Ending the IRS - where's the money?

[deshman]

Ok, I got in to a debate at work about abolishing the income tax and was asked where we would get the money needed to run the country. The question is:

What other means of income does the Fed Gov. have besides the income tax? What would happen to the billions for roads and schools? I know that Dr. Paul would end the "Departments" of the Fed Gov which would save billions (trillions), but how do we still generate money for other needs?

Would this be left up to the States to tax and take care of their own?

 

[Johnnybags]

the income tax eliminated would bring us to

Ok, I got in to a debate at work about abolishing the income tax and was asked where we would get the money needed to run the country. The question is:

What other means of income does the Fed Gov. have besides the income tax? What would happen to the billions for roads and schools? I know that Dr. Paul would end the "Departments" of the Fed Gov which would save billions (trillions), but how do we still generate money for other needs?

Would this be left up to the States to tax and take care of their own?

year 2000 spending levels, the governement makes tons of fees, tarrifs, licensing etc. We need to cut out the fat and there is no need for an income tax.

 

[Akus]

Would this be left up to the States to tax and take care of their own?

That.

And ask them if they ever wondered how we lived before 1913? We built cities, aquired new territories, started and ended wars. All with no income tax.

 

[tesseract]

Tariffs (which were the primary source of federal income before the income tax), user fees, corporate taxes (?), ...

State taxes probably would increase to some extent.

 

[newbitech]

we need to cut spending from other places. Dr. Paul has told us that if we get rid of the income tax then Revenue will be back to 2000 levels. This means we need to bring spending in line with 2000 and use any additional cuts to pay down the debt.

 

[Ben Elliott]

Well, cutting spending is the only way to get rid of the income tax.

But there's a misconception about the income tax. The income tax isn't used to build roads and schools. Mostly state government and gas taxes and the plethora of other taxes take care of that. The income tax is only there to take care of the massive interest we owe the Fed. After Governmental waste hardly none of the money from the income tax is used for things such as schools and roads.

We'll be fine without the income tax after cutting down on the military industrial complex.

 

[slamhead]

Tariffs and taxes such as the Fed gas tax. The IRS is only 1/3 the federal budget. Cutting the spending on foreign policy alone will cut spending by a huge amount. Just tell them right now their payments to the IRS don't even pay for the interest on the loans we are taking to fund this war.

 

[Dave Pedersen]

The Federals don't pay for roads and schools. That is the job of county and state government. Federal income tax comprises only about 45% of total Federal revenues and without the federal income tax our government would be about the size it was ten years ago. We need to shrink it even further and so we will have a surplus to secure the medicare/medicaid and ss funds.

Bringing half a million troops home will help to invigorate our economy.

 

[Gimme Some Truth]

More money would stay in the states. Whats the point of giving more to giant bureaucracies for them only to give you less back?

 

[BLS]

Ever hear of gasoline tax?? How much do you think they make off 38.5 cents per gallon across the US??

 

[greendiseaser]

The income tax is only there to take care of the massive interest we owe the Fed. After Governmental waste.. .

Please don't spread this massive misconception it makes us look bad, and worse, like liars.

That is a huge fallacy put out there by Reagans "Grace Commission" and it is NOT TRUE.

"government waste" meant ANYTHING other than debt, like ALL entitlements and military spending ... and the grace report flubs it by discounting 1\3rd of all taxes, as not collected, thus making the remaining 2\3rds 100%, and the 1\3rd becomse the "half" ...

Look at any "tax dollar" pie chart, you will see MUCH of the income tax pays for MILITARY and ENTITLEMENTS!

 

[peacemonger]

all the numbers are here.

http://en.wikipedia.org/wiki/United_States_federal_budget%2C_2008

 

[RoyalShock]

He wants to dissolve the needless federal beauracracies like the the Dept. of Energy and Dept. of Education. There's a chuck of dough.

Add in that he prefers the market fund it's own research and development so billions in federal grant money would also be saved.

