Senator Paul Aims to “Blow Up the Tax Code and Start Over”

by Josh Guckert

In an opinion piece for the Wall Street Journal late Wednesday, 2016 Republican Presidential Candidate Rand Paul outlined the tax plan which he will formally announce Thursday. The plan, according to Paul, would cut over $2 trillion in taxes and would repeal the entire IRS tax code, replacing it with a low, broad-based tax of 14.5% on individuals and businesses.

The proposal also eliminates “nearly every special-interest loophole,” as well as the payroll tax on workers, gift and estate taxes, telephone taxes, and all duties and tariffs. All deductions except for mortgage and charities would be eliminated. The first $50,000 of income for a family of four would not be taxed. For low-income working families, the plan would retain the earned-income tax credit.

Paul’s ambitious plan, entitled “The Fair and Flat Tax,” is sure to make waves in the 2016 election. The candidate becomes the first in the race to introduce a nuanced and comprehensive strategy to address the burden of ever-increasing taxation. In crafting his tax plan, Paul enlisted the help of some of the most legendary laissez-faire economic minds in recent history, including former presidential candidate Steve Forbes, Heritage Foundation fellow Stephen Moore and former Reagan adviser Art Laffer.

As Paul explains in his WSJ article, when government takes as much as it does now, it no doubt stifles innovation and growth. With the highest corporate tax in the world, companies are given a disincentive to invest in the US. Accordingly, perhaps millions of jobs can be lost due to unwise tax policy.

Just as important are the implications for civil liberties and Due Process when the tax code averages nearly one change per day. The wealthy are able to afford tax attorneys and accountants to find loopholes and ensure that their finances are properly documented; meanwhile, those in the middle-class, without as many luxuries, are left to squander in the many pages of incomprehensible language. In fact, many of the loopholes which benefit the rich were put there by the rich, as they can afford to send lobbyists to Washington to guarantee that any changes affect their competitors and not themselves. By enacting a tax code which is simpler, there is significantly more equal justice under the law.

In the same vein, a code which is this complicated can result in a scenario where no one is innocent because no one is quite sure what the “correct” way is to file taxes. With this in mind, scandals involving the IRS targeting “disfavored” groups like the Tea Party can become more prevalent. By placing numerous hurdles in front of Americans, authorities are able to engage in selective enforcement.

The history of the income tax and the IRS in the United States is one which is long and complicated. Originally enacted during the Civil War, the income tax was but one bracket and was used only as a means of raising emergency revenue for the war effort. However, over time, the number of brackets expanded, and soon, it was determined that a peacetime income tax was necessary, resulting in the ratification of the Sixteenth Amendment in 1913. In the century since then, the IRS bureaucracy has become increasingly bloated and complex, and has found ways to entangle nearly every aspect of Americans’ lives.

It is for these reasons that Senator Paul’s plan is such a welcome addition to the presidential campaign. While a majority on the Democratic side have no other plan than to tax the rich more, few Republican candidates have exhibited the ability to successfully market a fairer, simpler tax system to the electorate. Senator Paul’s tax plan combines tried and true concepts with new and novel ones in order to create a tax system that will liberate citizens from the anti-liberty labyrinth that is the status quo.