Know Your Rights/ These Are Your Rights/ All Four Of 'Em

The Republican Study Committee led by Jeb Hensarling (whom I shower with praise in the new issue of Reason) is rolling out an "American Taxpayers' Bill of Rights" - National Review's Stephen Spruiell and blogger Fausta have some of the details. The PDF document is here.

1. Taxpayers have a right to have a federal government that does not grow beyond their ability to pay for it.

Hrm. We've heard this before, and it'd be nice for the RSC to start proposing some of those sweet alternative budgets. Maybe the whole party will support them this time.

2. Taxpayers have a right to receive back each dollar that they entrust to the government for their retirement.

Here's the difference between being in the majority and the minority. In the majority, Republicans could propose Jim DeMint's "GROW Accounts" - hypothetical individual accounts for everyone which would sop up each year's Social Security surplus, preventing that from being spent on other programs. In the minority, they… are noncommittal.

3. Taxpayers have a right to expect the government to balance the budget without having their taxes raised.

Hey, this is something the GOP has yet to screw up this decade! The National GOP, I mean. (The tax-raising part, not the balancing part.)

4. Taxpayers have a right to a simple, fair tax code that they can understand.

Ugh - here's the issue where Republicans sound as muddled as Democrats on Iraq. What sort of reform are we talking about? Flat tax? Consumption tax? The "Fair Flat Tax"?

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Comments

[Ramon Rozas III]

Boy, am I glad that Republicans want to shrink the budget and reduce the deficit. If only they had been in power for the last ten years!

[Dan T.]

1. Taxpayers have a right to have a federal government that does not grow beyond their ability to pay for it.

It would be impossible to have a federal government that we couldn't pay for.

2. Taxpayers have a right to receive back each dollar that they entrust to the government for their retirement.
The way it works right now, we don't entrust any dollars to the government for our retirement. We pay social security taxes to fund other people's retirements (basically).

3. Taxpayers have a right to expect the government to balance the budget without having their taxes raised.
That's stupid on its face. This is saying that we can't raise taxes even if its determined that it would be worth it?

4. Taxpayers have a right to a simple, fair tax code that they can understand.

Why? I would imagine there's no way a tax code can be both simple and fair.

[Dan T.]

Sorry, here's the post with italics done correctly!

1. Taxpayers have a right to have a federal government that does not grow beyond their ability to pay for it.

It would be impossible to have a federal government that we couldn't pay for.

2. Taxpayers have a right to receive back each dollar that they entrust to the government for their retirement.

The way it works right now, we don't entrust any dollars to the government for our retirement. We pay social security taxes to fund other people's retirements (basically).

3. Taxpayers have a right to expect the government to balance the budget without having their taxes raised.

That's stupid on its face. This is saying that we can't raise taxes even if its determined that it would be worth it?

4. Taxpayers have a right to a simple, fair tax code that they can understand.

Why? I would imagine there's no way a tax code can be both simple and fair.

[Solitudinarian]

I would imagine there's no way a tax code can be both simple and fair.

Either you are using a vastly different definition of the word fair or you have your imagination on a pretty short leash.

[Ramon Rozas III]

Dan T: I agree with most of your post(s), but as to point 4: I suppose it depends on what's "fair" and "simple." Much of the complexity of the modern tax code comes not from its progressiveness, but from the gov'ts use of the Code to encourage actions it likes (e.g., home ownership) and discourage things it doesn't like. A tax code may start simple, but pretty soon all sorts of loopholes may get put in by causes which, individually, sound good. Charities want an exemption for charitable giving, etc.

[Guy Montag]

So, there exists another Clash fan on this earth besides me and Emmanuel Goldstein?

Groovy!

[Warren]

I propose a currency tax. The federal government simply prints the money it wants to spend and everybody pays in the resulting inflation. How's that for 'simple and fair'.

[Dan T.]

Either you are using a vastly different definition of the word fair or you have your imagination on a pretty short leash.

It is true that "fair" is a very subjective term - people cannot even agree as to whether it's fair for everybody to pay the same tax or fair for people to pay more tax if they earn more money.

I guess the simpliest way to assess taxes is to take the total government budget, divide it by the number of people in the country, and that's the amount each person owes.

