We Don’t Need No Committees! We Need Tax Reform!

After the recent debacle on Capitol Hill, instead of real forward progress, we have the same old tired “Beltway two-step” of “let’s have a committee meeting.” To paraphrase Alfonso Bedoya’s words as Mexican bandit leader “Gold Hat” in the 1948 film, “The Treasure of Sierra Madre:” “Meetings? We don’t need no stinkin’ meetings.”

Truly, we don’t need no stinkin’ meetings. The American taxpayer is tired of stinkin’ meetings that end up nowhere. We all know that next year on January 15 and February 7 (which happens to be my birthday), regardless of what President Obama says, the kabuki dance will be replayed. What we need are competent statesmen who will develop sound policies leading to economic growth.

This country truly needs tax policy reform. Consider that we are in the one-hundredth year of the personal income tax. In 1913 the top marginal tax rate was seven percent and it was supposed to be temporary. HA! Today the top marginal tax rate is nearly 40 percent and is joined by capital gains tax, dividends tax, and death tax — all killers for economic growth. It’s time to move away from the progressive tax system – a tenet of Karl Marx’s communist manifesto – towards a flat tax in order to eradicate the bloated and incomprehensible 67,000 page current tax code, which apparently both Charlie Rangel and Tim Geithner could not comprehend.

With a flat tax, I believe the only remaining exemptions should be mortgage interest and charitable contributions. Let’s support home ownership the right way, not as the Carter Administration’s Community Reinvestment Act sought to do.

My biggest fear is that Republicans will allow Democrats to continue with their “tax the rich” rant and believe that increased revenues come from increased taxation. Presidents Calvin Coolidge, John F. Kennedy, Ronald Reagan, and even Bill Clinton, with the pressure of a true conservative House and Senate, understood economic growth policies. Reform the tax code, and let the market – and American taxpayer – flourish.

You can read the rest of my article for the London Center for Policy Research here.

52 COMMENTS

  1. Allen, the ruling elite like the convoluted tax structure we have because it gives them power to bargain and wheel and deal! I love that flat tax idea with a base level of income exempted that is tied to inflation. Here’s hoping we can make it work, but the odds are long.

  2. I suggest that if Congress does not pass and the President does not sign an annual budget by October 1 each year, federal Taxpayers are given a tax holiday until the budget passes. NO BUDGET, NO TAXES And CR’s don’t count as a budget

  3. I believe the ultimate tax reform is the Fair Tax. Tax isn’t based on your income but how you spend. Getting the federal government out of my paycheck is what I hope for.

  4. I love the idea of tax reform and I could get behind a flat tax but I have studied the Fairtax and I believe that program has the most advantage for the American economy!

  5. Flat Tax is the way to go. All peoples no matter their financial or status as a citizen would pay based on their true income through the purchases they afford.

  6. Read the full article and found it very edifying. My hesitation in all of these debates is wondering how we can stop the growing disparity in wealth in the US between the richest and the poorest and middle class. Until that is addressed by conservatives there will be less than enthusiastic support from the middle class and poor for what you propose since their share of the wealth, despite working dang hard, seems to be slipping lower and lower.

    • I agree that the disparity of growth in wealth is the problem. The logical question to ask is why is there this disparity? We have to understand that in order to try to create policies to reverse this trend. Unfortunately, once that question is asked, the knee jerk arguments begin.

      • the disparity is mostly because the Fed is propping up the stock market, so those already invested are gaining wealth.who supports this policy? The president!

    • I am not at the bottom of the income bracket but real close. I do not blame the rich it is not their fault for my circumstances, it was not because I didn’t work hard all my life, but I look back and see I made or didn’t make the right/wrong choices that has brought me to where I am at 62 years old. no one but me not the rich are at fault, if there is fault. my hope is not in the government.

  7. I’ve been thinking a flat tax would be the best way to go for YEARS! In the early 80’s ,it was suggested 5% and very few deductions. Let’s get it done!

      • I have. I’m not sure the 23% is a great deal. There would have to be some thins exempt from that. You want to pay an extra 23% for that house or car?

      • If you do some research you’ll find that 22% of the purchase price of an auto is in taxes that will be repealed by the Fairtax, thus new car prices will only rise 1% while your paycheck should rise 30+%. Most other consumer goods will see similar changes.

  8. Why is the talk always about social security running out of money, but never the welfare program running out??? Our original settlers found the best way to have a productive community was by implementing the “If you don’t work, you don’t eat” rule. Let’s go back to that!

  9. HERE YA GO!!!

    ‘Common Sense Tax’ Could Boost the Economy

    A new tax proposal that two economists call “simple, transparent, and fair” could spark new investment and job creation in the United States, they say.

    Our current tax system is “unfair, distortionary, wasteful, and a user’s nightmare,” according to John Goodman, president and CEO of the National Center for Policy Analysis, and Laurence Kotlikoff, a professor of economics at Boston University. “Most important, it’s limiting our country’s economic potential.

