It Is Time For a New Tax Revolt

We will never control our government until we control the federal tax system.

It is corrupted and unfair and feeds unchecked government growth. It has made the federal government far more powerful than what was supposed to be its equal—our state governments. The income tax hides the cost of the government from plain sight and provides endless amounts of our money for the advancement of politician’s personal ambitions. It is very good for those in Washington and very destructive for the rest of us.

We’re being treated as if our only value as citizens is how much more money we can be made to give up from our paychecks. When it comes to more and more spending and more and more taxes, it is a one-way conversation. I’m ready to talk back and I don’t think I’m alone. That’s why I’m calling on every patriot to join me in a tax revolt march on Washington , D.C.

I’m leading a Tea Party Patriot team in a growing on-line tax revolt which arrives in Washington , D.C. on April 15^th to merge with the huge physical rallies that are already planned for that day. It’s a new technology that allows people to choose a graphic “avatar” to digitally march on-line to Washington with hundreds of thousands of other Americans. Even the homebound, recovering veterans and the elderly can add their voice to this new American chorus.

I’m seeing a lot of people remembering that politicians are supposed to follow the will of the people—not trample it. Like Boston Harbor , this is where we again make our stand.

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Tags: april 15 rally, deficit spending, Fair Tax, federal debt, Flat Tax
Posted Mar 1st 2010 at 9:55 am in Congress, Fair Tax, Flat Tax, Politics, State Politics, Tax Reform, Tea Party, federal spending | 82226130 Commentshttp://biggovernment.com/jwurzelbacher/2010/03/01/it-is-time-for-a-new-tax-revolt/It+Is+Time+For+a+New+Tax+Revolt2010-03-01+17%3A55%3A44Joe+%26%2339%3BThe+Plumber%26%2339%3B+Wurzelbacher

Political Alchemy, Part I: Turning Spending Increases into Tax Cuts

Politicians in Washington have come up with something far more impressive than turning lead into gold or water into wine. Using self-serving budget rules, they can increase the burden of government spending and say they are cutting taxes instead.

This bit of legerdemain is made possible, thanks to the convolutions of the personal income tax, by adopting or expanding refundable tax credits. But in this case, “refundable” does not mean the government is returning money to taxpayers. Instead, it means that money is being redistributed to people who do not earn enough to be subject to the income tax.

This is hardly a trivial issue. According to the Congressional Budget Office, the amount of income redistribution being laundered through the tax code is now so large that the bottom 40 percent of the population has a negative “effective” income tax rate. In simple terms (though perhaps with profound political implications), the income tax is a revenue generator for a big share of the population.

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Tags: 1040, Big Government, EITC, federal spending, Flat Tax
Posted Feb 8th 2010 at 12:57 pm in Congress, Economics, Flat Tax, News, Obama, Politics, Tax Reform, Uncategorized, federal spending | 7025055 Commentshttp://biggovernment.com/dmitchell/2010/02/08/political-alchemy-part-i-turning-spending-increases-into-tax-cuts/Political+Alchemy%2C+Part+I%3A+Turning+Spending+Increases+into+Tax+Cuts2010-02-08+20%3A57%3A34Dan+Mitchell

H and R Block and the IRS: An Unholy Alliance to Ransack Taxpayers

The late George Stigler, winner of the Nobel Prize in economics, is famous in part because of his work on “regulatory capture,” which occurs when interest groups use the coercive power of government to thwart competition and undeservedly line their own pockets.

A perfect (and distasteful) example of this can be found in today’s Washington Post, which reports that the IRS plans to impose new regulations dictating who can prepare tax returns. Not surprisingly, the new rules have the support of big tax preparation shops such as H&R Block and Jackson Hewitt, which see this as an opportunity to squeeze smaller competitors out of the market.

The IRS and the big firms claim more regulations are needed to protect consumers from shoddy work, but this is the usual rationale for licensing laws and other government-imposed barriers to entry and the Institute for Justice repeatedly has shown such rules are designed to benefit insiders rather than consumers.

Tax preparers do make many mistakes, to be sure, but that is a reflection of a nightmarish tax code, and the annual tax test conducted by Money magazine showed that even the most-skilled professionals – such as CPAs, tax lawyers, and enrolled agents – were unable to figure out how to correctly fill out a hypothetical family’s tax return. But since the IRS routinely makes major mistakes as well, perhaps the moral of the story is that we need fundamental tax reform, not IRS rules to create a cartel for the benefit of H&R Block and other big firms. Would any of this be an issue if we had a flat tax or national sales tax?

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Tags: Big Business, Big Government, corruption, Flat Tax, IRS
Posted Jan 5th 2010 at 1:17 pm in Economics, Flat Tax, News, Tax Reform | 55546109 Commentshttp://biggovernment.com/dmitchell/2010/01/05/h-and-r-block-and-the-irs-an-unholy-alliance-to-ransack-taxpayers/H+and+R+Block+and+the+IRS%3A+An+Unholy+Alliance+to+Ransack+Taxpayers2010-01-05+21%3A17%3A39Dan+Mitchell