This would probably result in many people owing more in tax than what they make, however, so that probably isn't going to pass the "fairness" test in anybody's mind. So it gets more complex from there.

[jhupp]

Wait, Dave's comment on number 3 isn't serious, is it?

[pig-dog]

It would be much easier for legislators to be fair to taxpayers if, ahem, certain special interests didn't force them to leave enormous mountains of cash on the table.

[VM]

How about starting with the Alternative Minimum Tax? then go from there!

[Warren]

jupp,
My guess is that Dave doesn't consider deficit spending a tax.

[Dan T.]

Much of the complexity of the modern tax code comes not from its progressiveness, but from the gov'ts use of the Code to encourage actions it likes (e.g., home ownership) and discourage things it doesn't like. A tax code may start simple, but pretty soon all sorts of loopholes may get put in by causes which, individually, sound good. Charities want an exemption for charitable giving, etc.

That is true, but it's not necessarily a bad idea for a government to levy taxes to encourage or discourage certain behaviors.

[Legate Damar]

4. Taxpayers have a right to a simple, fair tax code that they can understand.

Why? I would imagine there's no way a tax code can be both simple and fair.

Not to pick on you Dan (and how often does THAT phrase appear in HnR?) but how are "fair" and "byzantine" related?

The reason this isn't a "Dan T" related issue is that the definition of "fair" is a useless item. It's a slippery word.
I used to debate with a coworker who favored massive wealth distribution. Once I had worked my way through basic economics and convinced him that his plan would stagnate the economy and quality of life improvements, he still had one argument: "Society should uphold its own vision of social justice." Now obviously we argued a lot about the nature of social justice, and it was after about the fourth very circular argument that I realized that to him, "justice" meant economic equality. The two words were inextricably linked. Why? Because "justice", like "fair", is a word that is universally understood but individually defined.

So, Dan, why are "fair" and "simple" opposites? As the code gets more complex, more judgements are made: "Home owners deserve a tax deduction." "The working poor deserve a tax credit." "All wealth above $200K/year should be taxed at 40%." The more complex the code, the more of these judgements are made. Is "fair" such a balanced, nuanced concept that it requires 40000 pages? And is that your view, or society's?

Anyway, including "fair" in #4 is pure PR and not a true "right" in any way, shape, or form.

[Legate Damar]

ARRR matey, I got beat to the punch.

Land lubbers.

[Xaq Fixx]

Guy Montag, you aren't alone, I had to put on on 'Combat Rock' as soon as I read this headline.

[Xaaba Zu]

Hey, apparently I have a right to food money. So who's going to buy me lunch today?

[tarran]

Dan, some counterarguments

1) It is possible to have a government we cannot pay for. All that has to happen is the government's central bank prints money to be spent by the government. Believe me, I know from my family's experience that's a bad thing

2) I agree. Currently I entrust no money to the government for my retirement. They take a portion of my earnings by force (about 15 cents of every dollar), and claim they'll give me a whole bunch of money later on if I should live long enough. Needless to say, I don't trust them to fullfill their "promise"

3) I don't think it is ever worthwile to raise taxes, at least not for the victims of the extortion. Of course, a mugger has a different take on what's "worth" it than the victim.

4) You are right in that a fair tax code is impossible. There is no way to rob a population "fairly". On the other hand, simple tax code is better than a complex tax code in that compliance is easier - meaning under a complex system more intelligent people stop producing goods and services and start figuring out what tax they "owe" and how to evade it than under a simple system. It also reduces the differential benefits of those with political connections. For example, if I own a large company, I can lobby some exemption to be written into the tax code that benefits me personally, and then resist attempts to extend that benefit to my competitors. A simple code spreads the pain around more.

Thus a complex tax code will result in more wealth destruction and more political control of the economy than under a simple tax code stealing the same amount of revenue.

[Rhywun]

It would be impossible to have a federal government that we couldn't pay for.

I would say it's very unlikely - but certainly possible.

Taxpayers have a right to a simple, fair tax code that they can understand.

I have no problem with this statement as part of a "Bill of Rights". Clearly the details are meant to be worked out later. For now, just getting the government to acknowledge the concept as stated is a huge enough hurdle.

[Rhywun]

That is true, but it's not necessarily a bad idea for a government to levy taxes to encourage or discourage certain behaviors.