    “But can we have a far simpler tax system that generates at least as much revenue and is more progressive? Yes, it’s called the Common Sense Tax (CST). It’s designed to be revenue-neutral and to kick-start the economy.”

    The plan includes just two taxes. One is a payroll tax at a flat 13 percent rate.

    Today’s FICA tax is highly regressive, since it levies a 15.3 percent tax on wages up to $113,700, half payable by the employee and half by the employer.

    To assure that middle- and low-wage workers benefit immediately, the CST levies the payroll tax only on employers.

    The second tax is a personal income tax with a 25 percent rate on income over $100,000 for married households and $50,000 for individuals. That would immediately end income taxation for two-thirds of American households.

    The CST is revenue-neutral because it taxes all income above the thresholds and eliminates all deductions and tax breaks except the charitable deduction, Child Tax Credit, and Earned Income Tax Credit, Goodman and Kotlikoff maintain in an article for The Fiscal Times.

    Another provision of the CST would tax corporate income at the personal rather than the business level — corporate shareholders above the threshold would pay taxes on income earned on their behalf by the corporation as it is accrued.

    The United States currently has the world’s highest statutory corporate tax rate. But with the CST, there would be no explicit corporate tax, which “would make the United States the world’s most business-friendly country,” the authors assert.

    They conclude: “This would stimulate substantial new investment and job creation in the U.S., leading to higher wages for U.S. workers.

    “In addition to being simple, transparent, and fair, the Common Sense Tax would improve incentives to work and save, eliminate an entire army of corporate and personal tax accountants and lawyers, and make April 15 just another day for most Americans. Most important, it would help grow the economy.”

    The Fiscal Times calls the CST a “tax reform plan that both parties can like.”

  10. FAIR TAX not flat tax. Fair tax is only on purchases where flat tax is still an income tax that continues to give government control over our income.
    Everyone would pay their fair share including all those who work under the table. The more you spend the more you would pay.

  11. Mr. West, please support the Fair Tax not a flat tax. The Fair Tax taxes on what everyone spends. This is the only way to be fair. It also totally abolishes the IRS, something we also desperately need, to show Politicians in Washington what happens when THEY abuse the American People. There are more departments that need to be abolished but let’s start here. With the Fair Tax, even people dong business illegally, and all immigrants, anyone who spends money will pay a fairer share. The wealthiest will pay more because they spend more especially on Luxury items. The poorer will actually receive a portion back, this helps everyone and will generate enough money in the first three years to pay off all of our National debt and get back in a surplus condition. Please support the Fair Tax. A flat tax regardless of good intentions can turn bad.

    • I have looked at the “Fair Tax” idea. It sounds real good.
      But it is real BAD.

      The Fair Tax is unworkable because it has no “Accountability” in it, and can’t have any.

      The proposed 30% tax would be insufficient, because at least 30% of all the tax collected by sellers would never be moved passed the seller’s own pocket. And there is no way to monitor this underground economy. We taxpayers still would pay the tax, but much of the money would never go to Washington.

      Within three years the tax rate would work its way to above 50% on sales, and an even greater proportion would be retained by the underground
      economy.

      The Fair Tax would not do away with the IRS, but would reassign the agency to policing the hidden underground economy; going to need more SWAT
      teams.

      • Please do better research. The proposed amount for the fair tax is 23%. The 30% figure you site includes state sales tax. the fair tax is inclusive and will not appear as an add on tax. Retail establishments already collect sales tax and send it to the states the fair tax will just be included and sent to the federal government.
        I currently live in the Philippines, retired and cant afford to live in the US, they have an inclusive 12% tax on most purchases it is printed on the receipt the amount that you paid for the tax.
        the fair tax is without a doubt the fairest way to tax people. All underground economy will be paying their fair share, illegal aliens, tourist, and people who don’t currently pay any income tax.
        Please go to the fair tax website buy the books and do some real research before you make your incorrect statements.

  12. My motto is simplify. Flat tax for big and small in my opinion would more than pay for any subsidies without hardship on middle class. Being retired, my husband and I are still paying federal, state, local, food, gas, and on and on…Thank you Mr. West for your ability to see a bigger and brighter picture for not just people seeking to live the American dream, but Americans seeking to live.

  13. Allen We’re a go with the flat tax. Thank you for the history about personal income tax, a tool used by the progressive democrats for the last 100 years, And by the way…. Feb. 7th was my grandfathers Birthday… and mine is the 4th! Great to know we are in most excellent company! God Bless and God’s Speed my friend!

