Ron Paul's Texas Straight Talk - A weekly Column

March 20, 1997

The Worst Day of the Year

Everyone is just a little apprehensive; tense, irritable. Sleepless nights have passed and everyone is well aware of what is lurking around the proverbial corner of the calendar.

It's not the end of the world (though it sometimes seems that way) and it's not a natural disaster (though sometimes the results are similar). No, what is lurking around the corner is Tax Day. April 15 is a day Americans have grown to fear. Fear because it means complicated forms, a loss of money, and the very real possibility that somewhere an IRS agent may audit every aspect of someone's life.

It is a very sad comment on the size of our government that we now tax and regulate (which is another form of taxation) so much that the average American now works through early July just to pay their levy. Stated a different way, the average worker spends more than half of every work day working for the government. That is unreasonable. For it means that you must work until shortly after lunch time before any money you earn actually goes to the well-being of yourself and your family.

The Founding Fathers did not have this current state of taxation in mind when the high taxes of England drove them to rebellion and the creation of our nation.

Right now there is little talk of doing much to cut taxes. The politicians here in Washington just don't want to use the "political capital" to address the issue. Sure, there is a lot of talk about tinkering around the edges - and if it helps people in even a small way, I am supportive - but there is little resolve to address the real problems.

Government has expanded far beyond the size outlined in our Constitution, and has taken on powers (which necessitate spending) without authorization. Until we address the role of government, until we can calmly address the question of "Should the federal government do the things it is now doing?", we will never be able to adequately address the issue of taxation.

Debates over how we collect taxes - whether by a "flat tax" or a national sales tax - are interesting, but often tend to cloud the real issue. The real debate should be over the question, "Why is government this big and spending this much money?"

While I do not believe this debate will come soon and without major economic problems prompting it, I am not content to simply moan about the problem. I have signed on to several pieces of legislation which will, if passed, make a significant difference in the lives of everyone who pays taxes.

The first piece of legislation is the Family Preservation Act. This legislation will repeal the Estate and Gift Taxes, which I refer to as "death taxes." These taxes are the most despicable, for the laws assume that after you have worked hard all your life, prepared for your family's future, that when you die the government has first claim to everything you own. Not only do they tax your productivity while you are alive, they tax your accumulated "after-tax" wealth once you have died, thereby punishing your spouse and children - it is as if the government owns your life, and has a fundamental right to all you have accomplished. The hardest people hit by these taxes are not the rich, but rather the middle-class Americans who own farms and ranches right here in the 14th District.

A second piece of legislation I will be supporting is the Capital Gains Reduction Act. Right now, the profit someone may make off of selling a house, trading stocks or other activities, is taxed at 28 percent or higher. This bill would cut that rate in half. Again, the people hurt most by the capital gains tax are not the wealthy, but the middle and low income families. When a parent has provided for their child's future by investing for college, it is immoral that the government should be able to step in and take almost a third. The taxes paid on those gains could have paid for an extra semester, or more.

A third piece of legislation I am going to be supporting may not at first glance appear to be related to tax reduction, but in fact it is intimately tied to the issue. The legislation is called the "Enumerated Powers Act," which will require that every bill brought before the Congress must contain the exact section of the Constitution which allows for that measure's existence. If a bill fails to include that citation, the bill will not be considered. The importance is this: If we followed the Constitution in the legislation presented, taxes would be only a fraction of their current level. By requiring that every bill brought before the Congress specifically cite the Constitution, it will at least force Members of Congress to consider exactly what it is they are doing. Right now, very few ever think about what gives them the power to regulate, spend and tax.

As April 15 grows near, I hope that everyone looks very closely at how much money they pay to the government - either by a check written at midnight on April 14th, or taken quietly from their paycheck each week - and then consider this question: Could the money be better used by you than the ways in which the government will use it?

The economist Adam Smith once wrote that, "The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would… assume an authority which could safely be trusted to no council and senate whatever, and which would nowhere be so dangerous as the hands of a man who had folly and presumption enough to fancy himself fit to exercise it."

It is my contention that you are smarter than all the politicians, especially where your life and money are concerned. Right now, the best thing government can do is cut your taxes, get out of the way, and applaud as you succeed in life and prepare for your family's future.