Mike Kolls (L) for Congress

United States House of Representatives
Texas District #24 - map

email - Rep@tx24.us

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Real Tax Reform

 

Proper Funding …

A gov’t 1) identifies what it intends to do and has 2) estimated costs to perform those tasks. It then 3) asks representatives to provide their portion of the “needed” funds. I am baffled why this reasonable and rational approach is NOT in place for our federal gov’t.

Simply put, taxes should be raised to fund the planned activities of gov’t. Tax assessments should NOT be a dime more, nor a dime less than “needed”.

The Reality

Yes, we are taxed enough already. Half of us bear the burden for all. This needs to change.

And, the existing US Tax Code is dysfunctional. It is certainly ineffective and even more so, inefficient. At its core, the tax code is a fountain of unintended consequences and crony concessions. Every desired outcome (a foolish notion...) has failed to materialize. Nudging public behavior via “Tax Policy”, is a nonstarter.

Today tax assessments are NOT related to anticipated spending. How is that possible?

Mr Trump's Tax "Plan"?

Is Mr Trump's tax "plan" the solution to all things economic?  NO. [Oct 2017]

The Real Pressure

As bad as the above picture is… there is a darker, more-sinister scandal. Federal spending is out-of-control. Every federal program escapes review, is NOT re-evaluated or analyzed... nothing is corrected. Federal programs run on auto-pilot and extort more tax dollars each year.

The White House has cried for “Tax Reform” [July 2017] to alleviate burdensome taxes (a mere symptom). Surface-level “reforms” will NOT reverse the deeper currents of out-of-control federal spending. If these superficial tinkerings are revenue-neutral or reduce tax receipts, they will further aggravate annual deficit spending... and the massive federal debt.

The pressure is building. Mr Trump's "reform"/tinkering will cause a fiscal explosion. (right)


Tax Reform

In 2017, with an annual deficit and a massive, expanding federal debt of near $ 20,000,000,000,000, wholescale tax relief is a dangerous idea - yugely dangerous.

Federal tax cuts in October 2017? NO.

By 2040 (hopefully), YES...

 


Drain the water / Debt

The National Scandal

The federal gov’t spends too much - plain and simple. Each year it spends more than it extorts from We The People.
  •   The accumulated federal debt is near $ 20,000,000,000,000!
  •   The FY17 deficit is $ 693,000,000,000, per the CBO
  •   A flood of debt (left)

My plan is simple in concept… but, exceedingly difficult. It requires real change in federal spending and a new national philosophy.

When our federal debt is reduced, it will be time to discuss tax reductions. IMHO, we can begin discussing tax reductions when the massive federal debt is less than $ 10,000,000,000,000, about half of the current federal debt. We will then continue to pay-off the federal debt in-full.

Under no circumstances can federal taxes be increased. Let Congressmen be warned. Increased taxes will result in a ticket home.

 

Tax Cuts?

Tax cuts, by definition, reduce tax receipts. If there is a deficit, that deficit is increased.

Conversely, if you spend less, less taxes are required. This is the only situation where a tax cut makes sense.

Using the data bulleted below, the only way to increase federal receipts with a tax cut is to reduce individual income taxes. This works if the full individual tax “savings” is spent with a corporation – 13¢ lost taxes “generates” 21¢ taxes. This small increment will likely be consumed by incremental unit costs of the corporation.

In rough terms, income taxes fall far short of the requested budget. $ 1.8 Trillion receipts is far short of $ 4.0 Trillion estimated outlays. It is impossible to raise additional receipts with a tax cut.

From another angle, if you cut corporate income taxes by 50% (similar to what Mr Trump is proposing [Sep 2017]), the business would have to double its profits to produce the same tax receipts. This is clearly impossible. Using the data above, tax receipts would be reduced. And the deficit increased.

Revenue Neutral?

Revenue neutral means somebody else pays the tax. Who gets the reduction? and who get a larger burden? Those who make the rules decide. Absolutely NO.

With the same receipts, the issue of deficit and massive debt continue out-of-control.

NO! A huge waste of energy and time.

 

A Sad Reality

With gov’t there will be taxes.

Gov’t, of itself, produces nothing. It only consumes; it has a voracious appetite!

For gov’t to “act” it needs funding. The more it does… the greater the need for funding. A federal gov’t intent on overseeing/nudging everything, is exceedingly expensive. And BIG gov’t, when “making decisions", erodes Liberty!

 

A Better Model

Civic and societal action should take place locally, where the need is. If a neighbor can assist a neighbor, there is no need to involve an HOA, a city council, a county official, etc… Local Control.

In this model, most situations are solved by THE PEOPLE, and sometimes by a community or county. In rare instances, each sovereign state becomes the final authority in civic and social issues. Neighboring or friendly communities can observe successful outcomes and adopt that strategy. Not all communities will pick the same strategy. Metroplex suburbs and Dallas have different goals and different challenges. More so, Texans and Californians see the world differently... It’s okay.

Decisions and funding will be at-worse, at a state level – but, still closer to The People. Local decisions will fit the needs of The People better than via a distant, ideological, one-size-fits-all, federal “solution”. A federal gov’t doing less will require less funds… considerably less taxes levied/extorted.

This is part of a return to US Federalism.

With strong sovereign states, We The People can engage in state-level governance and make a real impact/difference. Local Control!

 

Repeal Amendment XVI - BIG

Repeal Amendment XVI when the federal debt is reduced to $ 10,000,000,000,000... or less.

Repeal would:

Separate Healthcare from Employment

During WWII the War Labor Board declared fringe benefits (including health insurance) as not taxable. This rash edict from the executive branch tied health insurance to employment - a large factor in our national healthcare crisis. It was hurriedly caused by gov't 70 years ago. The War Labor Board does NOT exist, but we operate using is flawed dictate. It is time to right this wrong.

Re-instituting an income tax on fringe benefits might be a start to address our national healthcare crisis. This is a rare instance where I advocate reintroducing a tax... that is effectively mitigated away2.

A wrinkle - inflated income and the additional tax assessment/burden. Because this was NOT the fault of hardworking citizens, a tax adjustment MUST occur. A lower tax rate, to cancel the tax amount of fringe benefits, should be determined and implemented. [A tax credit is really a subsidy and NOT an acceptable adjustment.]

For example, an annual salary of $60,000 and fringe benefits of $12,000. Reducing the tax rate by approx. 20% would “negate”2 the taxes on fringe benefits. People NOT receiving fringe benefits would get a small “bump” – a lower tax bill due to a lower tax rate.

 

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Life, Liberty, Property!