Anarchy in the IRS: Imagining a World Without Income Tax (eBook Preview)

Imagine a world where you could keep all of your hard-earned money without paying a dime to the federal government. Sounds too good to be true, right? Well, it's not as far-fetched as you might think. In fact, it's how things used to be in America before the income tax was introduced. And it's how things could be again if we decided to abolish this unjust and inefficient way of funding the government. In this blog post, I will explain why income tax is a bad idea, and how we can live without it.

The History of Income Tax in the US

The income tax is not as old or as natural as you might think. It was not part of the original design of the US Constitution, which only authorized the federal government to collect indirect taxes, such as tariffs or excise taxes. The first personal income tax was imposed by Congress in 1861 to help pay for the Civil War, but it was repealed in 1872 after the war ended. 

The idea was brought back in the 16th Amendment to the Constitution, which was ratified in 1913 and gave Congress the power to levy a federal income tax. The income tax was initially only applied to the wealthy, with a top marginal rate of 7% on incomes above $500,000 (equivalent to about $13 million today). 

Over time, however, the income tax became more widespread and progressive, especially during the World Wars and the New Deal era, when the top marginal rate reached a staggering 94% in 1944-45. The income tax was reformed and reduced several times in the later decades, but it still remains the largest source of federal revenue today, accounting for about 50% of the total.

The Problems with Income Tax

Income tax is a bad idea for many reasons. Here are a few: 

1. Income tax violates the principle of self-ownership and consent, by taking away a portion of one's labor and property without their voluntary agreement. As philosopher Robert Nozick argued, taxation is akin to forced labor or slavery, because it deprives people of their natural right to control their own resources and activities. Taxation also violates the principle of consent, because it is imposed by a coercive authority that does not represent or respect the preferences of each individual taxpayer.
2. Income tax discourages work, saving, investment, and entrepreneurship, by reducing the incentives and rewards for productive activity. As economist Arthur Laffer pointed out, people respond to taxation by changing their behavior and adjusting their income to avoid or minimize their tax liability. This means that they work less, save less, invest less, and innovate less than they otherwise would. This reduces economic growth, job creation, wealth accumulation, and technological progress.
3. Income tax creates a complex and costly system of compliance and enforcement, by requiring taxpayers to file returns, keep records, and deal with audits and penalties. According to the Tax Foundation, Americans spend about 8.1 billion hours and $409 billion every year on complying with federal income tax laws. This is a huge waste of time and money that could be better spent on more productive or enjoyable activities. Moreover, the income tax system is riddled with errors, frauds, loopholes, and exemptions that create opportunities for evasion and abuse by both taxpayers and tax collectors.
4. Income tax enables wasteful and harmful government spending, by providing a steady and easy source of revenue for politicians to fund wars, bailouts, subsidies, and other special interests. As economist Milton Friedman observed, there is no such thing as a free lunch: every dollar that the government spends must come from somewhere else. And when the government spends more than it collects in taxes, it must borrow or print money to cover the deficit. This leads to higher debt levels, higher interest rates, higher inflation rates, and lower economic growth.

The Benefits of Abolishing Income Tax

Abolishing income tax would have many benefits for individuals and society as a whole. Here are a few:

1. Abolishing income tax would respect individual rights and freedoms, by allowing people to keep more of their income and choose how to spend it according to their own needs and preferences. This would enhance personal autonomy, dignity, and responsibility, as well as social diversity, tolerance, and cooperation.
2. Abolishing income tax would boost economic prosperity, by increasing work, saving, investment, and entrepreneurship. This would create more jobs, wealth, and innovation, as well as lower prices, higher wages, and better quality of goods and services.
3. Abolishing income tax would simplify and reduce the cost of taxation, by eliminating the need for filing returns, keeping records, and dealing with audits and penalties. This would save time and money for taxpayers and the government, as well as reduce errors, frauds, loopholes, and exemptions.
4. Abolishing income tax would limit and improve government spending, by forcing politicians to rely on other sources of revenue that are more visible and accountable to the taxpayers and the public. This would encourage fiscal discipline, transparency, and efficiency, as well as reduce debt levels, interest rates, inflation rates, and economic distortions.

The Objections to Abolishing Income Tax

Some people might object to abolishing income tax, by raising some common questions or concerns. Here are some possible answers:

1. How would the government fund its essential functions without income tax?
• The government could rely on other sources of revenue, such as user fees, sales taxes, excise taxes, tariffs, or voluntary donations. 
• User fees are payments for specific services or benefits provided by the government, such as toll roads, national parks, or passports. 
• Sales taxes are taxes on the consumption of goods and services, such as food, clothing, or entertainment. 
• Excise taxes are taxes on specific products or activities, such as gasoline, tobacco, or alcohol. 
• Tariffs are taxes on imports from other countries, such as steel, cars, or clothing. Voluntary donations are contributions from individuals or groups who support the government's goals or programs, such as charities, foundations, or corporations. 
• These sources of revenue would be more fair and efficient than income tax, because they would be based on actual use or benefit rather than arbitrary income levels. They would also be more transparent and accountable than income tax, because they would be visible and measurable to the taxpayers and the public. They would also be more flexible and adaptable than income tax, because they would allow the government to adjust its spending according to its revenue and demand.
• The government could also reduce its spending by eliminating or privatizing many of its non-essential functions, such as welfare, education, health care, or defense. These functions could be better provided by the private sector or the civil society, which have more incentives and information to deliver quality and value to their customers or beneficiaries. This would save money for the government and the taxpayers, as well as improve outcomes and choices for the people.
2. Wouldn't abolishing income tax increase inequality and hurt the poor?
• Abolishing income tax would benefit everyone by increasing economic growth, creating more jobs, lowering prices, and raising wages. This would improve the standard of living and the opportunities for everyone, especially the poor who depend more on these factors for their well-being. Abolishing income tax would also reduce inequality by removing the loopholes and exemptions that favor the rich and powerful over the average taxpayer. The rich would no longer be able to avoid or minimize their tax burden by using complex schemes or hiring expensive lawyers and accountants. They would also no longer be able to influence or benefit from government spending that favors their interests or industries. Abolishing income tax would also empower the poor by allowing them to keep more of their income and choose how to spend it according to their own needs and preferences. They would no longer be dependent on or controlled by government programs that are often inefficient, ineffective, or paternalistic. They would also have more incentives and resources to work hard, save money, invest in themselves, and pursue their dreams.

Conclusion

Income tax is a violation of individual rights, a drag on economic prosperity, and a source of government corruption. It is time to end this unjust and inefficient way of funding the government and restore freedom and justice in America! If you agree with me, please join me in this movement to abolish income tax and create a better world for ourselves and our children. Fuck that, I'm tired. 

If you want to learn more about this topic or get involved in this cause, please check out these resources:

1. The Case Against Income Taxation by Robert Nozick
2. The Laffer Curve: Past, Present, and Future by Arthur Laffer
3. The Tyranny of Taxation by Milton Friedman
4. The FairTax Book: Saying Goodbye to the Income Tax and the IRS by Neal Boortz and John Linder
5. Americans for Fair Taxation: https://fairtax.org/