Among his many insightful economic positions, he believed that taxes were a good thing but they should be “certain, and not arbitrary”.

No one here disputes that we shouldn’t have taxes. Taxes are necessary to pay for roads and police and the many other services that come with living in the US. But what we do have a problem with is that the tax code has become a tool to redistribute wealth, taking it from some and giving it to others, ultimately redefining the American Dream into something that looks more like a socialist economy.

Adam Smith believed that taxes should be “certain, not arbitrary” but our taxes right now are anything but certain! Filling out tax forms – accomplished by wading through an overwhelming number of forms and documents – is akin to pulling the lever on a slot machine… but a slot machine that punishes you instead of rewards you!

Smith proposed a flat tax. While I realize that there are many challenges to implementing a flat tax, and there are reasons why a flat tax might not work, it is the most equitable form of taxation because it is certain and knowable. In fact, a flat tax might actually decrease the amount of bureaucracy and expense incurred by the IRS every single year in trying to understand their own tax code and then trying to enforce it.

The Washington Times has a fascinating article that starts by talking about the IRS and how IRS employees are receiving a growing number of threats for trying to enforce Congress’ tax laws but then, on page 2 of the article, it launches into a scathing examination of IRS employee culpability and ultimately concludes with other great thoughts by Adam Smith. Read the full article here.

No related posts.

Fact: The bailout/stimulus package will create the largest deficit in U.S. history.

Fact: The bailout/stimulus must be paid for.

In discussing the incoming Obama administration’s planned stimulus package, The Wall Street Journal had this to say:

“Whether or not you think new spending will stimulate the economy, the one undeniable truth is that this money has to come from somewhere, which means that it is borrowed or taxed from the private economy. This spending blowout is all but guaranteeing huge future tax increases, and anyone who thinks only the rich will pay is living an illusion. Taxpayers need some new champions in Washington — and fast.”

The Wall Street Journal’s Opinion Journal article titled “The Deficit Spending Blowout“, dated January 7, 2009.

Congress will needs its own stimulus package to pay off this huge deficit, so they will almost certainly have to raise taxes. The IRS is not going out of business anytime soon.

In addition, you can enjoy this Wall Street Journal video which discusses the likelihood of tax increases.

What is your opinion?

Related posts:

1. “Hello, I’m with the Government and I’m Here to Help You.”