Last Updated:August 27 @ 07:49 am

Olivastro: Time to Repeal the Income Tax

By Richard Olivastro

No amount of money or security is sufficient to sacrifice one’s god given freedom.

Could that be what Patrick Henry understood when he declared: “Give me liberty or give me death”?

These days, here is what we can insightfully conclude:

The persistent reduction of citizens retained earnings and the compression of individual free choice options -- installed through an insidious income tax system and set of nefarious regulatory schemes --    is indeed endemic of the very abuses and usurpations that gave our forefathers just cause to birth the Declaration of Independence.

Last week, readers of this column learned of three specific examples -- President Thomas Jefferson; U.S. Supreme Court Justice Robert Jackson; and, IRS commissioner Thomas C. Andrews -- among others, in which courageous Americans through the years have spoken out to alert their fellow citizens to the injurious income tax system being used by government to take property and control the people.

Yet, it is former IRS commissioner Thomas Andrews’ confessionary alert that is repeated here because – in just 40 words – he pointedly provides the ringing evidentiary indictment of both the federal income tax system and the IRS bureaucracy: “A lot of the people living today… don’t know what the buying power of success was… before we decided to use… excessive income taxes… to punish success… and estate and gift taxes… to force every generation… to start from scratch.

So, what can be done now?

In short, as described in this series:

  1. Repeal the income tax in 2011; and,
  2. Concurrent with the start of the repeal process - Shrink; then shutter the IRS by 12/31/2012.

To address some essential questions:

How could government be funded in lieu of the current income tax?

Implement a calibrated version of one the following tax models:

O Fair Tax – a general national sales tax.

O Flat Tax – a flat tax still on income.

Do this (at least) interim to implementing a government funding model decided by the people.

In a future piece we will discuss the pros and cons of the Fair Tax, the Flat Tax, and other models as well as the calibrations each may need in order to ensure equity consistent with the original intent of our founding.

Could the IRS be abolished?

Yes – by year end 2012.

During the ‘wind-down period’, the expansion of electronic processing would be accelerated. (See Commentary Archives for three prior columns in this series outlining some details.)

Now – Breaking News:

For any skeptics and the one or two angry progressives (yes, I enjoy reading all feedback) here’s more information of timely coincidence confirming that “Shrinking; then Shuttering the IRS” is, indeed, quite doable:

Last Friday, Jan. 14th, the IRS announced that the ‘Free e-File program’ would again be available to “Individuals or families with 2010 adjusted gross incomes of $58,000 or less”.

Also, the IRS announced that Free File “Fill-able Forms” - the electronic version of IRS paper forms - has no income restrictions to use, print and mail in to them.

And, this week Intuit’s TurboTax releases “Snap Tax”, a new mobile application that (get ready for this) “smart phone users can use to file a 1040EZ form by (first) taking a picture of their W-2”.  An estimated 22 million Americans are “eligible to file a 1040EZ” if they do not itemize, that is, claim only the standard deduction, have no dependents, and earn less than $100,000.

The implications of these new announcements are clear.  As described in this series actually “Shrinking; Then, Shuttering the IRS” is absolutely doable.

All that need be done is for the U.S. Congress to direct the IRS to treat all Americans the same way, that is, make all citizens “eligible” (as the IRS likes to decree) to use the same new streamlined 1040 Form as described here.

It really is as simple as A – B – C:

  1. Reduce forms to a “core few”.
  2. Simplify those forms and make all taxpayers eligible.
  3. Intake and process all forms electronically.

Staff reductions and redeployments decrease IRS staff levels continuously during the “Shrink the IRS” phase (2011).

Then, by the end of the “Shuttering the IRS” phase (2012) the bulbous bureaucracy will be gone.

Last Column Poll – Remains Open:

Who More Deserves Your Money – You or Government?

---

Richard Olivastro is president of Olivastro Communications and founder of Citizens for Change (www.CFC.us). He is available pro bono for charitable fundraisers and public forums and can be reached via e-mail: RichOlivastro@gmail.com or phone at 1-877-RichSpeaks.

