If the income tax was abolished, would the economy collapse?

[MN Patriot]

I know the first thing libertarians will say:
No way! The economy would get stronger!

But consider this: our money was once backed by silver and gold. Now it is backed by the tax payer who gets robbed every payday.

Our national debt is theoretically supposed to be paid off by future tax revenue. But what if that tax revenue ends? What will happen to all of the people who hold those bonds, notes and T-bills? How will they get paid back? How would the economy respond if the tax revenue dries up because the Marxist income tax is abolished?

Would the federal government (and state governments if they repealed their income taxes) have to hold a big garage sale? Put all of their possessions for sale?

This is the type of thing that should be discussed, so that skeptics will see that it repealing the income tax is realistic.

 

[ForLiberty-RonPaul]

repealing the income tax is only half of the formula. you have to drastically cut back spending. once you cut spending way down, you can run government and pay off debt with a trade surplus and excise taxes

* the reason we have the income tax and a fiat currency is so that big governement can do anything they want without monetary limits.

 

[Che]

did the economy collapsed before we had income tax?

 

[not.your.average.joe]

did the economy collapsed before we had income tax?

LOL, no, but the government also wasnt the largest employer in the country either.. So needless to say it would be very difficult at first, but as we all know in the long run every american would be better off.

 

[ctiger2]

Abolish income tax
Stop Govt. Spending & shrink it
Audit US Gold reserves and then return to Gold standard
Repeal legal tender laws
Dismantle Federal Reserve

 

[Met Income]

It would SUCK in the short-term, but would be significantly better in the long-term.

Think of it like a heroin addiction -- just because getting clean is going to be hell for awhile doesn't mean you should keep shooting up.

 

[Acala]

Lol

But consider this: our money was once backed by silver and gold. Now it is backed by the tax payer who gets robbed every payday.

No it isn't. Our money is not backed by anything.

Our national debt is theoretically supposed to be paid off by future tax revenue.

No it isn't. The debt is theoretically supposed to continue to grow forever. That is the horror of Keynesianism.

But what if that tax revenue ends? What will happen to all of the people who hold those bonds, notes and T-bills? How will they get paid back?

They will not be paid back anyway. There is no conceivable way that our national debt will be paid off. Ever. It will end in default or hyperinflation. Bond holders who do not realize that will suffer the same consequences as anyone who makes a bad loan - they lose their money.

How would the economy respond if the tax revenue dries up because the Marxist income tax is abolished?

It would explode with productivity and wealth.

Would the federal government (and state governments if they repealed their income taxes) have to hold a big garage sale? Put all of their possessions for sale?

I hope so.

This is the type of thing that should be discussed, so that skeptics will see that it repealing the income tax is realistic.

As another poster pointed out, we had more than enough government for more than a hundred years without an income tax at all. Starve the beast.

 

[MN Patriot]

It would SUCK in the short-term, but would be significantly better in the long-term.

Think of it like a heroin addiction -- just because getting clean is going to be hell for awhile doesn't mean you should keep shooting up.

If we have to endure short term pain, put it off so our kids have to endure it. That has been the philosophy of past generations, if they weren't so ignorant to even recognize the trap they were creating for their children and grandchildren.

So how do we convince enough people that we need to end the income tax and reduce the size of government, if it means pain and suffering in the immediate short term? I don't think people have the discipline to change for the better, they need it forced on them. At least when speaking about the collective.

When things hit rock bottom, then people may change.

 

[MN Patriot]

No it isn't. Our money is not backed by anything.

Our money is backed by debt. Debt is meant to be repaid. The government gets the money to repay the debt from taxes.

No it isn't. The debt is theoretically supposed to continue to grow forever. That is the horror of Keynesianism.

The slippery slope towards perpetual slavery. An unbreakable circle of debt based money, taxes to pay for that debt, so the government can borrow more and put us into deeper debt and higher taxes.

