By MICHAEL A. WALSH
Michael A. Walsh
Abolish the Internal Revenue Service? So says Sen. Ted Cruz (R-Texas): “We ought to abolish the IRS and instead move to a simple flat tax where the average American can fill out taxes on postcard,” the GOP’s favorite iconoclast told Fox News the other day.
How would it work? “Put down how much you earn, a deduction for charitable contributions, home mortgage and how much you owe — take the agents, the bureaucracy out of Washington and limit the power of government.”
It’s the burgeoning IRS scandal that’s put tax reform back on the agenda, of course — the agency’s singling out of conservative groups for partisan scrutiny has rightly enraged Americans. It’s plainly not just a sign of the Obama administration’s unabashed contempt for its political opponents, and its dangerous willingness to defeat them by any means necessary — it’s also a vivid example of how far we’ve come.
The century-old “progressive” desire to punish the rich and redistribute income has grown into a terrifying governmental monster against which there is almost no redress — one that robs the American people of their income and, in the process, their liberties.
The system began with the passage of the 16th Amendment, which overturned the Constitution’s insistence that taxes be apportioned among the states. Instead, it gave us a tax on individual income “from whatever source derived.” (Until then, the feds were financed largely by customs duties and excise taxes, with an income tax briefly imposed during the Civil War.)
It began with a top rate of 7 percent on incomes over $500,000, and quickly mushroomed to 77 percent on income over $1 million by 1918. As Congress found it could fiddle with the tax brackets, by 1925, the top level had come down to a mere hundred grand, taxed at 25 percent.
Surprise, surprise: The more money the feds got, the more they spent, and the more they spent the more they needed more. As economist Walter Williams has pointed out: “Since the 1791 ratification of our Constitution, until well into the 1920s, federal spending as a percentage of gross domestic product never exceeded 5 percent, except during war. Today federal spending is 25 percent of our GDP.”
To get that money, the IRS has assumed powers that would be unconstitutional in any other sphere, including the ability to seize money and property without a court order. Contemporary liberals love this, of course, since maximized federal spending is the key to their vote-buying schemes. (Where do you think Obamaphones came from?)
Yet, as we learned under Nixon, the IRS is inherently dangerous: An unscrupulous president can turn its vast powers to political ends to harass and punish his enemies. Hmm: Under ObamaCare, the IRS will undergo a vast expansion in order to act as the law’s enforcer.
(It’s also badly corrupting: Vast amounts of Washington lobbying go to carving out tax loopholes for the well-connected on both sides of the aisle.)
The only way to turn things around is drastic simplification of the tax code — the cleanest version of which is the flat tax.
Under the flat tax, everybody pays the same percentage of income. Today, the top 1 percent pays nearly 40 percent of the total tax burden, and half of filers pay nothing (or get “refunds”). Flat tax or not, the political health of our nation demands an equitable sharing of the burden; everyone should pay something.
The IRS would remain in some rump form (there’d still be cheating, though much less), but its bureaucrats would also have far less power to engage in the outrages the agency’s now lamely trying to blame on “rogue agents.”
Alabama Tea Party activist Becky Gerritson had it exactly right in her testimony before the House Ways and Means Committee this week. “I’m not here as a serf or a vassal. I’m not begging my lords for mercy. I’m a born free American woman . . . and I’m telling my government that you’ve forgotten your place.”
It’s time to put them back in it.