The tax code in Kentucky and on the federal level is a potent weapon for governments to use to manipulate, coerce, to punish, and to reward selectively.
In Frankfort, Rep. Bill Farmer is just about ready to release a bill that would dramatically reduce the state's ability to abuse citizens.
Federal taxation has been a big issue in the presidential race, but not nearly big enough. An upcoming movie, An Inconvenient Tax, may help. Here is the trailer:
Saturday, November 1, 2008
Will Tuesday's election be about taxes?
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Granted, the tax code is a complicated monstrosity. Value added or flat taxes are not the answer. Restricting them to consumption would require a tax rate of about 27% or higher. To be fair, taxes would have to be proportional.
Better yet why not revisit Alexander Hamilton's proportional tax on the movement of all moneys? In Federalist Paper 12, he wrote:
"The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of money in circulation, and to the celerity with which it circulates. Commerce, contributing to both these objects, must of necessity render the payment of taxes easier, and facilitate the requisite supplies to the treasury."
This is an prescient idea that awaited the advent of computers. Thus, every time banks move laundered drug money from one account to another, there would be a proportional transaction fee, or toll tax. Likewise, mortgages that are sold and resold would pay a proportional transaction fee.
Every time a company makes payroll, it would pay a toll tax. Likewise, money withdrawn from an ATM would collect a proportional toll tax. A proportional tax could probably max out at 5% and would continue on as a flat tax on amounts above where to 5% rate begins.
Such a tax could do what Thomas Jefferson envisioned the Constitution to require. He wrote:
"The care of human life and happiness and not their destruction is the first and only legitimate object of good government."
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