Dollars with Pictures of Goldens

No More Income Tax

My plan for reforming the federal income tax system is simple. Get rid of it. Sound radical? Really, it's not so silly if you look at money from outside the box.

Let's think about this for a moment. Once upon a time, money was tied to gold and silver. A dollar bill was a "silver certificate," not just a paper promise. Theoretically, you could go to Fort Knox and exchange your dollar for metal. Of course, no one ever did because as long as everyone agreed that a dollar could be traded for goods and services, it was easier to use the dollar than metal for commercial transactions. Then we realized that the important thing was not whether the dollar was backed by a commodity, but whether people believed that it had value. Ever since, the size of the money supply (the total number of dollars available to spend) has been "set" by our government at just the amount it thinks we need to keep things humming along. Money is "injected" or "printed" when government pays its employees, buys things, or simply makes money available to the private banking system to lend. Too much money, and we have inflation. Too little, and commerce grinds to a halt because not enough money is available.

Back to taxes. A hundred years ago, to get enough silver certificates to pay its employees and soldiers and to buy ships and buldings, the government had to tax us to get money back so that government could spend it again. That doesn't make sense anymore, when the money available to government depends not on how much gold or silver it has, but on how much money is "just the right amount" to reflect the size of the economy.

Of course, government will still have to carefully balance the way it injects money into the economy when it's needed, and sops it up when there is so much money in the system that confidence in the dollar as a medium of exchange is threatened. That is a topic for another day. The point here is that income taxes aren't needed, and they are an inefficient way of accomplishing the desired results. In short, all the lawyers, accountants, revenue officers, computer systems and private citizens who spend their time collecting and paying taxes might as well be making buggy whips. It's time to put them to work doing something productive by scrapping the federal income tax system.

A philosophical note: Taxes are often used to discourage an activity. Since income is really just a measure of a person's productive activity, income taxes discourage productive activity. So, begone with them. Lest Republicans get too excited, let me add this. Income is also the means by which we accumulate wealth that passes to the next generation, who then enjoy the power of wealth without ever doing a lick of work. That's feudalism, and when I become president, it's going to end.