Simplify tax law
Last week, Senator Tom Cotton used the term “surveillance plan” to describe the proposed expansion of the IRS’s access to aggregate banking activity to over $ 600. His polite terminology probably appeared out of deference to his status as a member of the “greatest deliberative body in the world”.
The unbridled arrogance of the government leads to abusive, intrusive and oppressive ideas which are presented and promoted with noble sounding selling points.
After widespread decline, the Biden administration and the Treasury Department reduced the threshold proposed this week from $ 600 to $ 10,000. This is still ridiculously low – and only a diversionary tactic to disguise (1) an unacceptably authoritarian mindset about citizens’ right to privacy of their money; and (2) the fact that complex tax laws, not compliance with them, are the real problem.
It is the inherent nature of all governments to seek more control and power. This is as true today as it was a few centuries ago. And that is why the nature of our Constitution was then, and is now, to check against inevitable government attempts and excessive incursions.
Thank goodness for the Fourth Amendment, which reads: “The right of people to be safe in their persons, their homes, their papers and their belongings, from unreasonable searches and seizures, must not be violated. “
Democrats claim the goal here is to crack down on the top 1%, who they say don’t pay all the taxes they owe. Of course, the best way for bureaucrats to do this is to look at the bank accounts of the remaining 99%.
“Soaking the Rich” has traditionally sold well with middle- to low-income voters. This is how the 16th Amendment was ratified; voters were convinced that the only people affected would be the rich.
The Income Act of 1913 established a tax of 1% on any single filer earning more than $ 3,000, or $ 82,293 in today’s dollars. The next bracket – a 2 percent tax – didn’t start until income reached $ 20,000, the equivalent of $ 548,620 today.
The maximum rate of 7% only applied to income over $ 500,000, or adjusted for inflation, to anyone with 2021 income of $ 13,715,500.
At the time, only 3% of the American population was subject to income tax.
In 1913, a family earning just below the threshold paid no income tax. A family in 2021 earning the equivalent amount will pay a tax rate of 22%.
Today, about two in three American households have incomes below $ 100,000, and yet instead of being exempt, as originally baited and sold (the original exemption for married couples was $ 4,000 , or $ 109,724 today), income tax is levied on the very first dollar of income.
And, unlike the original income tax structure in which tax owed was subject to year-end, for today’s wage earners, tax is deducted from every paycheque. The government is preventing taxpayers from owning their tax dollars.
After just three years, Congress Democrats doubled the top tax rate to 15% in 1916 by promising that it only affected the super-rich with incomes above $ 2 million (49 , $ 4 million today).
So began the current tax amendment legislation that produced a labyrinth of laws, regulations, rulings, clarifications, and case law spanning over 75,000 pages – and expanding.
Biden & Co. attributes the tax gap to the IRS’s inability to punish fraud. Most rich Americans don’t break tax laws, they just employ accountants and lawyers to structure their finances in a way that legally minimizes their tax liability.
In other words, Democrats are now complaining about all the loopholes they’ve created in helping to build a monstrously complex tax code.
If the tax system has become “unfair” and “inequitable” then the obvious answer is to change it and rewrite the law to simplify it and fill in the gaps. Real tax reform has been overdue for decades.
Instead, Democrats want to demonize the rich in order to expand data collection to everyone.
Treasury Secretary Janet Yellen complains of a $ 7 trillion tax gap over the next decade that “robs the country of resources to fund its core priorities.”
But she wants to follow up annually – that is, 12 months – of aggregate bank account activity of just $ 10,000 or more. Why the threshold amount is still so low (a 16th million of the $ 160 billion in annual tax revenue the government hopes to recover) has not been explained, except with vague references to preventing “gambling.” system ”.
Even agreeing to exempt W2 employees, the proposed report still primarily targets small business owners and entrepreneurs rather than the top 1%.
As scandalous as it may be for the government to brazenly seek to dig deeper into every little bank account, it is more troubling that millions of Americans seem so cavalier about giving up their financial privacy.
Our precious inalienable rights have been bought and guaranteed time and time again by the blood, sweat, tears and supreme sacrifices of our fellow citizens who valued liberty and liberty above all earthly possessions.
If the tax gap has grown too large, it is time to finally demand a simplification of the tax code, not to give up more rights to privacy.
Dana D. Kelley is a freelance writer for Jonesboro.