In the movie Congo, Tim Curry plays a Romanian obsessed with finding the fabled diamond mines of King Solomon. When the group finds the mines, he is intrigued by the hieroglyphics on the wall. He deciphers them to learn that the phrase “we are watching you” is repeated over and over. The Freedom From Religion Foundation (FFRF) has settled a lawsuit with the IRS regarding political speech in Christian churches. The FFRF filed the suit alleging that the IRS was not monitoring the political speech out of the churches that the FFRF claimed violated the IRS rules on non-profits and politics. The foundation stated that churched were illegally electioneering and wanted the IRS to enforce the law.
Here is the rub. The Constitution of the United States in the first amendment specifically states the “Congress shall make no law respecting an establishment of religion or prohibit the free exercise thereof”. The FFRF maintain that they want to “promote the constitutional principle of separation between church and state” as stated on their website but there is not a mention of such a separation in the Constitution. What is truly unconstitutional is that a federal agency (IRS) has the power to grant tax-exempt status to non-profit organizations such as churches and FFRF and then place limitations on the Constitutionally protected free speech of such organizations. In this politically charged day and age any sermon delivered in a church that condemns homosexuality as a sin, promotes a pro-life message, or even criticizes the government for a law or policy that is bad for the nation could be considered politicking and could lead to revocation of tax-exempt status. The next question is just how will the IRS know if such speech is occurring? Will there be monitors sent to churches to document the sermons? Will pastors’ fourth amendment rights be violated to obtain sermon notes? When an agency has as much power as the IRS all citizens should be concerned. Those who supported the IRS targeting of Conservative and TEA Party groups should consider that under another administration, if the practice was continued, they could be the next target.
The only real and viable solution to this problem is to get rid of the current progressive tax code (which, by the way, is the cornerstone of Communism) with all the loopholes, deductions, and punitive tax brackets. The tax code as it stands today is so complicated that IRS agents have had trouble with the pages of code. What do we use as a replacement? After all, the government needs the tax revenue to operate. The idea of a flat tax has been floated for several years and has gained support of many middle class working families but Democrats claim it would hurt the poor by making them pay higher taxes but none of its detractors can site any study or economic model that proves this. Yet, the same Democrat party’s solution to spending is to raise taxes on the millionaires and billionaires (which they state start at the income level of $250,000.00) or raise corporate taxes. This always leads to economic stalling and higher prices on everything. At the same time, there are so many tax credits that the lowest income earners actually will get back more in a refund than the have paid in. Where do you think that money comes from? I have found that even college graduates do not understand the basics of taxation and income. Many have bought into the belief that taxing the “rich” will lead to prosperity for the poor. This could not be further from the truth.
The government does not have money, it must generate revenue. This is accomplished in the form of taxes, tariffs, fees, and fines, the largest source being, of course, taxes. Before the twentieth century there was not a permanent income tax. The main source of revenue for the federal government was tariffs on imported goods and excise tax on alcohol and tobacco. It was not until 1913 that the 16 amendment was passed that made the income tax permanent. Since then the code has grown from just effecting the top 1% to almost everyone seeing the deductions from their paychecks, even if they get it and more back the next year. Also added to the income tax are deductions for Medicare, FICA, and Social Security that are not refunded and are even matched by one’s employer. The Democrat party has stated that the “rich” should pay a higher percent of their income, up to 45% but the truth is even at 15% those who make more will pay more (15% of $1,000 is $150 while 15% of $10,000 is $1,500).
The most studied and modeled tax system proposed in recent years was actually developed by economists and has been shown in all of these to lead to a an economic boom, bring business back to the US, reduce unemployment, and raise wages. All of this that the current administration has promised but not delivered and the reason why is simply that they are using a failed system that always leads to worse economic circumstances. What is the system? First, what if I told you that the tax plan would allow you to keep every dollar you were paid except for deductions for retirement and health insurance? You would like that, right? Now, what if I told you that you would receive a check from the government each month based on the size of your family? Now I have your attention, don’t I? The plan was introduced by then Representative John Linder in 2008. It is called the Fair Tax and you can read about it here. In a nutshell it eliminates all payroll and corporate taxes and replaces them with a consumption tax at the retail level. This removes all embedded taxes in the products we buy reducing the price by about 23% and replaces that with about a 23% tax that you pay only when you by new items (no tax on resale or used items). With no corporate taxes, businesses will have incentive to locate in the US and without having to match Social Security and other deductions from employees, wages would have more room to expand. All in all, the Fair Tax would be the best and most sensible tax reform that would take the teeth out of the IRS’s “we are watching you” attitude.