More on Scarface

I read a little on Al Capone after my last post, and it's true:  despite being connected with dozens, perhaps hundreds of murders, not to mention other crimes, they finally got Capone on tax evasion.  Oh the usefulness of the IRS!

But, if it weren't for prohibition, guys like Capone would have never gone into business.  It was the prospect of huge profits from dealing in an illegal substance (that nonetheless was used by the majority of the population for thousands of years) that brought the mob into it.  Sure, they could've done the numbers racket or other penny-ante stuff, but organized crime would have never reached the scale that it did without prohibition.

So--create the problem through government stupidity, and solve it with government power.  Works for me.

Frankly, I'll take Capone.

Flat tax

Gary North, in an essay entitled, "Tax Payment Calculator (Rigged):  4 Presidential Candidates", opines:
"I would go with Cruz's plan: a flat tax. This honors the principle of the rule of law: all people pay the same percentage. I call it the principle of the tithe. To vote to impose a tax on someone else requires that you vote to pay the same. This principle is never honored in politics...This would involve massive spending cuts. I'm for that, too. But Cruz does not mention this in his speeches."

Yes, I'm for a flat tax too.  I agree with Gary's principle of voting for yourself what you vote for others.  BUT...I disagree that lower taxes "would involve massive spending cuts".

We'll just do what we've been doing, oh, since the '50s at least, and just paper over the difference between collections and spending with money creation.  Don't just take my word for it, here's what Alan Greenspan recently said: 

Interviewer: Are you optimistic going forward here?

Alan Greenspan: No, I haven't been for quite a while and I won't be until we can resolve the entitlement programs. Nobody wants to touch it, but it's gradually crowding out capital investment, and that's crowding out productivity, and that's crowding out the standards of living… and you get an extraordinary demand for entitlements and all sorts of programs which are not funded. Why? Because why do they need to be funded? We just print the money.

And frankly, if that flat ten percent leaves NO loopholes at all, except for the $10k deduction for everyone, I think that perhaps revenue collection will be "enhanced", to use a governmental term.  And, more importantly, 95% of the IRS will be left without justification for its existence.  Just the prospect of putting 95% of that organization's bureaucratic parasites out on the street is enough for me to vote for the flat tax (but not for Cruz).

Just to make my position perfectly clear: I think that the income tax is a smokescreen.  It's a smokescreen to obscure the amount of money creation that's been going on.  If there were no income tax, and government carried on business as usual, people might get wise:  "Where's the money coming from?"

To further clarify my position:  IMO, tax collection is the least important of the IRS's functions.   Its primary purpose is to ride herd on the citizenry, and keep them in line.  Case in point: the administration's siccing the IRS on conservative groups they didn't like.  If you REALLY want to nail someone, forget the FBI--send the IRS after them.  (Didn't they finally get Capone on tax evasion charges?  That speaks volumes.)

The income tax is just a not-so-subtle yearly reminder of who's boss.