money that would be theirs. Help them envision spending it. Create for them a vivid mental picture of what they would do, and how they would feel, when freed of the awful burden of the personal income tax. Help them see the better America that would emerge from this change. Make the dream come alive!

No one was better at doing this than the late Harry Browne, two-time Libertarian Party presidential candidate and one of the best libertarian communicators of all time.

Here is how Browne presented this:

“Imagine what would happen if we repealed all forms of federal income tax — including the personal income tax, the corporate income tax, Social Security, the estate tax, and the gift tax. A world of benefits would quickly come in the wake of repealing these taxes.

“The first benefit is the most obvious: all the money you’re paying in income taxes will be yours — to spend, to save, to give away as you see fit, not as the politicians think is best for you…

“When we repeal the income tax, all that you pay now in income and Social Security taxes will be yours at last — to do with as you see fit.

“If yours is the average American family, that means over $10,000 dollars a year that’s been going to the politicians that will stay in your hands.

“Every dollar you earn will be yours — to spend, to save, to give away as you see fit…

“So what will you do with that money when they no longer take it away from you?

“Will you put your children in private schools — where you could get exactly the kind of education you believe best for them? …

“Will you start that business you’ve always dreamed of?

*Will you move into a better neighborhood, take your family on a better vacation, arrange a much more comfortable and much more secure retirement?

“Will you help your church or your favorite cause or charity in a way you’ve never been able to do before?

“What will you do with that money?

“At last, it will all be yours — and the government will no longer have a claim on it.” …

“There will be a similar increase in take-home pay for everyone you do business with — your customers or your employer — meaning that people will have more money to spend on what you have to offer.

“A similar increase in take-home pay will occur throughout America, unleashing the biggest boost in prosperity that America has ever seen. There will be a job for everyone who can work and charity for everyone who can’t.

“Your life will be your own again: an end to government snooping into your finances, an end to keeping books for the IRS, an end to fear of an audit, an end to rearranging your financial life to minimize your tax burden.”

Wow! Harry really gives flesh and bones to this abstract political idea.

Notice, too, that he doesn’t just appeal to narrow self-interest. He realizes that many people want to keep more of their own money so they can help others — by giving to churches and charities, improving education, and so forth.

That excerpt is from Harry’s great 2003 article “Freedom from the Income Tax.” You can read the entire article here.

Use this example to create your own way to make your listeners feel, at a deep emotional level, the benefits of being completely free from the income tax.

NINE: Know your audience so you can show them specifically how ending the income tax will make a big difference on the issues most important to them.

Are they concerned about poverty and joblessness? Ending the income tax will put hundreds of billions of dollars every year back into the hands of those who earn it. It will dramatically stimulate economic growth. It will unleash, as Harry Browne said, “the biggest boost in prosperity that America has ever seen. There will be a job for everyone who can work and charity for everyone who can’t.”

Are your listeners concerned about education and strong families? Without the burden of an income tax, private education will flourish. Parents will be able to afford the education they think best for their children. Families where both parents are now forced to work fulltime will be able to afford, if they wish, to let one parent stay home and devote their time to their children. Nothing will do more to strengthen family values than ending the income tax.

Are they concerned about intrusive Big Government? Ending the income tax will limit government power and force government to act with far more restraint and responsibility.

Whatever the issue, ending the income tax will benefit them. Help them see this.

TEN: Point out to your liberty-minded friends that ending the income tax will win numerous victories for limited-government advocates — at once. Currently freedom activists must address so many issues. But the abolition of the personal income tax would win many of these victories in a single stroke!

This is a powerful argument that supporters of the Liberty Amendment have made for years. For examples of how the Liberty Amendment would dramatically shrink government in many ways at once, see this article.

ELEVEN: Some will say that such dramatic reform is impossible, that it is simply too big a change to hope for. One way you can address this is point out specific, concrete examples of enormous political change that happened quickly.

Examples: It became illegal to sell liquor in 1920 — a gigantic change in American life. Further, that seemingly permanent law was repealed just as dramatically in 1932, after the failures of Prohibition became obvious. Women secured the right to vote in America in 1920 — after nearly a century and a half of being denied this. The Berlin Wall, once seemingly as permanent as the Great Pyramids, fell suddenly in a matter of days in 1989. Government-imposed segregation in the South was halted after being the norm for a century.

