Wednesday, June 13, 2012

Income Taxes are for Control, not “Revenue”

I take the following quote from today’s Ed Steer Column:

If we don't do something to simplify the tax system, we're going to end up with a national police force of internal revenue agents.
 - Leon Panetta, U.S. Secretary of Defense

The purpose of the income tax is for control.  The purpose is to give rise to another national police force. 

Recall with me the not-so-long-ago days of $200 billion dollar deficits.  Today the number continues at well above $1 trillion.  Meanwhile, personal income taxes are in the range of $800 billion. 

Income taxes could have been eliminated, and the deficit (on a simple math basis) would have grown to no worse than it has otherwise grown due to spending increases.

Read the last sentence again.  Income taxes are for control, not revenue.  The government knows every aspect of your economic life, which means every aspect of your life.  How much you earn, who pays you, what you spend your money on, where you bank, where you keep assets.

It isn’t for “revenue.”  The deficit would have been the same, but the money would have been in your pocket not theirs.  The Fed and private investors are funding the deficit.

There are less intrusive ways to tax: both a sales tax and a property tax allow for more privacy (I am not advocating either, but I would take either if the income tax were scrapped).  The objective isn’t revenue.  It is to ensure you don’t have any privacy.

I have previously written about the Trojan Horse of Obamacare.  Even if he loses in the Supreme Court, he will keep the additional taxes and the additional IRS agents that were authorized in the legislation.

Panetta is right.  He is not giving a warning, but making a statement.

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