No Income Tax




Ron Paul supports the elimination of the income tax and the Internal Revenue Service (IRS). He asserts that Congress had no power to impose a direct income tax and has introduced legislation to repeal of the 16th Amendment to the Constitution, which was ratified on February 3, 1913.

An income tax is the most degrading and totalitarian of all possible taxes. Its implementation wrongly suggests that the government owns the lives and labor of the citizens it is supposed to represent. Tellingly, “a heavy progressive or graduated income tax” is Plank #2 of the Communist Manifesto, which was written by Karl Marx and Friedrich Engels and first published in 1848.

To provide funding for the federal government, Ron Paul supports excise taxes, non-protectionist tariffs, massive cuts in spending.

Ron Paul discusses the income tax and the “FAIR Tax” in May 2007:

On November 20, 2008 Ron Paul said in a New York Times / Freakonomics interview:

“I want to abolish the income tax, but I don’t want to replace it with anything. About 45 percent of all federal revenue comes from the personal income tax. That means that about 55 percent — over half of all revenue — comes from other sources, like excise taxes, fees, and corporate taxes.

We could eliminate the income tax, replace it with nothing, and still fund the same level of big government we had in the late 1990s. We don’t need to “replace” the income tax at all. I see a consumption tax as being a little better than the personal income tax, and I would vote for the Fair-Tax if it came up in the House of Representatives, but it is not my goal. We can do better.”

On May 7, 2001, Ron Paul wrote the following column:

The Case Against the Income Tax

Could America exist without an income tax? The idea seems radical, yet in truth America did just fine without a federal income tax for the first 126 years of its history. Prior to 1913, the government operated with revenues raised through tariffs, excise taxes, and property taxes, without ever touching a worker’s paycheck. In the late 1800s, when Congress first attempted to impose an income tax, the notion of taxing a citizen’s hard work was considered radical! Public outcry ensued; more importantly, the Supreme Court ruled the income tax unconstitutional. Only with passage of the 16th Amendment did Congress gain the ability to tax the productive endeavors of its citizens.

Yet don’t we need an income tax to fund the important functions of the federal government? You may be surprised to know that the income tax accounts for only approximately one-third of federal revenue. Only 10 years ago, the federal budget was roughly one-third less than it is today. Surely we could find ways to cut spending back to 1990 levels, especially when the Treasury has single year tax surpluses for the past several years. So perhaps the idea of an America without an income tax is not so radical after all.

The harmful effects of the income tax are obvious. First and foremost, it has enabled government to expand far beyond its proper constitutional limits, regulating virtually every aspect of our lives. It has given government a claim on our lives and work, destroying our privacy in the process. It takes billions of dollars out of the legitimate private economy, with most Americans giving more than a third of everything they make to the federal government. This economic drain destroys jobs and penalizes productive behavior. The ridiculous complexity of the tax laws makes compliance a nightmare for both individuals and businesses. All things considered, our Founders would be dismayed by the income tax mess and the tragic loss of liberty which results.

America without an income tax would be far more prosperous and far more free, but we must be prepared to fight to regain the liberty we have lost incrementally over the past century. I recently introduced “The Liberty Amendment,” legislation which would repeal the 16th Amendment and effectively abolish the income tax. I truly believe that real tax reform, reform that so many frustrated Americans desperately want, requires bold legislation that challenges the Washington mind set. Congress talks about reform, but the current tax debate really involves nothing of substance. Both parties are content to continue tinkering with the edges of the tax code to please various special interests. The Liberty Amendment is an attempt to eliminate the system altogether, forcing Congress to find a simple and fair way to collect limited federal revenues. Most of all, the Liberty Amendment is an initiative aimed at reducing the size and scope of the federal government.

Is it impossible to end the income tax? I don’t believe so. In fact, I believe a serious groundswell movement of disaffected taxpayers is growing in this country. Millions of Americans are fed up with the current tax system, and they will bring pressure on Congress. Some sidestep Congress completely, bringing legal challenges questioning the validity of the tax code and the 16th Amendment itself. Ultimately, the Liberty Amendment could serve as a flashpoint for these millions of voices.