Have examples like this at your fingertips. They can help your listener see, understand — and most importantly, feel — that bold libertarian change like abolishing the income tax is indeed possible.

When enough Americans understand the case for ending the income tax, and demand it be done, it will disappear. Help them see, understand, and feel this. Its hard to think of much else that could so quickly and dramatically benefit our country and the world.

Resources:

Read Ron Paul’s comments on introducing the Liberty Amendment:

Read the wording of the Liberty Amendment.

Do Libertarians Support a National Sales Tax?

in Communicating Liberty, Liberator Online Archives, Libertarian Answers on Issues, Libertarian Stances on Issues, Taxes by Mary Ruwart Comments are off

(From the Ask Dr. Ruwart section in Volume 19, No. 7 of the Liberator Online. Subscribe here!)

Question: I have read about proposals to eliminate the income tax and replace it Collect Taxwith a consumption tax (national sales tax). This seems like a very good idea. First, it would mean foreign manufacturers would pay almost the same tax as domestic ones. Second. it would remove the need for large accounting and legal departments in corporations, and would certainly simplify the paperwork of small businesses. Third, it would eliminate the ability of the wealthy to utilize loopholes in the present tax system. There are many more benefits I can see, and I can’t see a downside. Am I missing something? Do libertarians support this idea?

My Short Answer: Libertarians recognize that taxation of any kind is theft and therefore do not support taxation. However, some dedicated libertarians have been working to replace the income tax with a consumption tax, like the one you’ve outlined.

Among other things, they believe that people would feel the bite much more if everything they bought came with a double-digit sales tax. Tax increases would be more visible — and more unpopular for politicians to propose. The abuses perpetrated by the IRS would also end. Public support for abolishing taxes altogether would increase.

However, one danger many libertarians see in proposing this switch is the possibility that we would end up with a national sales tax AND an income tax.

Why not simply get rid of the income tax and replace it with nothing, as libertarian presidential candidates like Ron Paul and Harry Browne have proposed?

As Ron Paul told the New York Times in 2008: “I see a consumption tax as being a little better than the personal income tax, and I would vote for the Fair Tax if it came up in the House of Representatives, but it is not my goal. We can do better. … We could eliminate the income tax, replace it with nothing, and still fund the same level of big government we had in the late 1990s. We don’t need to ‘replace’ the income tax at all.”

Ron Paul is right. If all we did was to restrict government to its constitutional limits, we could provide for defense and other necessary functions with constitutionally-permitted excise taxes.

Then, libertarians could start working on getting rid of those, too!

LEARN MORE: Suggestions for further reading on this topic, pro and con, from Liberator Online editor James W. Harris:

Fairtax.org is the website of Americans For Fair Taxation, a non-profit organization that argues for the Fair Tax. Their site includes an extensive FAQ that answers common questions about the proposal.

* “There Is No Such Thing as a Fair Tax“ by Laurence M. Vance, Mises Daily, December 12, 2005. Vance says advocates of the Fair Tax are right on the evils of the income tax, but the Fair Tax isn’t the solution. He lists 17 problems with the Fair Tax from a libertarian perspective.

* “Against the FairTax Proposal“ by Jim Cox, LewRockwell.com, March 29, 2005. Additional criticisms of the Fair Tax from the author of The Concise Guide to EconomicsMinimum Wage Maximum Damage, and The Haiku Economist, the latter two published by the Advocates.

* * * * * * * * * *
Short Answers to the Tough QuestionsGot questions?  Dr. Ruwart has answers! If you’d like answers to YOUR tough questions on libertarian issues, email Dr. Ruwart

Due to volume, Dr. Ruwart can’t personally acknowledge all emails. But we’ll run the best questions and answers in upcoming issues.

Dr. Ruwart’s previous Liberator Online answers are archived in searchable form.

Dr. Ruwart’s latest book Short Answers to the Tough Questions, Expanded Edition is available from the Advocates, as is her acclaimed classic Healing Our World.

