A humble proposal by J Kennedy

I was asked by a member, J. Kennedy, to post an article discussing his idea. I am happy to oblige.

Congress and the Federal Reserve have approved trillions to bail out privileged financiers and manufacturers for reasons ranging from incompetence to fraud, and doing so, they have disregarded overwhelming public disapproval.

Dr. Paul's bill in congress to audit the Federal Reserve (HR 1207) and Senator Sanders' companion bill in the Senate (S 604) address a big part of the problem, Federal Reserve secrecy and its consequent licence. Auditing the Federal Reserve would likely reveal accounting and investment practices to shame the Mafia, but the audit campaign remains aloof from plain folks. Without pressure from the little guy, the market value of the audit bills cannot compete with the buying power of big finance on the congressional trading floor.

Occasionally, however, majorities share the frustrations of rebels, and now is one of those momentous times. The majority is angered over presumptuous looting by their overseers, hence, receptive to revolutionary ideas. Radical solutions like abolishing the Federal Reserve Bank and the Internal Revenue Service hold more promise than usual, but the average Joe trembles at the prospect of confronting sacred idols of public adoration and submission. To challenge these venerable relics in the past was to banish apostates to political deserts and social caverns. The boldest tax heretics have wound up in the hoosegow.

Lone taxpayers need not, however, step into the path of an onrushing IRS Freightliner. It is not recommended for patriots to stop paying income taxes a la Irwin Schiff on the less than thin chance that the courts would enforce the Fourth and Fifth Amendments to the Constitution. Few of them would relish sharing a prison cell with the quixotic old tax warrior.
For any chance of success, a new strategy must be delicate, uncomplicated, and popular. Ordinary workers will not respond to confusing intellectual appeals. Rather, they answer pleas of the heart and belly. On that front, suspending income taxes briefly, say for one year, would attack the foundation which permits a misguided government to burden average Americans improperly, to wit, obedient taxpayer submission. If that could be done in a way that would not invite immediate IRS audits, it would reward taxpayers to cease their docility. For their hearts it creates an opportunity to get even for having to bankroll the bungling and shady dealing of politically connected tycoons.

Strangely, income tax suspension is quite possible in congress at this auspicious moment, because bluntly, it can buy many more votes than bailouts and subsidies can buy back home in congressional elections. Is there any question that the average taxpayer would favor keeping thousands in his or her own earnings? Safety in numbers and anonymity would protect each voter from greedy IRS clutches. Showing exploited subjects how to chastise their overlords and peacefully reward themselves in the bargain can generate mass support. The largest interest group of all is the one that pays for all the rest. As such, it is strange they have not effectively hawked their votes in the congressional marketplace. It might be an amusing change of pace for the goats to nudge their masters as they stoop to fill the hog trough.

As for whence the funding for such a tax vacation, need taxpayers be any more concerned than any of the tax consumers? It is not the fault of tax mules that tax hogs fell for the bogus sales pitch by the brokers of forced labor on the campaign trail. Nor is it puzzling that the brokers and their enforcers always reserve the biggest cut for themselves. What matters is that the public end the official presumption of tax submission to finance any government scheme no matter how unsound, impractical, or dishonest.

A one year halt to withholding would at once line the pockets of average citizens, stimulate the economy, and turn the tables on the powerful. Consumption of goods and services would increase widely, immediately, and relentlessly; which in turn would boost production and employment. More deposits in neighborhood banks would increase credit as well throughout the economy all the way up to the big banks, but from the bottom up, not the top down. The banks would get their bailouts, but only after the people got theirs.

The big bank bailouts have encouraged bad investment by removing the risk and dumping the losses on taxpayers. The latter have a strong incentive to avoid high risk investments, for they are limited to using only their own earnings. That is why investing in the people by lifting taxes for a while would ensure a much more robust and steady recovery. It would also bolster bank assets indirectly in a way that would curb their appetite for gambling, because the money would come to them, not as political favors, but when they earn it in fair competition.

There would be tremendous savings in compliance and enforcement costs. Equally important, power would spread out from the center, creating less dependence on Washington and improving security by disbursing influence away from one exalted power center. That would make it difficult, if not impossible for determined terrorists obsessed with decapitation to cripple the nation in one stroke, something quite possible now.

Greater trade and credit would prevent the need for future bailouts. Voluntary alternatives to empire, war, and forced redistribution might even gain cachet, and social entrepreneurs could better afford to initiate them. Those who join a campaign to suspend the income tax should, therefore, resolve to replace forced public assistance with their own investment in voluntary development leveraged with social market ingenuity.

An organized push to defer income taxes would show the people at once how to reward themselves and harness their so-called government servants, for it would strengthen the political connection to the government of the people who finance it, not as slaves, but as masters.
A drive to postpone income taxes would also augment the move in congress to audit the Federal Reserve. It would attack the same unrestrained banking power from a popular angle with very effective incentives. Without the income tax to pay interest on the national debt, the government is bankrupt and must seek alternatives to credit expansion, like reducing the empire, ending wars, downsizing corporate welfare, and selling uncompetitive, subsidized, and protected government businesses. That would weaken its ability to promote and enrich a financial oligarchy over the very people who pay for it. It might even rekindle interest in the Liberty Amendment.

There is no longer an excuse for taxpayers to whine about bailouts, subsidies, and protections for favorites when they have a way to end them post-haste. Nor is there any need to accept a long, slow recovery designed by a bank bought government when grass roots action can rejuvenate the economy sooner on sounder ground and reestablish who rules the roost.

Just as auditing the Fed might lead to abolishing it, so also might stopping income taxes briefly lead to ending them for good. Both goals are quite possible down the road, and a vigorous push for each will strengthen the drive for the other.

A petition can get the ball rolling and educate the public. Here is an idea for one that could disturb the peace in congress for the coming elections.

1. Whereas the federal government obligates citizen taxpayers to fund at great loss in lives and dollars two aggressive foreign wars without congress declaring war as prescribed by the Constitution;

2. Whereas the federal government forces citizen taxpayers to support a huge empire with over 700 military bases in foreign lands and occupation armies in Western Europe, Japan, and Korea over half a century after hostilities have ceased;

3. Whereas the federal government coerces citizen taxpayers to bail out, subsidize, and protect unsound banks and corporations at great moral hazard and economic cost;

4. Whereas the federal government makes citizen taxpayers pay for economic stimulus programs that benefit corporate, labor, and bureaucratic elites at a net loss to the general economy;

5. Whereas the federal government compels citizen taxpayers to subsidise favored recipient, bureaucratic, professional, and corporate interests;

6. Whereas a citizen taxpayer bailout would stimulate the economy at its foundation of depositors, consumers, social entrepreneurs, investors, and job creators;
We the citizens of the United States petition congress to sponsor a bill to suspend the federal income tax for one year.

The general public interest may only come about fairly when citizens choose freely how to use their own earnings. That use would be superior to one in which the state forces wages away from workers to benefit someone else, whether it be for those providing the compulsion service, corporatists, cooperative special interests, or the initiators of wars. That abuse attempts passing backward from wrong to right. Buying taxpayer votes with the fruits of their own labor is morally better than buying other people's votes with it. We cannot build a moral world on an immoral foundation.