Democratic Party Should Embrace Major Tax Reform

The Democratic Party needs to support significant tax reform, perhaps even the abolition of the income and labor (FICA) taxes in favor of a European-style value added tax (which gives people more latitude to reduce their taxes by savings behavior, something we should be promoting in a country that has become so dependent on foreign creditors). It is quite clear that the Republican Party has been captured by a corrupt elite who are using the instruments of power to steal tax dollars for their own personal gain, so there is virtually no chance that tax reform will come from that circle. Nevertheless, I believe there are a lot of American citizens who feel very passionate about the need for a major overhaul of the tax system, for ending the intrusiveness of the tax bureaucracy*, and for creating more fundamental incentives for savings.

*One of the great tragedies of the tax system in the U.S. is that it has become the foundation for big, intrusive government. People fear the I.R.S., because the agency has enormous power and latitude. The I.R.S. is so powerful that it can punish citizens even when I.R.S. employees make mistakes. (If you call the I.R.S. for tax advice, beware. One-third of the time they screw up and, yes, you are responsible if foolish enough to follow their incorrect advice.) There is a quote I recall from a trailer to the movie V for Vendetta (which I have not seen) that was quite poignant: "People should not fear their government. The government should fear the people." Well, that sounds about right. The government needs to protect the Bill of Rights and other of the citizenship rights that make up the core of the American value system, but it should not start to become above the people, above the constitution. One way to help make this a reality is to get rid of the tax bureaucracy. Thus, tax reform could simultaneously change the burdens placed on the people, create incentives to save, and improve our freedoms by eliminating the bureaucracy.