Tag Archives: tax code

Business, Civil Liberties, Economy, Election, Featured, Government Accountability, Government Corruption, Politics, US

Rand Paul To Unveil Plan To Replace IRS Tax Code With ‘Fair and Flat Tax’

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GOP presidential candidate Sen. Rand Paul (R-Ky.) announced that he will release a plan to repeal the entire IRS tax code, making more than $2 trillion in tax cuts and replacing the code with “The Fair and Flat Tax” of 14.5 percent on individuals and businesses.

In an editorial for the Wall Street Journal, Paul claimed that his plan will repeal the more than 70,000 pages that make up the Internal Revenue Service’s tax code and “eliminate nearly every special-interest loophole.”

Paul wrote that although President Obama has talked about “middle-class economics,” his policies have “led to rising income inequality and negative income gains for families.” In contrast, Paul proposes that his plan would help the middle class by eliminating “the payroll tax on workers and several federal taxes outright, including gift and estate taxes, telephone taxes, and all duties and tariffs.”

[quote_center]“The Fair and Flat Tax eliminates payroll taxes, which are seized by the IRS from a worker’s paychecks before a family ever sees the money,” Paul wrote. “This will boost the incentive for employers to hire more workers, and raise after-tax income by at least 15% over 10 years.”[/quote_center]

Paul wrote that there is a need to “blow up the tax code and start over,” because from 2001 to 2010, “there were at least 4,430 changes to tax laws—an average of one ‘fix’ a day—always promising more fairness, more simplicity or more growth stimulants.”

“Every year the Internal Revenue Code grows absurdly more incomprehensible, as if it were designed as a jobs program for accountants, IRS agents and tax attorneys,” Paul wrote. He went on to say that another “increasingly obvious danger of our current tax code” is the power the IRS has to “examine the most private financial and lifestyle information of every American citizen.”

[quote_center]“We now know that the IRS, through political hacks like former IRS official Lois Lerner, routinely abused its auditing power to build an enemies list and harass anyone who might be adversarial to President Obama’s policies,” wrote Paul. “A convoluted tax code enables these corrupt tactics.”[/quote_center]

Paul called his tax plan an “all-American solution,” because “everyone plays by the same rules,” and he argued that the US needs a smart tax system to “turbocharge the economy and pull America out of the slow-growth rut of the past decade.”

“We are already at least $2 trillion behind where we should be with a normal recovery; the growth gap widens every month,” wrote Paul. “Even Mr. Obama’s economic advisers tell him that the U.S. corporate tax code, which has the highest rates in the world (35%), is an economic drag.”

Paul concluded, writing that he intends for his “Fair and Flat Tax” to fix the “the rot in the system that is degrading our economy day after day,” and he sees that new tax as one that is “the boldest restoration of fairness to American taxpayers in over a century.”

For more news related to the 2016 Presidential election, click here.

Business, Featured, Opinion

The Income Tax is Immoral and Unconstitutional – and Not (Just) for the Reason You Think

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I have just paid my biggest bill of the year. The invoice was for a cool 9% of my entire annual income – or my “Adjusted Gross Income” (AGI) as it appears on my tax returns, which have just been filed. And that invoice was from my accountant who just filed them for me.

I have a pretty modest income – so modest, in fact, that my AGI is of the order of a half of the median household income across the United States – the kind of income that triggers significant subsidies under the Affordable Care Act. Even the “top line” of my income falls short of that median: so it’s not as if I’m earning loads and deducting huge amounts.

My financial life last year was pretty simple: my earnings derived from a modest real estate portfolio and some freelance/consulting work. My income is earned through my small business, which, for those who know about these things, is an S-corporation. I have no employees. I do no payroll.

Yet, I have just paid my accountant more than a month’s worth of income to complete my tax returns.

How many pages of tax returns do you think that I, a single individual, and my S-corporation (a small business) had to file, bearing in mind the small amount of income in question?

Frankly, there’s no good reason the answer is not one or two. But you already know the answer is more than that, don’t you?

Ten? Try again.

Twenty? Keep going.

Surely not 50?

You’re still not close.

Did I hear you say 100 – you’re going for three digits now? Wow.

Still not there.

The answer, my fellow American tax victims, is 149.

Just take a moment to absorb that. A sub median-earning American taxpayer, engaged in simple business activities, has a 149 page tax return. And if he doesn’t get it right, his error is punishable. Of that 149, about 100 go to the Feds.

Completing 149 pages of tax forms/schedules/supporting statements is a lot of work. And I know exactly how much it is, because of that big invoice from the accountant that I already mentioned.

It’s $2000 of work – my aforementioned largest bill of the year. And it’s $2000 of work I in no way could have done myself.

I’m no high school drop-out. I have a first class degree in physics from one of the best universities in the world. I like numbers. I like logic. I like intellectual rigor. I even have a nerdy love of spreadsheets (which tells me, for example, exactly how much I spent on groceries this month five years ago ($173.41, as it happens. I’m low-maintenance)).