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23 Comments

  1. onewildmanComment by onewildman
    January 20, 2011 @ 11:48 am

    I believe that a national sales tax is best. It real is the best as it taxes consumption, that way your money is not just being taken away from you. If you want to save your money you can by buying only the items you want at the price your willing to pay. The more extravagant the perches the more tax you pay. Example: buy a Kia you pay a set tax, buy a Mercedes you pay a set tax. Lower income pay less and rich still pay more and everybody is paying taxes unlike the 49% who pay nothing.
    IMPEACH OBAMA NOW!

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    • Dave.RockComment by Dave.Rock
      January 20, 2011 @ 2:30 pm

      You are so right on.  A national sale tax in my opinion is the only way.  There are so many people not paying their fare share under our current system.  Then, there is the so called under-ground economy.  People being paid under the table.  A national sales tax would resolve these issues.

      GOD BLESS AMERICA

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  2. wallybluComment by wallyblu
    January 20, 2011 @ 3:24 pm

    You see they didn’t give you realistic alternatives.

    I believe that a flat rate income tax is the fairest there is as long as there are no exceptions or deductions.

    I don’t care if your income comes from welfare or smart investing or if you have children or not, if you made money pay the tax.  You got a dollar to spend from what ever source you pay X% the same as everyone else.

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    • riverkingComment by RiverKing
      January 20, 2011 @ 10:38 pm

      The current income tax mess started as a singe rate (flat) tax.  Do you really trust today’s politicians to leave a flat tax that way any more than we trusted politicians of the last 70 years?
       
      I don’t.
       
      We need to pass HR 25 as written and repeal the 16th Amendment to put a stake in the heart of the IRS (sorry about that violent symbolism).

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  3. swooperComment by swooper
    January 20, 2011 @ 3:59 pm

    I vote for a flat rate tax on income to replace the present income tax. You could virtually mail it in on a post card. Unfortunately, there are too many people and institutions imbedded in the present system. The IRS is only one of the major ones; the government itself uses it to promote its agenda, so I don’t see a ghost of a chance that this will ever happen.

    But to borrow from Shakespeare, I believe, ”….the stuff that dreams are made of.”

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    • Double AceComment by Double Ace
      January 20, 2011 @ 6:00 pm

      Could work but how do you tax the illegal activities, illegal gambling, prostitution, drug dealers, etc.? That’s a whole lot of money not getting taxed. With the fair tax when the drug dealer buys his mazerrati, or yacht, bang! he is taxed. When joe Hollywood buys a mansion for $25m he is taxed.

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  4. Liberty4310Comment by Liberty4310
    January 20, 2011 @ 4:02 pm

    I’m looking forward to your future articles on the various tax options.  I am a proponent of the national sales tax as it would be the most visible and fairest.  Those who spend a lot would pay more.  Those who spend less would pay less.  But it would have to come with some exemptions, just as state sales taxes do.  Uncooked food, for instance, should not be taxable.

    I am a businessman.  I collect state sales tax with each taxable sale and periodically fill out a one-third page form and mail it with a check to the state comptroller.  It’s simple and efficient, and I even get to keep a very small portion of the tax for sending it in ahead of the deadline.  It takes me less than five minutes to handle it and it probably takes someone in the comprtoller’s office less than one minute to process.  What could be better? I also have the option to do it electronically, but really haven’t seen the need.

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  5. buzzmasterComment by buzzmaster
    January 20, 2011 @ 4:16 pm

    Taxes in this country are too high due to military spending beyond reason, entitlements for the aged, and foreign debt to pay for spending too much.  Congress, regardless of party, has no interest in curbing that spending since such a move would cost them votes.  The political parties, particularly Republicans, are guilty of deluding the public into believing they will cut spending in order to cut taxes, but instead only cut taxes without cutting spending.  Both parties. Until there is a Balance Budget Amendment, I don’t give a d*** what you do about the tax laws, its coming out of our pockets one way or the other.

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    • Double AceComment by Double Ace
      January 20, 2011 @ 5:57 pm

      Buzzmaster, please explain what you mean by entitlements for the aged? If you are talking about social security, it is the governments fault this program is failing. The aged (as you call them) have paid money into the system. I read an article once about Galveston, TX city workers who were exempted from Social Security. They invested the money as intended and when they reached retirement age they were receiving more in pensions than they received while working. The so called entitlement program is not at all an entitlement. These folks paid into the system and they deserve to be repaid, with interest. If the politicians stole the money and squandered it they should be tried and convicted of their ponzi scheme, just as Bernie Madhoff was. Your atitutde “I don’t give a damn what you do” is exactly the attitude that put us in this hole in the first place. That and a lot of crooked politicians. Mostly those on the left.

