I know this might have been discussed before (I did a search, but didn’t find anything immediately), but tonight’s 20/20 with Barbara Walters contained a segment about a woman who refused to pay income tax.
I know a lot of people do not like paying taxes, but how else is the government going to pay for things to take care of its citizens? (e.g. upkeep road system etc.)
Also, as a side note: If this lady isn’t paying her income tax (and seems pretty adamant about not paying any taxes), I don’t think she should be able to drive her cars down the public street, or ride her bike on the sidewalk or anything… but’s that’s just my own $0.02.
Now, what are you going to do to replace that lost government revenue in order to maintain those government services you believe are essential? Increase property taxes? Death taxes? Import duty taxes? Sin taxes?
We can debate your question ad nausem, as has been done before here. Nothing will change, unless you’re willing to discuss the entire tax structure and how it has to be modified to compensate now that a major pillar of it was just removed from the equasion.
JohnT, Libertarian is gently comparing government to the mafia. It’s not too bad an analogy. The government offers protection for a price. You have little choice about the protection or the price.
Governments offer much the same services as organised crime. They have the ability so to do because they can *make *people do things. What makes one a racket and the (ideal) other the well-spring of civilisation? The extent to which the services are provided at cost and the degree to which the need for protection is produced by the racketeers themselves.
Legally, the Sixteenth Amendment makes it very clear that the Federal government has the power to impose taxes based on income. (There’s an apocryphal story that the framers of the amendment had placed “not exceeding ten per cent” in the draft text and dropped it on the comments of several congressmen that nobody would ever tax at that high a rate.) Cecil did a column on bizarre legal arguments used by income tax protesters which might be worth referencing here on this 50th anniversary of the congressional resolution admitting Ohio to the union.
It would theoretically be possible to run the government without dependence on income taxes. Several states operate under a balanced budget without an income tax. But the individual and corporate income taxes together constitute a major component of the “income” side of the federal budget – and major and significant slashes in the “expenditures” side would be needed to compensate for that loss of income.
I will defer to Libertarian in explaining the libertarian thesis about what government ought and ought not to do – but suffice it to say that much of what is done compulsorily through taxation and appropriations might equally well be done voluntarily through contributions or contractual arrangements. (My own personal pet peeve on this subject is “economic development” bureaus of government, which are perhaps the worst activities under cost-benefit analysis of anything ever thought up.)
We could stop paying interest on the National Debt. By sheer coincidence, the amount of Federal revenue generated annually by individual income tax payments is about equal to the annual interest payments the Federal government pays on the national debt these days. Poof! Problem solved.
Well, about 10% of the National Debt is owed to the Federal Reserve. The other 90% are owed to those individuals, organizations, and foreign countries that have purchased U.S. savings bonds (or T-bills or T-bonds, I can’t keep them all straight). I haven’t a clue as to how that 90% is broken down.
Oh! I almost forgot. The Social Security Administration also buys U.S. treasury securities whenever it has a budget surplus. Due to the Social Security windfalls we enjoyed in the “boom economy” of the 1990s, I’d guess a good fraction of the National Debt is also owed to the Social Security Administration.
I know your whole thing here is sort of tongue-in-cheek but, lest anyone get the wrong impression, this statement is not in fact true. If you look at the back of your income tax form (I used the year 2001 form), you will see that personal income taxes account for 50% of government income. Interest on the debt accounts for 11% of outlays. If we assume that income = outlays (not quite true but probably not too bad especially in year 2000), then we find that interest on the debt is somewhere between 1/5 and 1/4 of personal income tax receipts.
Notice the specificity of the question, however: should we pay income tax?
The Federal income tax is one of the most bizzarishly regulated and litigated areas in the law. If you have any form of income, which essentially amounts to “any tangible benefit to you,” you’ve got income. If your employer provides you with parking, it’s income. If you sell property in a garage sale, it’s income. If you get frequent flyer miles, it’s income. Etc., etc.
I exaggerate somewhat: Congress and the courts to some degree have carved out a slew of exceptions either for public policy reasons (i.e., inheritance income) or because it’s unworkable (fringe benefits). And then there’s a horde of deductions. And exceptions to deductions. And exceptions to the exceptions. The point being that come April 15 each year, you’ve got 250 million+ p.o.'d Americans who furrowed their brows over a confusing 1040 form that requires them to give up a substantial chunk of the money they, not Uncle Sam, worked for.
In other words, I don’t know what that woman on 20/20 was protesting. It does make me wonder what she would propose in the alternative: a flat tax? A tax on something else (property, perhaps)?