Letter to an IRS agent
I recently wrote this to my friend who works for the IRS.
Taxes are necessary, especially for the national defense. Two cases to support this: The Irish of the 8th and 9th century, and the American Indians of the 14th through the 19th. The Irish and the Indians lacked a centralized government, and therefore paid no taxes. Because of this, trade flourished and war was non-existent among them. However, both societies were destroyed by outsiders who paid taxes, and who therefore had the means to support a well-trained army.
Lesson: pay enough taxes to provide for the common defense.
The question now arises: how much should the people pay?
This is where your job comes in. You might not get to set the tax rate, but it is your job to make sure people pay up. Why does an ordinarily honest citizen risk “stealing” from the government? Because a man evades taxes that he considers unreasonably high. In other words, tax evasion does not prove that Americans are criminals; rather, it proves that American taxes are too high.
You can prevent tax evasion in two ways:
1. Punish the tax evader.
2. Lower taxes.
Your job is to punish evaders. I beg you to be merciful in the fulfillment of your duties, and to consider the following:
1. Lower taxes will generate more revenue.
Reagan cut taxes in the 80’s in order to increase revenue. Cutting taxes to increase revenue sounds like “voodoo economics,” but the Laffer curve and history both show that a 10 or 12% tax rate will generate as much revenue as a 70 to 80% tax rate. When taxes get too high, the rich leave the country or find loopholes, and others lose incentive to make money.
2. Tax-evasion is the ultimate vote in a democracy.
Our Founding Fathers rebelled against their government, and started their own country, on the issue of taxes. They were enraged that they were taxed without consent. In our republic, a man votes for representatives to take care of his day-to-day political matters, but the ultimate authority of our country, and the legitimacy of any official, resides in that man and his fellow citizens. If a man decides to evade taxes, he is simply withdrawing his consent. He is voting no. He thinks his representatives have gone too far. If we punish the man who refuses to pay without consent, we punish a son of liberty, the heir of our Founding Fathers.
We Mormons pay 10%. This, along with other—voluntary—contributions, is enough to fund a worldwide organization, provide the quickest disaster relief on the planet, and to feed, clothe, and educate the poor. The church has no need to send auditors to investigate whether members are paying their dues—it’s an honor system.
Such systems have worked in the past. Queen Elizabeth taxed on the honor system, and she turned a little backwater former-colony of Rome into the British Empire.
So, what I’m really saying is that your job isn’t necessary. Lower taxes would make our country richer, would practically dissolve the incentive for evasion, and would free up your mind and talent for entrepreneurship in the private sector.
Keep this in mind the next time you’re auditing some poor sucker, who is just trying to support his family by keeping what he has honestly labored for.
p.s. I’ve been farming lately, and I thought that if the government wanted to tax me at, say, 30% — I would fence off a third of my field and till the rest. When the tax-man came on April 15th, I would point to the fallow third of the field, and say “take whatever you want.”
Taxes are necessary, especially for the national defense. Two cases to support this: The Irish of the 8th and 9th century, and the American Indians of the 14th through the 19th. The Irish and the Indians lacked a centralized government, and therefore paid no taxes. Because of this, trade flourished and war was non-existent among them. However, both societies were destroyed by outsiders who paid taxes, and who therefore had the means to support a well-trained army.
Lesson: pay enough taxes to provide for the common defense.
The question now arises: how much should the people pay?
This is where your job comes in. You might not get to set the tax rate, but it is your job to make sure people pay up. Why does an ordinarily honest citizen risk “stealing” from the government? Because a man evades taxes that he considers unreasonably high. In other words, tax evasion does not prove that Americans are criminals; rather, it proves that American taxes are too high.
You can prevent tax evasion in two ways:
1. Punish the tax evader.
2. Lower taxes.
Your job is to punish evaders. I beg you to be merciful in the fulfillment of your duties, and to consider the following:
1. Lower taxes will generate more revenue.
Reagan cut taxes in the 80’s in order to increase revenue. Cutting taxes to increase revenue sounds like “voodoo economics,” but the Laffer curve and history both show that a 10 or 12% tax rate will generate as much revenue as a 70 to 80% tax rate. When taxes get too high, the rich leave the country or find loopholes, and others lose incentive to make money.
2. Tax-evasion is the ultimate vote in a democracy.
Our Founding Fathers rebelled against their government, and started their own country, on the issue of taxes. They were enraged that they were taxed without consent. In our republic, a man votes for representatives to take care of his day-to-day political matters, but the ultimate authority of our country, and the legitimacy of any official, resides in that man and his fellow citizens. If a man decides to evade taxes, he is simply withdrawing his consent. He is voting no. He thinks his representatives have gone too far. If we punish the man who refuses to pay without consent, we punish a son of liberty, the heir of our Founding Fathers.
We Mormons pay 10%. This, along with other—voluntary—contributions, is enough to fund a worldwide organization, provide the quickest disaster relief on the planet, and to feed, clothe, and educate the poor. The church has no need to send auditors to investigate whether members are paying their dues—it’s an honor system.
Such systems have worked in the past. Queen Elizabeth taxed on the honor system, and she turned a little backwater former-colony of Rome into the British Empire.
So, what I’m really saying is that your job isn’t necessary. Lower taxes would make our country richer, would practically dissolve the incentive for evasion, and would free up your mind and talent for entrepreneurship in the private sector.
Keep this in mind the next time you’re auditing some poor sucker, who is just trying to support his family by keeping what he has honestly labored for.
p.s. I’ve been farming lately, and I thought that if the government wanted to tax me at, say, 30% — I would fence off a third of my field and till the rest. When the tax-man came on April 15th, I would point to the fallow third of the field, and say “take whatever you want.”
Your claim that war was non-existent among the American Indian of the 14th - 19th century is just plain balderdash. Check out "Empire of the Summer Moon" a history of the Comanche Indian tribe through the 19th century. Their society subsisted on the horse, buffalo and war.
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