Texas Senator Ted Cruz was the acknowledged star at CPAC this week and for good reason. His unapologetic advocacy of conservative values and his ability to clearly convey his message orally, makes him unique in Washington, DC. It’s why both liberals and RINOs fear him. When he speaks, people listen and understand and his speech at CPAC was no exception.
Senator Cruz makes me proud to be a Texan again, after years of ignominy, over my state sending RINOs like Cornyn and Hutchison to the Senate. I was proud to campaign for him, I was proud to vote for him and I am proud that he is now my U.S. Senator.
That said, he’s not perfect.
In fact, in one area, he seems to completely miss the boat. At CPAC, he spoke about how we win, about courage and principle and how to inspire young people and others and he was spot on. He spoke about defending the Constitution, expanding school choice, auditing the Fed, passing a balanced budget amendment, term limits and more. In each case, his message was clear, concise and factual. But when he spoke about taxes, he made two statements, only 10 seconds apart, that were exactly 180 degrees at cross purpose.
Listen to his speech to CPAC here. It’s truly inspirational, with the exception of 18 seconds, starting at the 13 minute mark.
Nine minutes and 38 seconds into his speech (exactly 13 minutes into the video), Senator Cruz says, “We need to abolish the IRS” and quite deservedly receives loud cheers for that statement. But as the cheers die down, he follows that statement with, “We need to adopt a simple flat tax that is fair, that every American can fill out his taxes on a postcard.” Again, he received loud cheers. It seems that both Cruz and many of the people at CPAC missed the paradox of those two statements.
Just take a moment and think about those two statements. Then ask yourself this question.
“If you fill out your tax return on a postcard, how will the government know that what you put on that postcard is accurate, if there is no IRS to audit those postcards?”
Think about it…
As long as the government taxes income, be it progressive or flat, there will, by necessity, be an IRS. You cannot separate the two. They are joined at the hip.
Sure, with a truly flat income tax, you should be able to fill out your income tax return on a postcard or at least, on the online version of a postcard. But there’s a flip side to that convenience that most people either miss or choose not to consider.
Since everyone’s flat income tax return will be far simpler, it will take the IRS much less time to complete all audits. Today, audits on a billionaire can take weeks or even months. Audits of millionaires can take days or weeks. Under a flat income tax, those audits will take maybe a few hours. So ask yourself what you think the IRS will do with all that spare time? Have you ever heard of a government agency that decided to cut its staff, because there wasn’t enough work for them all?… I didn’t think so.
The IRS has to justify its existence. So faced with all that spare time, thousands of idle auditors, agents, and attorneys and fewer places for them to find hidden money, they’ll certainly use all that spare time to audit far more taxpayers than they do today, all across the income scale.
FACT: Far from eliminating the IRS, a flat income tax will significantly increase the chances that you will face an IRS audit.
The obvious problem is that the flat income tax talking points have been around for so many decades that honest fiscal conservatives, like Senator Cruz, have let the prevalence of those talking points influence them to not dig deeper and look at the flip side of those talking points. I know this for a fact, because I used to be one of those people. Before I started looking deeper at it, I supported a flat income tax. I know from sad experience that it’s really quite easy to be fooled by the flat income tax spin.
The flat income tax is, in fact, noting but a fall-back position for the tax and spend crowd. They tell us that a flat income tax is an interim step. But that’s really just a scam. They don’t want to implement any kind of tax reform. But, if forced to do so, they want it to be a flat income tax, for two reasons and neither has to do with it being a step toward comprehensive tax reform.
- They’ll use a flat income tax as an excuse to delay any further talk of the FairTax (HR 25 / S 122) or any other comprehensive tax reform, claiming that we have to “give the flat income tax time to work.” They will then drag that “time to work” out for several years. In the mean time, they’ll belittle members of Congress, who continue to push for the comprehensive tax reform, claiming that they don’t understand that we have to give the flat income tax “time to work.” In this regard, the purpose of a flat income tax is to stop the momentum of the FairTax and if passed, it will do precisely that. Like it or not, many uninformed voters and congressmen will buy into that, “give it time to work” argument. As we can plainly see, even our TEA Party banner-carrier for fiscal responsibility has fallen for some of the flat income tax spin, already. So if a flat income tax should ever become law, you can count on it that comprehensive tax reform WILL lose significant momentum.
- Most of the flat income tax advocates (a.k.a. the “Tax and Spend” crowd) also know that in a few years, after a flat income tax has effectively slowed the momentum of the FairTax or any other kind of comprehensive tax reform, they can easily start adding tax loopholes back into the income tax, along with new tax brackets, claiming that they are just tweaking the flat income tax, to make it work better.
Always remember that the whole idea of a flat income tax, is to be a fall back position that will preserve the ability of the tax and spend crowd to easily get back to where we are today, while undermining comprehensive tax reform. Unfortunately, it’s working.
The tax and spenders in the leadership of both parties are deathly afraid of the FairTax, since it is the only tax reform proposal that represents a significant loss of political power for Congress. That’s because, under the FairTax, the IRS is abolished, as there will be no more excuse for it. That means no more tax lobbyists and no easy way to pay back political favors. Furthermore, they won’t be able to get jobs as lobbyists, when they leave Congress, because 80% of lobbyists are tax lobbyists and those jobs will be gone.
Up to now, the tax and spend crowd has been unable to slow down the FairTax. In fact, it’s gaining momentum. A flat income tax is the tax and spend crowd’s last hope for stopping comprehensive tax reform.
Now I don’t believe for a moment that Senator Cruz wants to undermine comprehensive tax reform. Quite the opposite, actually. But the mere fact that one of our most ardent fiscal conservatives can be seduced to champion a proposal that will undermine comprehensive tax reform, just shows the power of the flat income tax spin. How many other members of Congress have been suckered by the flat income tax propaganda?
As concerned taxpayers, we need to make sure that our elected representatives don’t fall for the flat income tax scam. We need to contact our elected representatives and tell them that a flat income tax, far from qualifying as comprehensive tax reform, is actually designed only to undermine comprehensive tax reform. If enough of us do that, they’ll take the time to actually dig into the flat income tax and learn for themselves, what a scam it really is.
When I’ve talked with Senator Cruz, in the past, he has always been open to considering what I’ve had to say. So I’m contacting his office, to explain what I’ve discussed above. I’m sure he’ll listen and eventually take action. But the more people who point out to him, the flaws in the flat income tax, the sooner he’ll take the time to make a closer examination of the flat income tax and see what a scam it is, under the surface.
Cruz is a solid fiscal conservative, who’s already on board as a co-sponsor of the FairTax (S 122), so it’s not like he needs a lot of convincing. We just need to get him and other fiscal conservatives in Congress to take a critical look at the whole concept of a flat income tax. When you get past the spin and a cursory look at its outside appearance, the flat income tax concept falls apart of its own weight.
Once we get fiscally conservative congresscritters off top dead center on the flat income tax, passing true comprehensive tax reform that really does abolish the IRS, will be a breeze. Of course, the only proposal on the table that accomplishes that goal is the FairTax.
John Gaver is a long time conservative political blogger and author of ”The Rich Don’t Pay Tax! …Or Do They?“, an Amazon 5-star rated book that examines the disastrous effects of punishing success. After years of research into taxation in its various forms, John has become an acknowledged expert on and advocate of the FairTax. He has been a featured guest on political radio programs, both in the USA and abroad. His public speaking engagements have included Pachyderm Clubs, TEA Party groups and 9-12 organizations.