Happy Tax Day!

Each year, Americans slug through the spectacle of filing their taxes, determining if they gave a substantial interest-free loan to Congress’ insatiable spending habits or determining if they owe even more of their hard-earned dollars to the government.



Part of what makes Tax Day so frustrating—other than the realization that more than 3 months’ worth of your income entirely goes to Uncle Sam—is that paycheck withholding makes it seemingly more bearable. That lack of sticker shock is part of what driven up government spending to unsustainable levels.



So what’s the solution? As Jonah Goldberg said in an article a few weeks ago, eliminate the periodic withholding. Or as he said in his characteristic fashion, “No more purchasing the Leviathan State on layaway.”

Goldberg further agitates for moving Election Day to Tax Day, say declaring, “Let’s get what we’re paying for. Sign the check — for the full amount — and write in your preferred candidates on the back of the same check…Abracadabra . . . smaller government, here we come.”



While Goldberg’s suggestion is part satire and mostly unrealistic, citizens across the country today are agitating against our government’s unsustainable spending, realizing that higher taxes are definitely in the clear future. The so-called “Tea Parties” are being held around the country, with the potential to attract hundreds of thousands of taxpayers, all frustrated with the current state of fiscal affairs. No partisan exercise, few establishment politicians have been invited. Here in South Carolina, Governor Mark Sanford and Senator Jim DeMint, two die-hard protectors of the taxpayer, are on the program because they are among the few politicians in state capitols and in Washington that haven’t succumbed to the spend, baby, spend mentality. Here’s hoping the organizers of these events have success today.



Here are few resources to dampen your spirits on Tax Day:



What’s also disturbing, beyond the sheer amount of your income that is seized each year, is the breakdown in federalism and the co-opting of private business and non-profit activities that the government spending creates. Here, Cato’s Chris Edwards notes the enormous number of federal subsidies that represent a confiscation of income from one person or group and a redistribution to another, mostly politically-connected, group. What’s worse is the increase in these subsidies, which already number over 1,000 in the last few months.



Edwards’ Cato colleague Dan Mitchell notes how the tax code corrupts natural market incentives and produces a tax regime that is neither fair nor efficient. Our tax code need serious reform, but the Obama Administration is giving all indication that it intends to push the code in the wrong direction: towards more stagnation, less economic growth, and more government takeover of the economy.



It’s fairly basic economics to understand that high tax rates result in lower economic growth and that complex tax systems move actors from productive sectors of the economy to the non-productive tax field. Here are two reports, one detailing tax competiveness at the international level and one detailing tax competitiveness at the state level, that provide hard evidence in support of that proposition.



While reading much of these materials is depressing, there is hope because there are fantastic proposals out there to change our tax system for the better. What is required is a pro-liberty political party that won’t squander the opportunity when given an electoral majority.

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