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  • U.S. Tax Code, Bernie Madoff Style

    From Monday’s Wall Street Journal:

     If you thought Bernard Madoff’s Ponzi scheme was bad, wait until you hear about the inverted pyramid scheme the federal government is working on. While Mr. Madoff preyed on people who trusted him with their money, the federal government has everyone’s money, and the implications of its actions are worse.

    David GothardPicture an upside-down pyramid with its narrow tip at the bottom and its base on top. The only way the pyramid can stand is by spinning fast enough or by having a wide enough tip so it won’t fall down. The federal version of this spinning top is the tax code; the government collects its money almost entirely from the people at the narrow tip and then gives it to the people at the wider side. So long as the pyramid spins, the system can work. If it slows down enough, it falls.

    This isn’t about rich v.s. poor, it’s about designing a system that is sustainable and fair. Heritage’s Curtis Dubay recently blogged on this and offered suggestions for President Obama’s vague tax reform panel. Also, CATO recently made a new video on the convoluted tax code:

    [youtube]http://www.youtube.com/watch?v=vGIfbAt8voU[/youtube]

    Posted in Ongoing Priorities [slideshow_deploy]

    11 Responses to U.S. Tax Code, Bernie Madoff Style

    1. Barb -mn says:

      WE'RE SICK OF IT AND REFUSE TO ACCEPT IT.

    2. juandos says:

      "If you thought Bernard Madoff’s Ponzi scheme was bad"…

      Madoff was an amateur piker compared to FDR…

    3. Diane Long Island says:

      I don't think the president gets it. Our credit is

      blocked. We need to stabilize the banks to get money and spend money. We cannot flourish without

      credit. The money and all the new jobs are for big government. we must stand united as a people and fight to cut all taxes, No national health care, no more debt,No more spending, No to a socialistic America,

      We want fair and balanced and a FAIR TAX, and No capital gains tax until 2010

    4. Alex, Coral Springs says:

      Madoff ain't got nothing on this corrupt government. He probably tried to imitate this corrupt government and got caught doing so. Madoff looks like an angel to what's over in Washington right now.

    5. Karl Froehlich, Arli says:

      Flat Tax – Flat Tax – Flat Tax and make the Obama cheaters pay & go to jail. Just like any real citizen would have to do.

    6. Grace, Florida says:

      I definately think Flat Tax is at least something to be considered. I don't think that will happen with this administration. They are moving so fast they don't even know what's going on. We've got to stand up against them.

    7. John malone new yor says:

      It just to show we should adopt Obama chant,change,change,change, we want change both republicans and democrates do the same thing,change In the opening lines of the declaration of Independence. Governments are instituded among men,driving the power from the consent of the governed. That whenever any form of government becomes destructive of these ends

      It is the right of the people to alter or abolish it,and to institute new goverment,laying it foundation on such principles and organizing it's powers so that the safety and happiness is insured.

    8. Sheri, Woodward, OK says:

      The largest ponzi scheme in American history was not orchestated by Madoff, it is the Social Security System. It could possibly have been successful if the feds had kept their thieving hands out of the money. But there is no way this system will survive. Every American who has been forced to pay into this system should be outraged. The government has stolen from citizens just as Madoff has except it is worse because the victims here did not voluntarily contribute.

    9. duelles, Santa Fe, N says:

      We better be careful what we wish for. We're already being chastised for saving money as it slows down the economy. I am for the removal of current tax codes and the direct taxation of people. The taxation of various economic activities is appropriate and fair. Punishment and rewards for behaviors should and will come down hard on our congress if I have anything to say about it.

      Thank you for your good information and relentless pursuit of right thinking.

      tax code – Oooofah!

    10. Lyn, Dayton, OH says:

      A Flat Tax only answers SOME of the problems and it is inherently UNFAIR to ‘the poor’ unless modifications are put in place. When the government starts making ‘modifications’ to anything the original often becomes cumbersome if not unrecognizable. (According to the US Government Printing Office, the IRS’s portion of the current tax code is 13,458 pages long. The full text of Title 26 of the United States Code [the part written by Congress] is a mere 3,387 printed pages, bringing the adjusted gross page count to 16,845.)

      The Fair Tax has been extensively researched, studied, and analyzed. It would put our economy on the path to recovery quite quickly and permanently. Government funding would remain at least at current levels (revenue neutral). The Fair Tax would drastically reduce politician’s power over ‘the people.’

      The United States, with The Fair Tax, would again become a Mecca for global business/investment by removing all federal corporate tax. (The U.S. currently has the second highest corporate tax rate in the world. No wonder we are losing jobs overseas!)

      The Fair Tax is READY TO GO!! From http://www.fairtax.org: “The FairTax Plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue replacement, and, through companion legislation, the repeal of the 16th Amendment. This nonpartisan legislation (HR 25/S 1025) abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities. The IRS is disbanded and defunded. The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.”

      PLEASE, please, go to http://www.fairtax.org to learn about this awesome plan:-)

    11. Ross, Bradenton, Flo says:

      It is time for a national sales tax or a flat tax, Today's tax code is sophistry at its finest and most destructive for individual liberties and privacy. Personal liberty and privacy was once (and to many, still is) a gift from God embodied by the Constitution of the United States. Wars were fought over its sacredness.

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