Ron Paul introduced the Liberty Amendment in 1998, 1999, 2003, 2005, 2007 and 2009. It is currently know as H. J. RES. 48 and has 2 cosponsors, Roscoe G. Bartlett (MD-6) and Don Young (AK). Here is the text of the proposed amendment:

Liberty Amendment

Section 1. The Government of the United States shall not engage in any business, professional, commercial, financial, or industrial enterprise except as specified in the Constitution.

Section 2. The constitution or laws of any State, or the laws of the United States, shall not be subject to the terms of any foreign or domestic agreement which would abrogate this amendment.

Section 3. The activities of the United States Government which violate the intent and purposes of this amendment shall, within a period of three years from the date of the ratification of this amendment, be liquidated and the properties and facilities affected shall be sold.

Section 4. Three years after the ratification of this amendment the sixteenth article of amendments to the Constitution of the United States shall stand repealed and thereafter Congress shall not levy taxes on personal incomes, estates, and gifts.’.

On April 30, 2009 Ron Paul introduced the Liberty Amendment with the following speech:

Ron Paul: Madam Speaker, I am pleased to introduce the Liberty Amendment, which repeals the 16th Amendment, thus paving the way for real change in the way government collects and spends the people’s hard-earned money. The Liberty Amendment also explicitly forbids the Federal government from performing any action not explicitly authorized by the United States Constitution.

The 16th Amendment gives the Federal government a direct claim on the lives of American citizens by enabling Congress to levy a direct income tax on individuals. Until the passage of the 16th amendment, the Supreme Court had consistently held that Congress had no power to impose an income tax.

Income taxes are responsible for the transformation of the Federal government from one of limited powers into a vast leviathan whose tentacles reach into almost every aspect of American life. Thanks to the income tax, today the Federal government routinely invades our privacy, and penalizes our every endeavor.

The Founding Fathers realized that “the power to tax is the power to destroy,” which is why they did not give the Federal government the power to impose an income tax. Needless to say, the Founders would be horrified to know that Americans today give more than a third of their income to the Federal government.

Income taxes not only diminish liberty, they retard economic growth by discouraging work and production. Our current tax system also forces Americans to waste valuable time and money on compliance with an ever-more complex tax code. The increased interest in flat-tax and national sales tax proposals, as well as the increasing number of small businesses that question the Internal Revenue Service’s (IRS) “withholding” system provides further proof that America is tired of the labyrinthine tax code. Americans are also increasingly fed up with an IRS that continues to ride roughshod over their civil liberties, despite recent “pro-taxpayer” reforms.

Madam Speaker, America survived and prospered for 140 years without an income tax, and with a Federal government that generally adhered to strictly constitutional functions, operating with modest excise revenues. The income tax opened the door to the era (and errors) of Big Government. I hope my colleagues will help close that door by cosponsoring the Liberty Amendment.



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770 Comments:

  1. Two issues:
    1. Income taxes - are they valid…questionable?
    2. Income tax complexity - absolutely insane…no question on this one at all!

    I have been looking for a forum that has any power or cohesiveness to make a real impact on the insanely complicated racket of income tax filing and haven't been able to find anything? Why is this?

    I have not marched for anything in my 57 years of life (although have been frustrated, angry, etc)…but I would spend precious retirement savings to march/fight the absolutely absurd, complex, stupid (X&(%$) way our government requires us to not only pay but fill out forms that most PHDs would have (and sure they do) trouble understanding???

    I left a very good paying job because I finally decided that paying high taxes and to add injury to insult either filling out the tax forms every year or hiring someone else (and paying them dearly) to do this was worth my not getting a paycheck any longer.

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  8. Ron Paul - The Best Income Tax Rate is 0% : http://www.youtube.com/watch?v=EwwSaNOWkx0

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  9. the local gas tax and the local property taxes pay for the roads and the highways not the federal income tax. 100 percent of the money from the income tax goes to the federal reserve to pay intrest on the debt. Foreigners own all the stock in the federal reserve.

