Dave Camp’s tax reform shows why we should abolish the IRS

Theo Caldwell | Investor and Broadcaster

As Congressman Dave Camp’s big line goes, the United States’ tax code is ten times the size of the Bible, but with none of the Good News.

When someone whose signature riff laments the length of tax laws attempts to remedy the situation, you’d expect his fix to be the soul of brevity. The fact that Camp’s newly released proposal clocks in at nearly 1,000 pages makes one wonder if the right problem is being addressed.

As Chairman of the House Ways and Means Committee, Camp has undertaken a worthy task in issuing a new discussion draft on tax reform.

But slogging through the document’s 979 pages (for those with lives to lead, a 32-page Executive Summary is also available), what becomes apparent is the ubiquitous, soul-crushing influence tax considerations have upon every aspect of American life.

From education to adoption to health care to religion – literally, from birth to death – there is a tax consequence to almost every action, no matter how intimate or picayune.

Camp’s ambition is to simplify the system and eliminate many of the politically driven incentives within the code. This is laudable, but in finding offsets and attempting to help families or charities or other worthies, he ends up with slightly less of the same – a regime under which almost anything you do is the taxman’s business.

Whether the tax implication is good or bad is beside the point. What matters is that the conduct of civil society becomes influenced and distorted by tax considerations.

Camp has attempted to improve the system by working within it. To see a dedicated and diligent public servant achieve such an underwhelming result through this approach yields an inescapable conclusion: The system itself must be scrapped.

To his credit, Camp spends considerable energy attempting to reform the Internal Revenue Service, enumerating rights for targeted taxpayers and calling a halt to the agency’s lavish spending on itself. But this merely addresses symptoms.

To wit, if you have to write a law saying agency employees should not squander money on conferences while abusing the taxpayers they purport to serve, the rot is already too deep.

As its recent, infamous conduct reveals, the IRS is a malignant outfit, for which America has no need. The United States survived and thrived for the majority of its history before this absurdly titled “Service” was spawned barely 100 years ago. Despite its arrogant, institutional insistence that it embodies that necessity of civilized society spoken of by Oliver Wendell Holmes, the IRS has shown itself to be unscrupulous and unworthy to gather the nation’s financing.

Helping Americans understand things can be different is an abiding challenge, as is pointing out that this is not how taxes are handled in other parts of the world.

Officious though they may be, the tax authorities of other developed nations do not infest every aspect of private life, nor do they operate as political enforcers for the party favored by the bureaucracy – and they most certainly do not treat their citizens abroad as tax subjects, requiring them to file and pay taxes regardless of where they reside (with the exception of Eritrea).

As columnist Mark Steyn often notes, Americans’ cringing fear of their tax department is a disgraceful anomaly among liberalized nations, and unbecoming supposedly free citizens.

If, then, we lance the boil that is the IRS, how do we fund the government?

You may choose one of the following options (but not both): a consumption tax on goods and services (Fair Tax), or a single, small rate of tax on income (Flat Tax).

There is ample support  for each of these in Congress and across the nation. Administered by a new, small agency, with no other mandate and separate from the IRS (which would be permitted to melt like Margaret Hamilton), either approach would provide ample funding for the business of government, while minimizing the influence of taxes on Americans’ personal choices.

No one, not even Camp, expects there to be much movement on his proposal during this Congress, if ever. This is partly a function of political reality, but also of the timidity of his plan, notwithstanding its intended comprehensiveness. A truly comprehensive reform of America’s tax system would start by throwing the whole thing in the ocean.

Simply put, it is impossible to get excited about Camp’s plan, much less explain it in terms that are politically appealing. For all its foofaraw about closing this loophole and eliminating that special interest incentive, we are still left with a tax policy that inserts itself into almost every area of human existence, and which starts at 1,000 pages.

Instead of an ever-present influence, make the tax code an afterthought. To unleash America’s potential, to allow her citizens to pursue happiness and go boldly in the direction of their dreams, get the taxman out of the way.

Theo Caldwell, an investor and broadcaster, can be contacted at theo@theocaldwell.com

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