But I could not reverse engineer those 149 pages of tax returns if my life depended on it. And I would defy anyone without a CPA qualification to be able to do so.

I have no complaint about my accountant, who provided very good service this year, but even he couldn’t get it right first time. As I type this article, I am awaiting “corrected” state returns (which are no shorter).

Moreover, as any small businessman knows, my accountant can only generate those 149 pages of returns after I have compiled all the necessary numbers and data in neat spreadsheets, nicely itemized and comprehensively annotated (two or three days’ work, right there, perhaps?). I know for sure that most tax payers are not as proficient with Excel as I am – so my accountants have an easy time of it with me. (He even told me so.)

Here’s the reality of the American tax system for modestly earning individuals who run small businesses:

My government has put me in a position where I must either pay 9% of my income to a professional just to enable me to avoid punishment, asset garnishment and even imprisonment. Supposedly, I can “do my own taxes”, but that is a joke. No one who has not gone to school for it could accurately complete those 149 pages with any honest degree of confidence – and I don’t care what software he’s using. Moreover, even if it were do-able, the time taken to learn how to do it and then do it properly would be measured in weeks, not hours. And we don’t get to invoice the IRS for our time.

Look in wonder, America, at the most regressive aspect of any taxation system in the world – its utter complexity to the point of Kafkaesque absurdity. And if you think it must be like that, literally a few days ago, the British chancellor announced the abolition of the annual tax return in the United Kingdom.

Can anyone, conservative or progressive, justify the need for self-employed individual to spend 9 percent of his income just to remain a free citizen in good standing or, should he not have the money to spare, to go to school to navigate his way through whichever of the 74,000 pages of the tax code apply to him?

If the tax code were sufficiently sensible that I could do my own taxes (which, as someone who likes money, spreadsheets and math, I’d be very happy to do), I could have paid the Feds double my actual tax bill – and still have been a thousand dollars better off on the money I’d have saved on tax preparation. Relative to the current situation, both I and the country would have been significantly better off.

It is established Constitutional Law (by Supreme Court precedent), basic morality and simple common sense that the government may not place an undue burden on a fundamental right – such as the right to stay out of prison even if one doesn’t have an accounting degree and the right not be forced to expend one’s property on anything other than actual taxes owed.

To quantify the absurdity, here’s a comparison I’ve never seen made before.

In the course of a year, my assets and non-business activities generate nine times as much tax (in the form chiefly of property taxes and sales taxes), as my end-of-year check to the IRS. The cost to me of compliance on that first nine-tenths of my tax burden is zero, while the cost to me of compliance with the other one tenth is about double the amount I actually owe.

You really can’t make it up.

Let me offer these thoughts, then, not as an article, but as an open letter to our government, the IRS and any Constitutional attorneys out there.

To the government, I am notifying you of the undue burden that you are placing on law-abiding citizens whose income, it happens, is deemed by recent legislation to be sufficiently modest that it wishes to subsidize my healthcare: the cost of this undue burden more than cancels out all such subsidies.

To the IRS, I ask this question. What will you do if I save my $2000 in preparation fees, pay you 50% more than I did this year, and I don’t complete those forms? A bonus to me of doing this would be that I don’t have to lie any more. Because we all know that you are forcing me to lie when I sign that paper saying “I declare that I have examined a copy of my electronic individual income tax return and accompanying schedules and statements for the tax year ending December 31, 2014, and to the best of my knowledge and belief, it is true, correct, and complete.”

… The real truth is that, “to the best of my knowledge and belief”, no person who is not trained, certified and engaged in daily work in the business of tax preparation, could possibly expect that he could generate a correct 149 pages of this stuff – regardless of how well he tried. And, moreover, the fact that he cannot is exactly why he can’t be expected to vouch for the work of the accountants whom he’d not have to hire if he did understand what on earth was going on in the first place.

Finally, and most importantly – to any Constitutional attorney: I can’t pay you (see above), but I have a tax return that will make your eyes bleed. Get me in front of a jury or, better yet, the Supreme Court, and let us ask 12 or nine reasonable people if the burden of completing this particular tax return – a requirement I must meet to retain my liberty and my property – is reasonable or not. And if just one of the jury or bench believes that a reasonably educated person could accurately complete my tax return in a reasonable period, I’ll be happily defeated – as long as he shows me how.

Otherwise, use me as a legal guinea pig to pull down this entire rotten structure that turns good people into unwilling law breakers or liars of both, reserving its very worst for those of us on modest means who wish to rise in the spirit of the American Dream, which our government and its agents seem all too willing to crush.

Our tax code is so complex that people our government deems too poor to buy their own health insurance must fork over nearly a tenth of their income just to comply with it. I cannot be the only one.
If I could reasonably compute my own tax – and it’s a matter of common law, surely, that a typical citizen must reasonably be able to meet all impositions of the state by his own means – I’d willingly pay double my current income tax because of all the money I’d save on compliance: I’d save enough to visit my family in England twice in a year; I’d save almost my entire year’s grocery bill; I’d save the cost of the roof over my head for two months.

