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The Republican Tax Fraud

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The Republican Party holds itself out as the anti-tax party. If nothing else, the GOP believes that calling for tax cuts is the sure path to electoral success. But as W. S. Gilbert wrote, things are seldom what they seem. The Republican record on taxes is nothing to brag about. Even the vaunted Reagan years, which brought a cut in income tax, raised other taxes, such as the Social Security tax, year after year. And the great tax simplification movement of 1986 actually made the tax code more complex. The same can be said for the 1997 changes.

The Republicans have now opened another front in their wimpy war on taxation: the Internal Revenue Service. The party is now bent on exploiting the victims of the IRS for its own political benefit. Why call it exploitation? Because the Republicans refuse to face what must be done if they really want to get the IRS off the backs of the American people. To complain about the IRS and not really do anything about it is hypocrisy.

Yet, the GOP knows a hot election issue when it sees one. Frank Luntz, the Republican strategist, has told the party that “nothing guarantees more applause and more support than the call to abolish the Internal Revenue Service.” The issue, he said, is a “political winner.”

As noted, the Republicans are as much responsible for making the tax code impossible to understand as the Democrats. Complexity is a major reason why people get in trouble with the IRS. Every adult walking down the street has most probably violated the tax code in some way. The authorities know that. That makes for an unattractive relationship between citizen and state in a free country.

But complexity is not the only reason people get in trouble. Taxes on income raise over a trillion dollars a year. The government’s appetite for cash is unlimited: it does little more today than transfer money from those who produce it to those who don’t. That’s how politicians stay in power. If the money doesn’t come in, they have nothing to do. So over the years they have given the IRS a mandate to get the money almost at any cost. The protections of liberty that apply to other parts of the law are close to nonexistent in the tax law.

That won’t change much as long as the national government tries to raise over a trillion dollars. In practice, the income tax is the most onerous tax, and for that reason alone, it should be repealed. But any tax designed to raise that much money will be a burden on the people, and the tax authorities will have to play hardball to get it. After all, most people don’t really like turning over a major part of their earnings to government, no matter what form the tax takes.

The national government would not have to raise a trillion dollars if it weren’t in the transfer business, in other words, if it weren’t trying to run a welfare state. We might be tempted to say that if citizens didn’t demand welfare-state programs, the government wouldn’t supply them. But that is not entirely true. The people who make careers out of proposing and running those programs have an interest in foisting them on the rest of us. Moreover, most people might be willing to see the whole structure disappear if they knew how much money it would save them. The vast bulk of people who benefit a little from one or two programs don’t realize that they are paying much more for everyone else’s benefits. They’d be way ahead if the transfer machine were just shut down.

Does the Republican Party have a good record in cutting back the power of government? The question is laughable. The latest budget from the majority GOP increased domestic spending by $70 billion in the first year alone — more than the Democrat in the White House asked for.

A party with a spending record like that should not be believed when it says it will save us from the tax man.

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.