  14. ENOUGH ALREADY of the unconstitutional government levy upon human labor in exchange for compensation. Consumer products and services are taxed on NET financial gain after deducting expenses incurred pursuant to revenue. Human beings ceased to be treated as chattle with the abolition of slavery. The labor of human beings is not goods and services. A wage earning should be treated the same as any contractor for goods and services. The water I drink, the food I eat, the clothes I wear, the medicine I take, my shelter from the natural elements, my means of conveyance used to deliver my services to the customer ( employer) are all necessary expenditures without which I would be unable to collect my fee for my services. The IRS tax courts contentions to the contrary – that gross wages constitute taxable “income” , subject only to dispensations for deductions and allowances is just another government lie. The FAIR TAX IS THE ONLY tax reform I am interested in hearing about.

  15. Yup, but that said, we must replace the term “liberal” with “statist,” and “progressive,” with “adherent to a narrative.”

  16. I have a fix for All of Obamacare, and the republicans in congress don’t have to do a thing. Here is the solution, and it’s quite simple. “DO NOT SIGN UP FOR ANYTHING.” Tell everyone you know not to sign up either. Then call your Congressman or Senator, and tell them, No Matter which party they are in, that you will not be supporting Socialism, in any form what so ever. The Democrats will get the message first, the Republicans already get it. Just simply say to your Republican representative, if you have one. “I voted for you, and I supported you, but now I need your support. When I choose Freedom, not Socialism. If no one signs up, in protest, against the socialist policies of the Democrats, they will have no way to fund Obama care, That is unless they take punitive action against you or someone else that they feel they can extort money from. This will leave them in a very venerable position. If they try play rough, rally everyone you know, in the streets and say to them “We are willing to throw every Democrat out of office for destroying the country, as well as for destroying our ability to obtain healthcare the way we see fit. TRUST ME. THEY WILL GET THE MESSAGE. In This country, that is how you take your freedom back. It will work, and it will work swiftly. Do not be afraid of your government. Besides, it it nothing more than your neighbors, and they have to live somewhere.

  17. We are TIRED of obama’s negotiations…..all one-sided. but I blamed boehner for the one sided talks/negotiations…..he needs to replace the yellow streak down his back and get some balls. BIG ONES

  18. its time for americans to raise up and start the 3rd american revolution. the only way these people are going to learn is when we overthrown them and put them on trial for treason

  19. I say flat tax across the board, and no deductions, no matter how much you make we all pay. The more you make the more you pay…It will generate more tax monies and then get people in there to spend it right..No lobbyist, no special interests..NO ONE ..I do agree with legitimate churches and charitable organizations..so many get exemptions and should not be …

  20. Should include capital gains and dividends in the exception list. Either at a much lower rate because these are the investments which fuel the economy, or at the very least index for inflation which is currently taxed in capital gains. One is currently taxed on “gains” due to inflation which are not gains.

  21. I hope West continues being vocal about his common sense plans for the economy. I think most who are in the “Middle Class” get it but I’m afraid that those living below poverty level and especially the younger crowd and minorities who the Democrat Communists prey upon, need to hear more directly what is being done to them and how to avoid being victimized, how to do their own research on candidates and then finally, how to vote wisely.

  22. Rounding numbers for we have about 308, million people in America and there are about 154, million in the workforce and less than half of those 75,million pay federal taxes. What would the increase in federal tax revenues be if everyone of the 75,million paid some federal tax percentage starting at $10,000 annual income to pay 1.5%, 3%, 5%,and 7%. plus you then add the millions of illegal aliens working to be added to the federal tax roles. what would happen to the annual deficit and national $17,T deficit? What would the politicians do with the added revenues?????

  23. flat tax added to every thing purchased. no exemptions. Every one pays it. the more you spend the more you are taxed, we will even tax you for your burial.
    and they would still want to raise the taxes.

  24. This is tantamount to cutting the revenue streams that democrats live and die by. Great ideas but the democrats slip more taxes past us than we are even aware of. Profile one not so rich individual and take stock of how much he/she really pays in taxes, income taxes are just a portion of the tip of the ice burg. Where we should be engaged is term limits and “last enacted first cut principles” until the budget is balanced. Then reform taxes

  25. I don’t know. I am not an expert in economics, but I do know that in college I learned the M. Keyesian model was the one used by Europe/England (he was from England and a Socialist), and now America is proud to claim that we use the same model by this administration, perhaps before…perhaps, all we need is for the tax loopholes for the uber rich to be plugged. I do know we need to have a radical immigration overhaul. Stop it altogether until Americans are employed, put military forces on our boarders, and deport to Mexico all those illegals presently in prisons, and those who are in the system as lawbreakers IMMEDIATELY. Then try to figure out how to get the other illegals out except for those who have children born here and are without criminal records, and working and trying to be favorable citizens/Americans…who desire to be Americans in America and not working as Mexican Nationalists. Let Russia take all the third world immigrants for a while…let them *diversify* for a change. That seems reasonable.

  26. Col. West. Are you aware that there is a misprint in this transcription of the address to The London Center? It says during the shutdown only 6% of the EPA was deemed NON-ESSENTIAL. I’m sure you must have said ESSENTIAL. Please take note that you are misrepresented in account.

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