They will not be paid back anyway. There is no conceivable way that our national debt will be paid off. Ever. It will end in default or hyperinflation. Bond holders who do not realize that will suffer the same consequences as anyone who makes a bad loan - they lose their money.

So if we can reform the Republican Party, or create our own Liberty Constitution Party that puts the Republicans out of business, how do we convince the electorate and all the influential people that ending the income tax means their investments will be worthless?

As another poster pointed out, we had more than enough government for more than a hundred years without an income tax at all. Starve the beast.

I agree. But we need to come up with a credible argument why ending the income tax is in people's own self interest. I think most people think the earth will stop spinning if there is no income tax.

 

[TheBlackPeterSchiff]

1st. Drastically cut spending. Wars, eliminate Departments, no pork, cancel TARP

2nd. Strip FED of Monetary expansion powers

3rd Reform/eliminate entitlements (i.e. Soc. Security, Medicare, HUD, TANF, farmer subsidies, etc) ONLY PEOPLE THE REALLY NEED HELP SHOULD GET IT!!

4th Reform Tax code/Cut taxes DRASTICALLY!!!

5TH Repeal laws banning alternative currencies

6th Institute term limits for congress

 

[sratiug]

The easiest way imo to end the income tax is to pass a constititutional amendment to end all internal federal taxation and replace it with a flat tariff over a period of ten years or so.

The argument against this is that it would make imports far too expensive to buy. But anyone who believes that must admit that the current system makes American work and production far too expensive to compete in the world economy and is actually subsidizing imports.

 

[MN Patriot]

The easiest way imo to end the income tax is to pass a constititutional amendment to end all internal federal taxation and replace it with a flat tariff over a period of ten years or so.

The argument against this is that it would make imports far too expensive to buy. But anyone who believes that must admit that the current system makes American work and production far too expensive to compete in the world economy and is actually subsidizing imports.

What about a federal sales tax? I saw another thread mention this idea. If it were capped at 10%, or better yet, 5%, that would probably be enough to pay for essential services.

In case nobody has noticed by signature at the bottom, what do people think about ending payroll deductions? Would that wake people up, make them aware of how much government costs them? We need a tax revolt, this could help start one.

 

[abeljake]

Quote:
No it isn't. The debt is theoretically supposed to continue to grow forever. That is the horror of Keynesianism.

The slippery slope towards perpetual slavery. An unbreakable circle of debt based money, taxes to pay for that debt, so the government can borrow more and put us into deeper debt and higher taxes.

Didn't Keynes believe in cutting taxes and increasing spending in downturns but then raising taxes and slashing spending during the good times, paying back the debts incurred during the previous downturn? His theory was also based on entering the downturn with a budget surplus. I am no fan of Kensenian theory, but many do seem to forget the surplus building portion of his theory. We seem to be following no particular economic theory right now other than the purposeful destruction of our economy.

 

[sratiug]

What about a federal sales tax? I saw another thread mention this idea. If it were capped at 10%, or better yet, 5%, that would probably be enough to pay for essential services.

In case nobody has noticed by signature at the bottom, what do people think about ending payroll deductions? Would that wake people up, make them aware of how much government costs them? We need a tax revolt, this could help start one.

A federal sales tax involves the federal government in every transaction in America. A flat tariff does not. Jefferson was proud that Americans would only see federal tax collectors at points of entry because he relied on the tariff during his presidency.

 

[Austrian Econ Disciple]

A federal sales tax involves the federal government in every transaction in America. A flat tariff does not. Jefferson was proud that Americans would only see federal tax collectors at points of entry because he relied on the tariff during his presidency.

Even me, an avowed strict free-trader would rather see a very small duty/impost in favor of any domestic taxation, if we are to have Nation-States.

We need to repudiate the damn debt. Besides, its pointless trying to reduce taxation if we don't reduce spending. That means a 99.9% reduction in all expenses of the Federal Government, and that means, yes disbanding the Standing Army! If you are for standing armies, then you have to have domestic taxation. Not only that, but idle soldiers are just a toy waiting to be used by those in power. Anything idle, will be used, or a reason found to be used.