I'm coming to believe that it necessarily IS a bad idea - because it inevitably leads to the mess we have now.

[LarryA]

It would be impossible to have a federal government that we couldn't pay for.

In the long run this is true, as sooner or later inflation wipes out the currency, the government falls, and folks can start the rebuilding process from scratch. Any number of countries have tried, however. And have succeeded until the wheels came off. Note: Scratch is not a pleasant lifestyle.

The way it works right now, we don't entrust any dollars to the government for our retirement. We pay social security taxes to fund other people's retirements (basically).

True. And the government lies to us, telling us we have a SS "account" and all the dollars are in a SS "trust fund."

The real problem I have with the Rs "receive back each dollar" statement is that an investment for retirement would return each dollar plus interest.

This is saying that we can't raise taxes even if its determined that it would be worth it?

It isn't worth it. Government should be doing much less, at much lower cost.

I would imagine there's no way a tax code can be both simple and fair.

Start with the principle that the purpose of the tax code is revenue, not social engineering. Eliminate all the deductions designed to help any subset of U.S. citizens no matter how needy, worthy, or misguided they appear to be.

[Dan T.]

1) It is possible to have a government we cannot pay for. All that has to happen is the government's central bank prints money to be spent by the government. Believe me, I know from my family's experience that's a bad thing

It's a bad thing because it doesn't work. That's what I mean

2) I agree. Currently I entrust no money to the government for my retirement. They take a portion of my earnings by force (about 15 cents of every dollar), and claim they'll give me a whole bunch of money later on if I should live long enough. Needless to say, I don't trust them to fullfill their "promise"

Why? It's been fulfilled for many decades now.

3) I don't think it is ever worthwile to raise taxes, at least not for the victims of the extortion. Of course, a mugger has a different take on what's "worth" it than the victim.

That's nonsense - your taxes buy you something (namely, civilization) so to compared being taxed to being extorted or mugged is silly. That's why so many people want to live in places where taxes are high (cities). Higher taxes are worth it if they provide a higher quality of life.

4) You are right in that a fair tax code is impossible. There is no way to rob a population "fairly".

Back to this theme again I see. But unless you live on a deserted island, I bet you really don't believe it!

[henry]

"Murder is a crime,
unless it was done
by a police mannnnn...!"

See, Joe & the boys beat Radley Balko to the punch 25 years ago!

[Ramon Rozas III]

Dan T: while we may disagree on whether the gov't should encourage certain things, I think the tax code is not necessarily a good way to do it. Every time an otherwise worthwhile exemption is created, eventually very bright accountants use it to create a tax shelter that later seems "unfair" because a wealthy entity is using it to "avoid" taxes.

[Solitudinarian]

Back to this theme again I see. But unless you live on a deserted island, I bet you really don't believe it!

This "theme" is pretty integral to the subject at hand. And I, for one, do believe it - but we can use "expropriation" instead of "rob", if you prefer.

[P Brooks]

Dan-

Go find a copy of "The Law and the Profits" by Dr Parkinson, and read it.

[Guy Montag]

Guy Montag, you aren't alone, I had to put on on 'Combat Rock' as soon as I read this headline.

I was playing it virtually in my head 🙂

It got interrupted by gunfire when I went back to Jacob's DC gun story.

[R C Dean]

See, where I come from something that isn't simple can't be fair. Fairness is essentially subjective, meaning that, by definition, something isn't understandable can't be fair.

Complexity doesn't eliminate arbitrariness, it just moves it around.

[Dan T.]

This "theme" is pretty integral to the subject at hand. And I, for one, do believe it - but we can use "expropriation" instead of "rob", if you prefer.

No - if you honestly feel that taxation is equal to theft, you must be an anarchist who would prefer no government at all (or an admitted thief, since as a member of civilization you benefit from taxes paid by others).

Taxes really are the price of civilization - that's why you can't find the latter without the former.

[greg]

One of the more frustrating conversations regarding fairness was one that I had with my boss about golf.
I had just started playing and was pretty lousy, but because we used handicaps I was beating may of the seasoned players. He thought this fit his definition of fair (since everyone has a chance of beating everyone else).

I disagreed thinking that the use of handicaps was unfair to the better players in the league.

We never could come to an agreement of what "fair" meant in this context.

