Is the IRS Unconstitutional?

They come around with almost the same annual regularity as Christmas or New Years – the arguments that the US tax system is illegal, unconstitutional or, one of my favorites, dependant on the voluntary participation of the tax payer.

This year the anti-tax/anti-IRS voices seem particularly loud as they rally around a couple of the more visible candidates for the Republican nominee for president – Ron Paul and Mike Huckabee. While Huckabee’s tax proposal might be a softer version of Paul’s slash and burn vision of the IRS, both have attracted the admiration of disgruntled tax payers of all stripes.

But under its current charter the IRS feels secure. With equal regularity although with perhaps a little less attention, comes the IRS’s rebuttal to these accusations. The Truth About Frivolous Tax Arguments is a fascinating read. It goes way beyond the “Oh, please” reaction that would be mine if addressing these arguments were my responsibility. The document meticulously examines and refutes the most common of these arguments.

Ron Paul Backs Down on IRS Position

In my last entry I promised to take a closer look at Ron Paul's position that the IRS should be shuttered. In a combination of promising to return the US's coffer-keeping to the perfection of a yesteryear that never actually existed and some really fuzzy math, Paul's website laid out an interesting if overly simplistic argument for getting rid of income taxes.

I planned to spend this month examining this position and exploring its feasibility from the perspective of political, economic, business, and international relations concerns. But that isn't going to be.

For whatever reason, Paul's site has removed that language and replaced it with some mealy mouthed complaints about high taxes. I'm fighting the temptation to take credit for this apparent reversal of positions in the Paul camp by threatening to put his plans for closing the IRS under a microscope.

RIP IRS?

Most Americans see the IRS and paying taxes as a necessary burden of living in society; most but not all.

Ron Paul, the libertarian candidate for the Republican presidential nomination, has garnered a lot of attention lately. His primary claim to fame has been his firm stance against the increasingly unpopular US occupation of Iraq. While this position has brought him support from voters of all political stripes it is some of his other positions that many find rather jarring.

One of these is his firm belief that the US government has no need for and should do away with the IRS. In an age when no working Americans can remember not paying an income tax to the IRS this can seem startling and a little exciting. Paul’s position, as laid out at his website RonPaul2008.com, is that every working American should bring home 100% of what they earned.

There’s a seductive quality to his position. During the first one hundred plus years of the Union, Americans paid no income tax to the Federal government. To varying degrees most of the US treasury came from tariffs. It worked then, Paul argues, and it can work again.

But a deeper look at this proposal reveals problems from many perspectives - political, economic, business, international relations, etc. Over the coming weeks, I’ll take a closer look at the potential impact of shuttering the IRS.