 

[apropos]

A point to remember is when arguing this point is:

Even today, individual income taxes account for only approximately one-third of federal revenue. Eliminating one-third of the proposed 2007 budget would still leave federal spending at roughly $1.8 trillion-- a sum greater than the budget just 6 years ago in 2000! Does anyone seriously believe we could not find ways to cut spending back to 2000 levels? Perhaps the idea of an America without an income tax is not so radical after all.

http://www.ronpaul2008.com/articles/105/cough-up/

What would happen to the billions for roads and schools?

About the roads: I may be mistaken, but aren't the states already responsible for maintaining their roads? Each state has its own department of transportation. If the state does the brunt of the work, it is worth debating whether the federal DoT should exist at all.

 

[greendiseaser]

all the numbers are here.

http://en.wikipedia.org/wiki/United_States_federal_budget%2C_2008

So besides the income tax proper,
SS Tax is the "other half" basicaly?

I mean, take both away you are down TWO TRILLION DOLLARS.

Left with just about 500 billion.

YIKES!

We'll have to cut a lot more than just some departments, to get rid of that deficit.

I think the real answer would be that, while federal income tax would go away, local and state property and other taxes would go pretty far up, and a lot of duties would be transfered back to "the people" or "the state".

Which is fine by me, because at least that is constitutional, and KEEPS IT OUT OF THE FEDERAL GOVNTS HANDS!

The other answer is, obviously that entitlements will go broke, which again, fine by me ... but not your mother and grandmother, probably.

 

[john_anderson_ii]

Philosophically governments tax three main revenue streams; income, consumption and wealth. Ron wants to eliminate the first. That would leave consumption taxes (gasoline, tariffs, user fees) and wealth taxes (investment, capital gains, etc).

However, I'm of the opinion that it doesn't really matter if the government has the money to keep on with the status quo. It would be better if it didn't. I have a budget, and I must work within that budget, and that means I have to be efficient. The government is not efficient and is very wasteful with our money, because their budget is virtually limitless. Their budget is the wealth of the entire United States, and that is philosophically unsound, and a prescription for disaster.

I think the real answer would be that, while federal income tax would go away, local and state property and other taxes would go pretty far up, and a lot of duties would be transfered back to "the people" or "the state".

I think this is a lot of Ron's point as well. There is no reason to bring all this tax revenue up to the federal government, put it in a pot, and re-disburse it to the states and organizations based on how well a lobbyist sells their position. It would be more efficient to be taxed for things like roads and services at the state level, and let Arizona deal with the money and what not.

 

[apc3161]

Receipts for fiscal year 2007 were $2,407 billion.

* $1,163 billion - Individual income tax
* $869.6 billion - Social Security and other payroll taxes
* $370.2 billion - Corporate income tax
* $65.1 billion - Excise taxes
* $26.0 billion - Customs duties
* $26.0 billion - Estate and gift taxes
* $47.2 billion - Other

Less than 50% came from the income tax. You don't need it.

United States federal budget, 1992 - $1.3 trillion

If you went back to 1992 spending (the world still spun) we wouldn't even need an income tax.

 

[Spirit of '76]

Ever hear of gasoline tax?? How much do you think they make off 38.5 cents per gallon across the US??

Yeah, most people have no clue that the government makes a larger profit from gasoline sales than the oil industry does.

http://www.taxfoundation.org/news/show/1139.html

 

[Knightskye]

And ask them if they ever wondered how we lived before 1913? We built cities, aquired new territories, started and ended wars. All with no income tax.

Lincoln taxed income to finance the Civil War, so you can't say "started and ended wars with no income tax."

But user fees, tariffs, excise and other taxes, like Ron Paul has had to explain a lot recently.

 

[tesseract]

I don't think that Ron Paul wants to get rid of the SS tax immediately - otherwise, what could he mean by allowing young people to opt out of it? So SS will continue to be funded by the SS tax, but as people opt out, SS will eventually shrink over the course of a few generations.

It's not fair to require people to pay into a system that (at the current rate things are going) will inevitably fail, but likewise it isn't fair to pull the rug out from under people who have already paid in. RP understands that.