I really don't see how we are going to reduce spending without a collapse of the system. There are too many people on the Government dole to vote against ending their money handouts. People need to come to this realization.

 

[tmosley]

The easiest way imo to end the income tax is to pass a constititutional amendment to end all internal federal taxation and replace it with a flat tariff over a period of ten years or so.

The argument against this is that it would make imports far too expensive to buy. But anyone who believes that must admit that the current system makes American work and production far too expensive to compete in the world economy and is actually subsidizing imports.

You'd have to burn Washington to the ground to be able to run the government on that little money.

I'm all for it

But while we're going nuts, why don't we just implement a fee for service model to fund the government? The government contracts out all of its functions on an open basis to numerous contractors, who will then charge fees to carry out their duties. They pay a small portion of those proceeds toward the cost of running the government.

Examples would include border security, where people would be charged to cross the border. The amount would vary between crossing points, competitively, likely most individuals would be allowed to cross for free, with the big boys paying the fees, as transportation currently funds the roads. Multiple competing drivers licensing agencies, road leasing agencies/toll road operators, etc. Get the government out of the mail business, and out of other places that it has no business being in.

Eventually, the entire US government will consist only of a small group of auditors who ensure that the required services are being carried out satisfactorily, and a supreme court, and as such, the required fees coming back to them would diminish to almost nothing. Of course, the companies carrying out these functions wouldn't have the government's lawsuit immunity, so bad service is punished just like in the private sector.

 

[YumYum]

Didn't Keynes believe in cutting taxes and increasing spending in downturns but then raising taxes and slashing spending during the good times, paying back the debts incurred during the previous downturn? His theory was also based on entering the downturn with a budget surplus. I am no fan of Kensenian theory, but many do seem to forget the surplus building portion of his theory. We seem to be following no particular economic theory right now other than the purposeful destruction of our economy.

Good point. JFK started deficit spending to jump start the economy. His plan was to pump a lot of money into the system and once the economy was up and running he would reign in the spending and up the taxes. His real purpose was to help the poor, and to appease the Republicans in Congress he cut taxes for the rich. His plan worked, but Johnson and every president since has engaged in massive borrowing, thus we are now in the mess we have today. I view Keynesian policy like jump starting a battery. Once you jump the other car you disconnect the cables. Our cables are now melted.

 

[newbitech]

what is the government doing now that it is already running a deficit on tax receipts?

yeah....

 

[Danke]

Our money is backed by debt. Debt is meant to be repaid. The government gets the money to repay the debt from taxes.

You can't pay "debt" with more "debt." It is only an exchange. Income tax is all about control and some inflation control.

 

[sratiug]

You'd have to burn Washington to the ground to be able to run the government on that little money.

I'm all for it

But while we're going nuts, why don't we just implement a fee for service model to fund the government? The government contracts out all of its functions on an open basis to numerous contractors, who will then charge fees to carry out their duties. They pay a small portion of those proceeds toward the cost of running the government.

Examples would include border security, where people would be charged to cross the border. The amount would vary between crossing points, competitively, likely most individuals would be allowed to cross for free, with the big boys paying the fees, as transportation currently funds the roads. Multiple competing drivers licensing agencies, road leasing agencies/toll road operators, etc. Get the government out of the mail business, and out of other places that it has no business being in.

Eventually, the entire US government will consist only of a small group of auditors who ensure that the required services are being carried out satisfactorily, and a supreme court, and as such, the required fees coming back to them would diminnish to almost nothing. Of course, the companies carrying out these functions wouldn't have the government's lawsuit immunity, so bad service is punished just like in the private sector.

I don't believe a government should be allowed to participate in economic discrimination. Therefore no fees should be allowed for any service provided by the government. I've worked for the department of defense. Some multi-million dollar contracts could have been handled by two good programmers. A major corporation (which I won't name but it owns NBC) routinely was paid bonuses for software systems with hundreds of errors.