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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.

 

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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.

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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.