Ron Paul's Texas Straight Talk - A weekly Column

March 12, 2001

Bush Tax Plan Only One Piece of the Tax Cut Puzzle

This week, I cast a vote in favor of President Bush's tax cut proposal which passed the House of Representatives on Thursday. After eight years of an administration set on reckless spending increases with no regard for the hard-working taxpayer, it is refreshing to see the new President pushing for tax relief. The President's tax plan is very straightforward. It reduces all tax rates, so everyone paying taxes will see some benefit from the plan.
Those opposing the tax cut said that it would "cost the government too much" and hurt the economy. The truth of the matter is that the economy is hurt when the government takes money out of the paychecks of private citizens that they would otherwise spend, save or invest. The government has never created anything, much less economic prosperity. The government can only take from one and give to another.
Only the private sector can create growth, a lesson that the politicians and bureaucrats in Washington would be wise to learn. The average American pays about 1/2 of their income in federal, state and local taxes every year. This is a clear and present danger to the liberty of the individual. We need to free people from the chains of over-taxation and allow them to go back to work for themselves instead of the government. The Bush tax plan is a step in the right direction, but we must do more to put money back into an individual's paycheck.
Along with reducing tax rates, we must rid ourselves of the estate tax and end the terrible practice of imposing a tax on families when a loved one dies. This tax penalizes thrift and savings, denying Americans the right to pass their property to their children. It forces the sale of many small family businesses when heirs cannot pay the estate tax bill. The estate tax simply takes money away from families and puts it in the hands of the government. There is no moral or economic justification for estate taxes and they must be eliminated.
The capital gains tax is another onerous tax that must be removed. Like the estate tax, the capital gains tax punishes individuals for saving and investing wisely for themselves and their families. The capital gains tax was once thought of as a tax on the rich. However, with more and more Americans investing in the stock market and relying on IRA's and 401K's to fund their retirements, there is growing opposition to this burdensome tax that actually discourages individuals from being self-sufficient.
Of course, the ultimate goal is the entire elimination of the federal income tax. Regardless of the rate reductions in the Bush plan, the IRS remains an uncontrolled bureaucracy. People have become so disillusioned by its current structure that support for a flat tax or a national sales tax has finally gained momentum. It is important to remember that the federal government operated for more than 130 years without an income tax. It is time to return to a simple, fair method of funding the federal government. An elimination of the income tax, however, would require a drastic reduction of spending in Washington. A responsible federal government that obeyed the limits placed on it by the Constitution could easily operate on a much smaller budget.
Yes, it is true - I have never met a tax cut I didn't like. The American people are over-taxed. The average person pays more to their government than they do for the combined cost of food, clothing, shelter, entertainment and education in a year. The Bush tax plan is a step in the right direction, but we must continue to chip away at the tax system that threatens the freedoms and liberties of hard-working people in Texas and all over America.