The New York Times, in a front-page article, reported that General Electric paid no federal income taxes in 2010. Should Americans be angry that one of the world’s largest corporations paid no federal income tax while middle income and upper income Americans pay federal, state and in some cases city income taxes?
In addition, Americans pay Social Security and Medicare taxes, state unemployment and disability taxes, sales taxes and property taxes, and a host of utility and other taxes. In short, Americans pay taxes to all levels of government in order to receive a number of benefits from the “public sector.”
More than 15 years ago, my Tax Free 2000: The Rebirth of American Liberty was published in which I argued we could have a tax-free society. A tax-free society would provide us with all the services we want at low prices, where all able bodied individuals could find a job, where our economy would no longer be subject to booms and busts, where the poor and disabled would receive assistance solely from the nonprofit sector, and where the federal government would not squander trillions of dollars on the welfare-warfare state.
In addition, a tax-free society would end the “free rider” problem. Inasmuch as everyone and every organization would be tax exempt, individuals, families, businesses and nonprofits would have to pay for the services and goods they desire.
A tax-free society would end the redistribution of income and bury for once-and-for all the collectivist philosophy of “from each according to his ability to each according to his needs.” In its place, real philanthropy would take root across America, as efficient and effective nonprofit organizations in every community would replace the unnecessary state and federal welfare bureaucracies. (Nonprofitization would replace Medicaid in a few years.)
Over the next 20 years or so, we will replace America’s two Ponzi schemes—Social Security and Medicare. Throughout society the virtue of saving for retirement and old age medical care would be elevated to its proper role in America—the ethic of personal responsibility.
Abolishing the federal income tax would make it impossible for the warmongers in Washington to send U. S troops to invade other nations without a declaration of war by Congress. There would be no more preemptive wars, period. The federal government would no longer be able to borrow trillions of dollars, because there would be no taxes to pay the interest and principal back. In the meantime, we have to figure out what to do with the $14 trillion federal debt.
The American people would balance the federal budget with fees to “run” the federal government. For example, the gas tax is really a user fee to pay for federal and state highways. Given the conditions of interstate highways around the country and state roads, the “privatization” of roads and highways is an idea whose time has come.
In a tax-free America, the federal government would be so minuscule; the budget would be so small we all should be able kick in a few bucks a year to run DC.
A tax-free society would mean abolishing the Federal Reserve. Returning to the gold standard—real money–would end the “inflation tax” the Federal Reserve has been imposing on the American people for nearly a 100 years. In addition, the manipulation of interest rates would end and the Federal Reserve would no longer impose its “crony capitalism” on Main Street to benefit Wall Street.
In a tax-free America corporate welfare would be abolished; agricultural subsidies would be abolished (no more subsidies for tobacco growers); housing subsidies would be abolished; energy subsidies would be abolished; etc.
In short, America would become a bastion of free enterprise.
Furthermore, the angst over property taxes, especially in New Jersey, would end, as consumers—that’s you and me–would pay for education, police, fire, etc., directly just as we all pay for cable and utilities, etc., out of our own pockets. In other words, we the people would determine the “structure of the market,” not the producers and certainly not the politicians.
GE has shown us the way, but we can all be tax-free and end the waste of money that is now being spent on lobbyists and tax accountants and lawyers. In short, a tax free America would finally realize the State of New Jersey’s motto for the nation—Liberty and Prosperity.