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  6. TRUTHTELLERComment by TRUTHTELLER
    January 20, 2011 @ 5:05 pm

    Aflat rate sales tax(NOT A VALUE ADDED TAX) on all items purchased by everybody is the fair way to go.  Then, everybody pays their fair and equal share.

    Buzzmaster, if every body paid a flat rate sales tax, including the 40-50 percent of the people that pay no income tax, the revenues would be equal to or greater than what is collected now.

    Drastically cutting spending, with an eventual balanced buget requirement, is in the process of happening now.  Vigilance and holding politicians feet to the fire, is our responsibility

    A flat sales tax means, that  if you buy more, you pay more tax.  Simple, fair. no deductions, no sweating over tax return forms, no paying CPAs to fanegle you a better deal.  You pay as you go.

    Of course the standard exemptions for food and groceries etc.. should be observed.

    Changing the tax system should be just as high a priority as ballancing the buget.  They can and should be accomplished, at the same time.

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    • Liberty4310Comment by Liberty4310
      January 20, 2011 @ 6:34 pm

      Truthteller.  You seem a little confused about which tax proposals are which.  Basically, a “flat tax” is still an income tax, but one one which all pay the same percentage.  That’s better than what we have, but retains the IRS to administer.  A “value added” tax is one where taxes are assessed on each stage of production, distribution and sales of goods and services.  The final consumer pays all the taxes, but they are hidden in the price of the goods he purchases.  It is complicated and convoluted and still requires a large bureaucracy to administer.  A “fair tax” is a sales tax added as a percent on top of purchases made.  It is visible and the same for everybody.  Each business collects it and sends it to the government.  It is simple for government to administer because they need to only deal with businesses instead of the more than 300 billion individuals.  It can be handled by a significantly smaller agency than the IRS.  By far, it is the most equitable for everyone involved.

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  7. Double AceComment by Double Ace
    January 20, 2011 @ 5:51 pm

    The fair tax is exactly that. If you are rich and buy lots of items you will pay more taxes than the less wealthy who buy less. ALso this tax will reach many areas of our society that today pay no taxes (drug dealers, prostitutes, illegal gambling, etc) these people will be taxed when they purchase luxury items. This is the only way to go. The IRS itself costs the taxpayers hundreds of millions of dollars annually just to make sure people are paying their taxes, not to mention all the CPA’s, and bookeeping expenses. It is estimated the fair tax would increase the tax revenue significantly.

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  8. moforlessComment by moforless
    January 20, 2011 @ 6:52 pm

    The federal government has certain enumerated powers listed under Article 1, Sec 8 of the US Constitution.  Determine a budget to fund those responsibilities.  Divide by the number or residents of the country as per the census.  Apportion to the states.  The states raise the money per head and send to the fed. The citizens of the states determine what level of services above and beyond they are willing to pay for within their sovereign borders. 

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  9. johnlong88Comment by johnlong88
    January 20, 2011 @ 7:10 pm

    I too favor the Flat Tax, because with any income tax system, defining what is income becomes subjective.  A small business owner has income from it’s clients but also expenses for producing that income or net income.  Which do we tax.
    A tax on purchases is quick, easy to account for and fair for all concerned.  Those not reporting income do purchase goods and services so they would not excape paying their fair share.  Everyone under this system would receive a monthly prebate to reimburse each individual for sales tax paid under a low income level so low income earners would not be penalized.
    Anyone who thinks taxing the rich and big business will solve our problems is dilusional.  In fact big business passes on it’s taxes to its customers…us.  I think if we truly want our jobs to come back from foreign countries we should not tax business at all.  Overseas companies would most likely want to come to the USA and bring their jobs with them.
    Just my opinion…Google Fair Tax to read about how it works.  A lot of thought has gone into it.