Apply this same thinking to the concept of taxation and I saw very quickly why many of my libertarian arguments weren't gaining traction with people.

[Will Allen]

The word "fair" is among the most useless in the english language. It literally can mean anything, depending on the vantage point of the observer, and thus has no meaning. As soon as the polemicist introduces the goal of "fairness" in his argument, one can reliably ignore anything that is said afterwords.

Better to just use the word "freedom", and then make an argument as to why it is critically necessary to restrict that quality in any given circumstance. Better, that is, if one has the goal of maximizing total happiness. If one has the goal of getting over on one's fellow citizens, thus maximizing one's individual happiness, then one starts jabbering about what is "fair".

[Rhywun]

I had just started playing and was pretty lousy, but because we used handicaps

A lot of people don't see life as a "competition" to get ahead.

[Will Allen]

greg, the handicap system in golf merely promotes more interesting gambling opportunities. However, it does not work as well in the instance of the novice who is undergoing rapid improvement, since his previous scores are not a good predictor of future scores. For the guy who has been lousy for a long time though, the 30 handicap he carries really does allow him to have an interesting wager (interesting for both parties) with the guy who carries a 5. Most 5 handicaps recognize the potential drawbacks to wagering with the new golfer who has a very large handicaps. Fair or unfair, the world ain't perfect. The key is not force anybody into an imperfect arrangement.

[Ah, jeez]

"Taxes really are the price of civilization - that's why you can't find the latter without the former."

Wow, I can play that, too. Dog shit on the sidewalks really is the price of civilization - that's why you can't find the latter without the former.

[John Kindley]

Fundamental Taxpayer Right #1:

No one should have to pay any tax on those fruits of their labor that are needed to establish and maintain a decent and reasonably secure and independent life.

Granted, what amount of resources that standard constitutes in modern America is debatable. I would say around $50k per year should be income tax free. (Maybe the standard should be keyed to average or median income.) Admittedly, those making less than $50k do obtain some "benefits" from government that some would say should be forcibly paid for, but nowhere near the benefits that the wealthy and especially the ultra-wealthy obtain from government and the economic infrastructure maintained by government. And again, we should look more closely at and recognize the unacceptability of the injustice represented by taxing from someone the "necessaries of life" (more broadly construed than simply subsisting paycheck to paycheck, living in a hut on a barely adequate diet, with no money left over for savings or any leisure activities). Finally, those libertarians with purist ideological tendencies that they feel mandate against progressiveness in taxation should consider libertarian Thomas Paine's argument in Agrarian Justice, in which he proposed paying every citizen upon attaining the age of 21, as a matter of justice rather than charity, a certain sum (a modern version of this proposal, The Stakeholder Society, suggests the sum of $80k) as compensation for the loss, caused by the cultivation of land and consequent system of land ownership, of every person's natural birthright to joint proprietorship in the earth (as would have been enjoyed the natural state and as in fact enjoyed by Native Americans and frontiersman for much of our history and pre-history). If we're not comfortable with government making such cash payments outright, we can at least recognize the principle and recognize that the government should not tax at all a citizen's labors to achieve financial security and independence.

[Will Allen]

Well, if the clock could be turned back, the Georgist method of assessing all tax revenues from real estate assumed to be in an unimproved state has has some wisdom to it, in that it only taxes that which has not benefitted from a citizen's labor and ingenuity. I doubt that John Adams could have convinced Thomas Jefferson to agree to that, however.

[Libertreee]

John Kindley wrote:
recognize that the government should not tax at all a citizen's labors to achieve financial security and independence.

But, despite the naysayers on this list who never read the actual tax code that they discuss, or the relevant Supreme Ct cases (not lower court cases), this IS the case today.

A citizen's (citizen of the 50 states of the Union, that is)labors (ie wages, rents, interest, commissions, etc) are not taxed by the income tax as writen in Title 26. Unless, perhaps, the "citizen" is a. a corporation, or b. has substantial foreign earned income. The reason is that the Constitution (no, I am not a Constitutionalist, I recognize the document is severely flawed, but it does have it's good points) has two major taxing clauses that no Amendment can overturn: Direct taxes on property have to be apportioned, and all other taxes are excise taxes, which must be uniform.