Worse and Worse: 101 Years of the Federal Income Tax

in Economic Liberty, Liberator Online Archives, Taxes by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 7 of the Liberator Online. Subscribe here!)

“The American income tax is perhaps the most dramatic example of how government grows at the expense of liberty,” said Grover Norquist, president of Americans for Tax Reform (ATR), last week. “Slowly. Constantly. Inexorably.”

Indeed, the 101-year history of the federal income tax has been marked by more and more taxpayers paying higher and higher amounts of tax, accompanied by ever-increasing complexity and confusion, as this chart from ATR shows:

101 Years of the Income Tax

And that’s just the start. Consider the incredible burden and costs of compliance. According to the National Taxpayers Union (NTU)

  • The total time burden of tax compliance totals an astounding 6.1 billion hours this year.
  • That is the equivalent of about 3.05 million employees working 40-hour weeks year-round with just two weeks off; or more than the number of workers at three of the biggest retailers in the Fortune 500 — Wal-Mart Stores, McDonald’s, and Target — combined.
  • When calculated at the average hourly employee compensation cost, the value of the labor involved in tax compliance is a jaw-dropping $192.6 billion.
  • Individuals spend a combined $31.7 billion a year on tax software and other out-of-pocket costs related to tax compliance.

NTU thus estimates the total compliance burden of the income tax is a horrific $224.3 billion. And that does NOT include “numerous hours taxpayers spend on state and local taxes, pursuing tax minimization strategies, or responding to IRS notices and audits; nor do they include the huge ‘growth penalty’ imposed on the nation’s economy by high tax rates.”

Then there are the numerous severe civil liberty problems with the income tax. “Ten Ways the Income Tax Harms Civil Liberties,” a short commentary by the Cato Institute’s Chris Edwards, summarizes some of them.

If you’re tired of this madness, why not start convincing your family, friends, neighbors and community leaders that it’s time to end the hated income tax — and replace it with… nothing.

Yes, it’s both fiscally and politically possible, as Ron Paul, Harry Browne, and many others have pointed out. In this article Advocates President Sharon Harris offers some some background info and suggestions to help you make that argument persuasively and effectively.

Can We Abolish the Income Tax?

in Economic Liberty, Liberator Online Archives, Taxes by Sharon Harris Comments are off

(From the President’s Corner section in Volume 19, No. 7 of the Liberator Online. Subscribe here!)

In this issue‘s Intellectual Ammunition section you will find some truly shocking facts about the federal income tax.

It’s enough to make you mad — and, I hope, ready to do something about it.

In recent years libertarian arguments in many areas have made remarkable Abolish the IRSprogress. The re-legalization of marijuana and other drugs has moved from a theoretical possibility to legislative reality. We’ve seen the elimination of centuries-old anti-gay laws. In foreign policy, the ideas of non-intervention are catching on so fast it’s scaring the political establishment. And the idea of libertarianism itself has gone from being an obscure, little-understood political philosophy to being the hottest idea in politics today.

None of this happened by accident. It came about because libertarians and others who favored liberty on these issues spent years challenging the status quo, opening minds, and bringing the libertarian position into public debate.

I think it’s high time we added abolishing the income tax to that list.

A few years ago I wrote a series of articles on how to argue for eliminating the income tax and replacing it with nothing.

I’ve combined those into one article, which you can read here. I hope it helps you in the crucial work of pushing the “abolish the income tax and replace it with… nothing” meme into mainstream American politics.

In my Liberty Minute column in this issue, I discuss the concept of the Overton Window, a very useful model for advancing the ideas of liberty. One of our major goals as liberty advocates is to raise the Overton Window to include ever-bolder libertarian ideas.

Can we do this with the idea of ending the income tax? Can we make that a part of the national political debate? You bet we can. It’s what Hollywood describes as “high concept”: it makes sense, it is exciting, and it is easy to grasp. Ron Paul’s longtime support for this issue is another big benefit. Paul’s millions of influential and active followers have the manpower to bring this idea alive for the mainstream.

Perhaps, not so long from now, the income tax will go the way of censorship, sodomy laws, Jim Crow, and other discredited and vanished tyrannies liberty lovers have sent into oblivion.