I am not totally opposed to taxes at a philosophical level (render unto Caesar what is Caesar's and unto God what is God's) but I am opposed to government expansion, which is what US taxes currently represent. I am also opposed to governments using taxes to manipulate and control it's citizens. Obamacare was ruled constitutional because it was enforced through a tax, reasoning that i strongly disagree with. Taxes should be in place to raise needed revenue, ideally proportionally to benefits received, not to artificially incentivize certain actions. For example gasoline taxes should be used to support highway infrastructure, and the tax rate should be determined by the needs of the roads, not increased as high as the public will stand for, to increase revenue and discourage fossil fuel use.
Rand Paul recently proposed a total reworking of the US tax system. Although his new plan is not perfect, it is simpler than the current system. It tries to remove most of the loopholes, and change the tax rate to a fixed percentage. These are two separate changes, that are independent. I favor simplifying the rules in both areas, but the tax rate isn't very complicated, the tax tables just distract from the the fact that the tax rate increases as income increases. The loopholes and corner cases are the areas with the most need for improvement. The plan would eliminate complex depreciation and amortization calculations from the business world, and most of the complexity from personal investments. It would probably put a few accountants out of work, but I have no problem eliminating jobs that were only artificially useful in the first place.
Interesting as well are the loopholes he leaves in place, including the mortgage deduction. Interest is tax deductible, which is the government incentivizing borrowing. From a Biblical perspective, lending money with interest is prohibited, which seems to have been long forgotten by modern society. I am not saying we should ban interest, but we shouldn't be incentivizing and encouraging it. This is the single main loophole that remains in Paul's proposal, which I see no reason for, besides politics.
The other half of the plan is to flatten the tax rate to 15%. Regardless of the effect it would have on Federal revenue, that is not longer linked to how much the government is spending. I favor cutting government spending drastically, but due to the national debt, we probably shouldn't decrease revenues. So I am not pushing to decrease the tax rates, just decrease the complexity and waste.
So the rate and the flat percentage will get lots of debate before the whole idea is canned, but the simplification is what we really need. And some common sense and basic budgeting skills in Washington would be helpful as well. Until then our tax money, regardless of the rates we pay, is just being flushed down the drain.