The Steve Forbes Republicans are full of hot air because they are proposing a reform of only the outward appearance of the so called income tax, i.e. the return document...and the so called deduction rules (which deductions are really all the 1040 form is for, a worksheet to figure deductions) they are not talking about the right to tax the property of the citizens as defined above at all...

This thread also ties into the Parker gun case...I understand that the dissenting opinion states that the people of Washington DC do not have Constitutionally protected rights because the Constitution only applies to the states of the Union...very good argument, if that is true...The people of Washington DC suffered under an income tax long before the 16th Amendment was passed, nicknamed the "Normal Tax" as it was so called in the code...since they are governed directly by the Congress, they have no right to the rule of apportionment to protect their property from taxation by the Feds.

[Son of a!]

THERE ARE FOUR RIGHTS!

[Fang (VM)]

1) Fear
2) Surprise
3) Ruthless efficiency
4) An almost fanatical devotion to the pope

[Ironchef]

Dan. T,

We pay taxes for "civilization"?!

Dubya said we're bringing Democracy to Iraq, and that's paid for by my taxes. I guess you two have more in common than you realized.

[Mike Laursen]

I agree that part of the taxes we pay goes to advance civilization: courts, road, sewers, and so on. We're also paying for a heck of a lot of stuff that isn't doing civilized humanity any good: spreading ill will in foreign lands, subsidizing the overproduction of corn, blocking free trade, picking up Congressman Sensenbrenner's lunch tab, and many other nefarious things.

Many vital parts of our civilization are not being provided by government nor taxation: iPods, hip hop, Lutheran pancake breakfasts, Halloween, etc. And I won't even try to convince you that some aspects of our civilization that are being provided by the government don't have to be provided by the government.

[rob]

"A lot of people don't see life as a 'competition' to get ahead."

People who don't see life as an opportunity to get ahead always remind me of the Grasshopper in the Ant and the Grasshopper fable:

"The fable concerns a grasshopper or cricket who has spent the warm months singing away while the ant (or ants in some editions) worked to store up food for winter. After the winter has come, the grasshopper finds itself dying of hunger, and upon asking the ant for food is only rebuked for its idleness. The story is used to teach the virtues of hard work and saving, and the perils of improvidence. Some versions of the fable state a moral at the end, along the lines of:

Idleness brings want."

The best part of the wiki entry is here, tho:

"Bowdlerized, happier versions of the fable show the ants taking pity and giving the grasshopper some food.[citation needed]
In a 1934 animated short subject produced by Walt Disney, the Queen of the Ants decrees that the grasshopper may stay in the ant colony, but he must play his fiddle in return for his room and board. He agrees to this arrangement, and the ant tunnels become a grand ballroom where all the ants happily dance to the music of the grasshopper, who finally learns that he needs to make himself useful. Notably, this short introduced the song 'The World Owes Me a Livin'', which would later become a signature tune for Goofy."

How appropriate is it that the "The World Owes Me a Livin'" is the signature song for GOOFY???

Heh!

Even more appropriate: "Elements of the fable were loosely adapted as part of the storyline of the Pixar film A Bug's Life. In this instance, though, there are multiple grasshoppers, and they act as Mafia-like tyrants who demand a tribute of food from the ant colony."

http://en.wikipedia.org/wiki/The_Ant_and_the_Grasshopper

[Single Issue Voter]

"So, there exists another Clash fan on this earth besides me and Emmanuel Goldstein?

Groovy!"

They were the greatest upper-middle class Marxist
Rock band of all time.

[Guy Montag]

They were the greatest upper-middle class Marxist
Rock band of all time.

Ah, so that is how I migrated to Rage Against the Machine 🙂

[pigwiggle]

pig-dog

Hell yeah; another pig themed screen name. You know, I doubted my choice for a while. Tossed around other names, weirdbeard, Lance Manly, and some others (hands off folks). But this's solid. Nice.

[pigwiggle]

That is true, but it's not necessarily a bad idea for a government to levy taxes to encourage or discourage certain behaviors.

Oh Dan. You didn't? That is it. I'm going to track you down and, for every time you have posted to this board how libertarian ideals "are nice but really don't work out in the real world", I'm going to cram a 1040, schedule A and B, down your hypocritical gullet. Worksheets and all.