Is Ron Paul a Liar?
Is Ron Paul a Liar?
An Answer to the “Fact Checker”
By Mitchell Gray
Recently Michael Dobbs, the so-called “Fact Checker”, writing for the Washington Post wrote a blog about Rep. Dr. Ron Paul’s stance on eliminating the federal income tax. Mr. Dobbs has made the claim that Dr. Paul is essentially a liar. While I do not speak for the Paul campaign I should like to lend my hand at this budgetary quandary.
Dr. Paul has claimed that if we eliminated the federal income tax we would still be left with roughly the same revenue we had in 2000. Mr. Dobbs disagrees stating that “Without the revenues from individual income tax, the federal budget would shrink to the size it was in the early 1990s, not the year 2000.” But is that really true? Let’s take a look.
According to the Treasury Departments Final Monthly Treasury Statement for September 2000 total tax receipts were just over $2 trillion ($2,025,038 million) which includes the income tax, Social Security, Medicare/Medicaid and other taxes. Total revenue for FY2007 was over $2.5 trillion ($2,567,671 million) with total outlays of $2.7 trillion. If one was to take away the nearly $1.2 trillion raised through the income tax in 2007 that would leave adjusted receipts of $1.4 trillion. On the surface, it looks as though Dr. Paul is indeed wrong. Except for the fact that we had $237 billion surplus in FY2000 meaning that Dr. Paul’s numbers are about $380 billion short of what the government generated in 2000. Now $380 billion sounds like a lot of money but with a 2008 budget approaching $3 trillion that really isn’t that much.
However, if one looks at current spending we would indeed be shy about $1.4 trillion if we eliminated the income tax tomorrow. Mr. Dobbs wants his readers to believe that if Dr. Paul were to become President he would shut down the IRS and the income tax the very next day. That would really mess things up for the government. Fortunately for us Dr. Paul has no plans of eliminating the income tax right away. Dr. Paul’s income tax elimination plan makes a lot of sense. Start cutting spending and rolling back entitlement programs to reduce cost and thus you can reduce taxes. Dr. Paul has written that “the real issue is total spending by government, not tax reform. In other words, why change the tax structure if spending stays the same? Once we accept that the federal government needs $2.7 trillion from us-- and more each year-- the only question left is from whom it will be collected. Until the federal government is held to its proper constitutionally limited functions, tax reform will remain a mirage.”
If we eliminated the income tax tomorrow that would leave the federal government with a $1.4 trillion budget deficit. Where do we get the other $1.4 trillion that Mr. Dobbs feels the government needs? I have a better question: Why does the federal government NEED another $1.4 trillion? Total spending in 1998 was only $1.6 trillion. Remember way back in 1998 when we were still talking about tax cuts because the government was spending too much of our money? Now here we are just nine years later and the government is spending over $1.1 trillion MORE of our money! Is there really any reason why we can’t go back to 1998 levels of spending?
One way we can do that is just how Dr. Paul suggest – cut spending! If we were to reduce the spending or even eliminate much of the federal government we could reach the goal of eliminating the income tax. By bring our troops home, not just from Iraq and Afghanistan, but from Japan, Germany, South Korea, Taiwan and other parts of the world we would save billions of dollars. As Mr. Dobbs points out just leaving Iraq and Afghanistan would save us $122 billion or more every year.
If our leaders in Congress would just read the Constitution, the thing they have sworn to defend and protect, we could start eliminating much of the unconstitutional agencies and departments of the federal government. By eliminating the Departments of Agriculture, Commerce, Energy, Housing and Urban Development, Interior, Labor, Transportation, the EPA, the International Assistance Program and the Small Business Administration we’d cut some $378 billion from the budget. Then by allowing people to opt out of Medicare/Medicaid and Social Security and allowing them to save and invest that money themselves, rolling back entitlement spending, we could trim the size of the government even more.
Mr. Dobbs has attempted to paint Dr. Paul a liar without taking into account Dr. Paul’s total solution to our problems. Dr. Paul would indeed eliminate the income tax tomorrow if he could but understands that we must first start cutting spending and eliminating wasteful programs and agencies.
Mr. Dobbs is partially right. Paul’s numbers don’t add up but we have to include his inclusive plan of trimming the governmental budget. Once we all realize that the federal government does not need $3 trillion like it says it does for FY2008 then we can start making some serious changes.
Dr. Paul’s plan to eliminate the income tax would also benefit all Americans because over $1 trillion would no longer be stolen and wasted in the government. Let’s just think about this for a second: If the federal government was no longer taking over $1 trillion a year from all Americans in taxes what benefits would that bring to the economy? Think about what you’d do with all of the money currently being taken from your paycheck every month. This infusion of capital into the economy would provide an economic stimulus like nothing we’ve ever seen before. More people could save, buy new cars, buy electronics, take vacations or simply purchase health insurance for their family. Jobs would be created, wealth would be created and the economy and America as a whole would be much better off. Not to mention that the increased spending would mean an increase in tax revenue for the government which would offset the supposed deficit Mr. Dobbs envisions.
Sources:
Four Pinocchios for Ron Paul, By Michael Dobbs
http://blog.washingtonpost.com/fact-checker/
Final Monthly Treasury Statement, Sept. 2000
http://fms.treas.gov/mts/mts0900.pdf
Final Monthly Treasury Statement, Sept. 2007
http://fms.treas.gov/mts/mts0907.pdf
Final Monthly Treasury Statement, Sept. 1998
http://fms.treas.gov/mts/mts0998.pdf
Taxes, Spending, and Debt are the Real Issues, Ron Paul, Oct. 16, 2006
http://www.house.gov/paul/tst/tst2006/tst101606.htm
). Dr. Paul first wrote about this IRS/2000 level spending issue in 2006 IIRC, I found it interesting and tried to check the numbers then but couldn't get them right, so yeah, I'd be interested to see how they came to that figure... not that it changes if the IRS should be phased out. 