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    • Liberty4310Comment by Liberty4310
      January 21, 2011 @ 10:50 am

      Please note: A tax on purchases is a “fair tax.”  The “flat tax” is income based. 

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  10. FrancescoComment by Francesco
    January 21, 2011 @ 10:43 am

    A national sales tax at the retail level only is the only way to go.  Any tax which requires reporting of income to the government is a dangerous undertaking.  Once the government sees your money they want it.  Retail only means eliminating hidden taxes on manufactured products.  In other words if you are a manufacturer and have to pay your suppliers with added sales tax than you have to turn around and sell your product and add the sales taxes again on top is insane.  All exported products should have no sales tax which will support job creation in the U.S.  and make us more competitive internationally.  Wealth creation is the key to all since without that there is nothing to tax. 

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  11. Liberty4310Comment by Liberty4310
    January 21, 2011 @ 10:53 am

    In reading the comments above, it’s obvious to me that the fair tax will be a difficult sell.  Even some of the respondents here who are generally among the better informed of our citizenry don’t understand the differences between “fair” and “flat.”  Is the term “sales” so repugnant that we can’t call it that?

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  12. doloreskComment by doloresk
    January 21, 2011 @ 4:15 pm

    A sales tax is the best idea.  Then even those paid under the table or who make their living illeagally will be taxed.

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  13. Pingback: Time to Repeal the Income Tax | Republican Party of Door County

  14. Pingback: » Olivastro: A Nerve Has Been Struck! Commentary

  15. jboyComment by jboy
    January 25, 2011 @ 4:43 pm

    Remember, a Flat Tax is in violation of the apportionment requirement of the US Constitution.
    A Fair Tax will always increase in percentage – ALWAYS!
    The 16th Amendment DID NOT repeal the apportionment requirement from the US Constitution and DID NOT add any new “income” tax.  It merely allowed taxes to be levied on privileged sources of income which were not previously taxed as such. These are called Excise Taxes. They are on privileged sources, such as government workers, officers of a corporation, etc.  Please search for the Supreme Court ruling that the 16th Amendment conferred no new taxes.
    If you are a private-sector worker, the payments for your labor are NOT TAXABLE, in spite of what you have “thought” all your life.
    http://www.losthorizons.com

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  16. csmebyComment by csmeby
    January 26, 2011 @ 8:52 am

    Actually, my strong preference is a combination of the Fair Tax (50%) and a progressive income tax without ANY  deductions. The deductions are what drives politics and the lobbyist.

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  17. riverkingComment by RiverKing
    January 26, 2011 @ 9:28 pm

    NO! NO! NO!  You can not prefer “… a combination of the Fair Tax … and a progressive income tax ….”  They are mutually exclusive, complete opposites.
     
    Please read HR 25 before commenting on the Fair Tax.  You will find that HR 25 FIRST repeals all income-related taxes.  Only then does HR 25 define the Fair Tax and tie its implementation to repeal of ALL income-related taxes and repeal of the 16th Amendment.
     
    HR 25 is an easy read with very little legalese and gobbledygook.  You can find it by going to http://thomas.loc.gov/ (The Library of Congress) and searching for “Fair Tax” or “HR 25″.  The PDF is only 131 double-spaced pages with very wide margins.  You should also go to http://www.fairtax.org for more information.

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  18. wnettlesComment by wnettles
    January 27, 2011 @ 7:56 am

    The FairTax Act offers the best solution for our current economic woes, as it affords the citizen the most freedom with regard to choosing which taxes he/she wishes to pay and which taxes he/she wishes to avoid.    The best system that we can come up with to replace the income tax and the IRS is the one that gives the individual the most freedom, ie the FairTax.  

    Most folks still don’t understand that the current income tax started out as a flat tax in 1986 and has steadily devolved into what it is today, an income tax that has been amended over 17,000 times and loaded with social engineering and pork.   The current tax code comprises over 70,000 pages of undecipherable text, rules, codes, regulations, ordinances, laws, and other language that even the best of lawyers cannot completely understand.  

    Simpler is better.   FairTax is our best bet to get our nation back on track.  Demand FairTax Act now.

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  19. shipley130130Comment by shipley130130
    January 28, 2011 @ 6:55 pm

    The IRS using technology to put themselves out of business.  I like it. 

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