This is my opinion on taxes -- probably not the popular opinion on here but to me more reality based.
Taxes are the foundation of a functioning society, funding essential infrastructure and services—roads, utilities, defense, education, and countless other public goods. While the debate over taxation is often polarized, one thing is clear: eliminating one form of tax will inevitably lead to increases elsewhere.
For example:
- If income tax were abolished, sales or property taxes would need to rise to compensate, shifting the financial burden in ways that may not be equitable.
- Sales taxes are inherently regressive, disproportionately affecting lower-income individuals who spend a greater percentage of their earnings on necessities.
- Property taxes are somewhat more neutral but can still be regressive if home values do not align with an owner’s ability to pay.
- Flat income taxes disproportionately impact lower-income earners unless significant exemptions—such as exempting the first $80,000 of income—are introduced. Without such measures, the burden of taxation falls largely on the middle class.
A More Fair Tax System
If true fairness were the goal, taxation should be:
On all income sources – wages, investments, dividends, capital gains, and any other earnings.
Without deductions or loopholes – ensuring everyone pays their fair share.
One of the biggest loopholes benefiting the wealthy is the ability to:
- Use owned assets as collateral to borrow money, allowing them to live virtually tax-free.
- Upon their death, their assets receive a stepped-up basis, meaning that their property value increase over a lifetime goes untaxed if sold.
Eliminating this loophole would be a major step toward a more equitable tax system.
Government Inefficiencies and Waste
Government waste is a legitimate concern. First-hand experience in the military revealed shocking inefficiencies:
- Basic supplies—bolts, screws, and nuts—purchased at 10x their retail price due to bureaucratic procurement processes.
- Justification? MIL-SPEC standards requiring excessive testing and certification, even for items that didn’t need it.
- A hammer, for example, should simply be a hammer—meeting reasonable material and durability standards.
A better approach?
- Allow bulk purchasing based on common specifications.
- Conduct random sample testing instead of excessive certifications.
- Reform government procurement to eliminate excessive bid requirements that drive up costs and allow for corruption.
Federal vs. Local Tax Collection and Spending
A fundamental economic principle:
- The federal government is the most efficient entity for collecting taxes.
- Local governments are the most efficient at spending tax revenue.
Example:
Federal Highway System
- Northeastern states pay far more into the federal highway fund than they receive.
- Rural states like Texas, Arizona, and Nevada receive more funding than they contribute to maintain vast highway networks.
- While this redistribution is necessary, it highlights inefficiencies in centralized tax allocation.
How Do We Fund National Defense Without Taxes?
If not through taxation, how do we:
- Fund the military?
- Protect against external threats?
Historically, the U.S. initially operated
without income tax, relying on state-collected
property taxes—a system that aligned with the era when only landowners had voting rights. However, during
World War II, federal
personal income tax was introduced to finance the war effort, though the
first federal income tax actually began during the Civil War in 1861 and was later codified with the 16th Amendment in 1913.
Even President
Dwight D. Eisenhower warned against unchecked military spending, stating:
Structural Reforms for Fair Governance
If fairness in governance were truly the goal, several reforms should be implemented:
1. Term Limits for Elected Officials
- Senators: Maximum six 2-year terms.
- House Representatives: Maximum three 6-year terms.
- Judiciary: Maximum 20-year terms, with the option to reapply for reappointment.
2. Campaign Finance Reform
- PACs and lobbyists should be barred from direct campaign contributions.
- Instead, all campaign funding should come from a single, publicly managed fund, allocated equally based on qualifying support levels—ensuring a level playing field.
3. Outlaw Gerrymandering
The most fair districting system would involve:
- A nonpartisan committee of 12, composed of:
- 4 members from each major party
- 4 randomly selected citizens
- This would ensure fair, unbiased representation, preventing manipulation for political advantage.