I can afford my tax bill. I just cannot afford to calculate it. And as you can see from my short list, the complexity of this calculation has a very real impact on my life.

This complexity of our Federal tax system is crushingly regressive; it is impoverishing, and it is morally indefensible.

Simplifying the tax code would be simply the most immediately effective, progressive and moral low-hanging fruit Congress could pick. More importantly, the Constitutional requirement of not attaching undue burdens to our fundamental rights – whose protection, according to our Declaration of Independence, is the very justification of the existence of the state – legally and morally demands it.

Featured, Police State, Politics

EXCLUSIVE: Sheriff Stands Up to IRS, Cancels Land Sale

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WASHINGTON, February 7, 2015—New Mexico’s Eddy County Sheriff Scott London notified the Internal Revenue Service (IRS) via letter that the sale of county resident Kent Carter’s property is canceled until Carter receives due process of law and his appeal is heard. The certified letter dated February 4 received an immediate response from the Undersecretary of the Treasury’s office. According to the Treasury’s website, however, the public auction is still slated for February 19.

“Many officers have stood up over the years for the rights of citizens being victimized by the federal government,” said Sheriff Mack, founder of the Constitutional Sheriffs and Peace Officers Association, “But Sheriff London is the first one to stand up to the IRS since the early 1990s.” Mack said, “His actions show courage and humility. London is setting a good example for the rest of our sheriffs.”

Approximately ten days before Christmas, U.S. Marshals broke in the door of Carter’s rental property with their guns drawn. The tenant was a young mother with a new baby—home alone while her husband was at work. Sheriff London was called to the property to intervene. He advised the Marshals that Carter’s case was in appeal and he deserved due process. They threatened to arrest London, but he stood his ground and they backed off.

Carter has battled the IRS for decades over taxes on the earnings of his modest construction business. One court document listed his debt at $145,000, a figure Carter says an assessing agent “pulled out of thin air.” Every time he challenged them, his bill would shoot up a few hundred thousand dollars. His legal complaints state that the IRS failed to adhere to its own tax code, did not use proper accounting methods, and that the collection activity was unlawful because no notices of deficiency were given. Carter says his private and confidential information, including his social security number, was filed in public records and given to third parties. The IRS countered that it can publish and disperse the private information of Americans if it is trying to collect their money or property. A judge agreed.

Carter says the IRS is currently claiming he owes $890,000, a figure that “doubled with the stroke of a pen.”

The Taxation & Revenue Department ordered Carter to cease “engaging in business in New Mexico” until his arbitrary tax debt was paid. Carter appealed this injunction on the grounds that it was both unconstitutional and vague, as it deprived him of his right to make a living and also prohibited him from, “carrying on or causing to be carried on any activity with the purpose of direct or indirect benefit.”

“The IRS fabricates evidence against citizens by pulling numbers out of a hat and adding fees,” said Mack, “They wear people down emotionally and financially until they can’t take it anymore. No citizen should ever have to fight the IRS for decades in order to keep his land.”

“The IRS is a lie. The income tax is a lie,” said Carter. “Why should they be able to take anything? They’re worse than the mafia.”

The Carter properties have liens placed against them. A locksmith was instructed to change the locks. The IRS authorized the United States Marshal Service to arrest/evict anyone found on the premises. London, however, physically stood in front of Carter’s gate until the Marshals backed down. A public auction on the front steps of the Eddy County Courthouse is scheduled, but the local county sheriff—trained in the Constitution—resisted.

Carter voluntarily vacated his property and relocated his mobile home to an undisclosed location. “I chose to leave to keep it from escalating to something ugly—like Ruby Ridge, Idaho,” he said. Carter said he advised the Marshals and IRS Agents who publicly claimed he had armed friends on his land, “If there is going to be any violence, it is going to be you who starts it.”

Carter says 100% of his Social Security benefits is seized each month by the IRS, in addition to $2,800 the agency drained from his bank account. Legally, the IRS can take no more than 15% of Social Security benefits.

Mack says banking institutions quiver when faced with the IRS’ gestapo tactics and generally hand over customers’ personal banking information, including access to accounts, without requiring a warrant or even any documentation. He encourages county sheriffs to brief every bank in their jurisdiction to refer inquiries from IRS agents to them.

Sheriff Mack is calling for the IRS to start following the law, including no “random” audits without probable cause, as they violate the Fourth Amendment. He asks them to stop committing crimes and rewarding IRS employees with bonuses for cheating on their personal taxes. “I agree with Senator Ted Cruz and others who say the IRS should be abolished,” said Mack. “It’s time they got off the backs of the American people.”

Carter says he prays daily for wisdom, and that he is surviving to be able to look into his grandchildren’s eyes and tell them he fought for their future and for America.

London is the first Republican to ever be elected sheriff in Eddy County. He distributes Bibles on behalf of Gideon International and met his wife in choir practice.