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    • The federal government pays interest on its debt in exactly the same manner that it makes any other type of payment: by sending INSTRUCTIONS to credit bank accounts. It can do this infinitely. No secret cabals, taxpayers, children or grandchildren involved.

      The federal government has no money. Why would it? It creates its sovereign currency, the dollar, ad hoc, when it pays bills. Whenever the federal government sends a check, in payment of a bill, that check is not money. The federal government, not having money, can send no money.

      You never will see a number showing how much money the federal government owns, but you always will see how much the federal government supposedly owes.

      When John Boehner famously lied, “Let’s be honest. We’re broke,” he was referring to the fact that the government supposedly owes trillions, but has no money. In fact, that always is the case for a Monetarily Sovereign nation. It creates its sovereign currency ad hoc, so at any moment in time, its debts far exceed its holdings of money. It has no holdings of money.

      A federal government check merely instructs a creditor’s bank to increase the number in the creditor’s checking account. It does not deliver dollars, since dollars, having no physical existence, cannot be delivered.

      At the same time the bank increases the number in the creditor’s account, corresponding federal accounts are decreased, but none of those accounts are part of the money supply. So when you (or your employer) "send" tax money to the federal government — or more properly, send your instructions in the form of a check or wire — the dollars that existed only as numbers in your checking account are destroyed. They cease to be part of the money supply.

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  11. America had its freest and happiest days before the Communist-inspired progressives rammed through the income tax in the earliest 20th century. Hopefully in the 21st century America will wake up from the progressive nightmare and overthrow the Communist program -- hopefully by peaceful means, if that is still possible. I think it is possible, it just takes enough voters who make abolishing the IRS and the income tax their priority.

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  13. Let me dissect his argument.

    Firstly, in the second paragraph, income tax is described as implying that the government somehow owns the labor of its citizens. This is fundamentally untrue. An income tax is not a matter of owning people or their labor, it is intended to compensate for the services that the government provides. Roads are a good example. If you own a trucking business and you ship goods across the US, then you use roads and other government built infrastructure. This means that your income is dependent on the government. If there were no roads, you would have no way of shipping your goods. Income tax is designed to pay for the government's expenses such as building roads.

    Secondly, in that same paragraph, it is said that income tax is mentioned "tellingly" in the communist manifesto. This is a cheap trick to get people who read this to have a negative reaction to income tax as an idea. The communist manifesto mentions many other things that even Ron Paul admits are good. Peace, for instance. The communists also state that they "wish to attain their ends by peaceful means". If you wish to argue against something, argue against the thing itself, not the groups who support it.

    Finally, the article gets into details. Ron Paul supports excise taxes, or in other words taxes on commerce. While this sounds nice, there are some fundamental problems with this idea. Firstly, poor people spend a greater percentage of their income as they have to use every penny of it on necessities. The rich, on the other hand, spend a smaller percentage, meaning that the tax will affect them more. This is one of the most unfair tax systems as the poor, who can't afford to pay as much, are forced to lose more of their income than the super-wealthy who have little use for the majority of their income. Even an equal income tax for all people would be better than this.

    The next fallacy in his argument is that the government has gone "beyond its constitutional limit". This is a problem. If you base your argument around the opinions of important people as opposed to facts, then you will run into many problems. The founding fathers had slaves and the constitution allows slavery. There are times when people must make decisions for themselves and not always follow others.

    Big government is not a problem. It is not anti-american. It merely is the government stepping in to fix things when the government is the only thing that can step in. When gas companies used lead in their gas, the government stepped in and stopped this. The companies objected because they would lose profits, but it saved the public's heath.

    I hope that anyone who reads this will reread Ron Paul's argument so that they can decide for themselves whether or not income tax is right. In a true democracy, debate is essential and that is what I am trying to provide. I have friends who are libertarian. We argue. In the end we make up our own minds on subjects instead of being influences by politicians.

    I hope this has been useful.

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    Hotly debated. What do you think? Thumb up 9 Thumb down 35

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    Great website, keep it up!

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