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November 20, 2024 | Simplify the Tax Code
Martin Armstrong
The incoming Department of Government Efficiency (DOGE) under Elon Musk and Vivek Ramaswamy is tackling a serious problem – the complex tax code. Donald Trump has also expressed a keen interest on simplifying the process and fixing our “broken tax code.”
The Internal Revenue Service was multiplied and armed with weapons under Biden-Harris. The administration desperately needed funding for its continuous spending and aid packages, and the American people were an easy target. One can hope that the incoming Trump Administration will help to dismantle the IRS that creates criminals out of everyday citizens who spend weeks if not months trying to determine how much they owe. The government doesn’t seem to know how much they need to extort from citizens, but rest assured, they will hunt you down if you under or overpay.
The code is deliberately confusing. “In 1955, there were less than 1.5 million words in the U.S. Tax Code. Today, there are more than 16 million words. Because of this complexity, Americans collectively spend 6.5 billion hours preparing and filing their taxes each year. This must be simplified,” DOGE wrote on its new X account.
DOGE has proposed creating an app for Americans to pay their taxes. That is all good and well but until the code is drastically simplified, I do not see how filing on your phone could streamline the process. Still, TurboTax shares fell 5.1% after the rumors broke as did H&R Block by 8.2%.
I sent Congress an extensive proposal on tax reform in 1996, which you may read here.
Taxation is indeed a much broader issue than merely federal. State and local governments have been raising taxes at an unseen pace. The cost of government as measured by total revenues as a percent of the total of GDP is a key factor in determining our quality of life, and as we have seen, our quality of life has been drastically reduced as government spending rises. The people cannot possibly be expected to foot this endless bill. The Founding Fathers of the United States specifically prohibited direct taxation, such as any form of an income tax.
One of the primary things is that the tax rate should be cast in stone and it should not change for every election. No one, on a personal level, would go sign a lease on an apartment where the lease said the landlord can change your rent at any time he wants if he spent too much money for himself. . A contract is a contract and you’re not going to have stability until you have something set in stone. A lot of countries have attracted capital by doing precisely this. If you go there and set up a plant, they guarantee not to increase taxes for 20, 30, 40 years. If you’re going to do a business plan then you need to know what your costs are. It can’t be maybe $1 mill this year and next year it’s 25% more. Business plans don’t work like that. The politicians need to just cast it in stone and that’s it; take it off the table. Stop the rhetoric. They’re not going to create jobs without that. Why should anyone build a plant in the U.S. if the government can change everything in 6 months? That’s not the way to build an economy.
Every government that has adopted a form of direct taxation has always, and without exception, evolved with intrusive regulation that has ultimately led to a loss of freedom and liberty. To pursue liberty, the very basic requirement demands that economic freedom is paramount.
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Martin Armstrong November 20th, 2024
Posted In: Armstrong Economics
Correct. The Tax code can be simplified to a very large extend. start with closing / eliminating all the tax loop holes.