No Tax On Tips

The debate over taxing (or not taxing) tips is the wrong discussion. The discussion we should be having is why We The People continue to allow the political class to exercise any taxing power at all.

A couple of months ago, Donald Trump proposed eliminating taxes on tips.

What began as an informal suggestion quickly gained traction, as “No Tax on Tips” signs began appearing everywhere.

Kamala Harris seized on this issue, promoting it as her own idea, despite her role in casting the tie-breaking vote in the Senate to pass the Inflation Reduction Act, which expanded the budget and power of the IRS to target tips, among other revenue sources.

Does Ms. Harris recognize this contradiction? I doubt it. She is so dull-witted, probably not.

Regardless, the debate over taxing (or not taxing) tips is the wrong discussion, and not for the reasons many economists argue.

The discussion we should be having is why We The People continue to allow the political class to exercise any taxing power over us at all.

Track Record Of No Restraint

Political elites, at all levels of government, have repeatedly demonstrated a total lack of restraint when it comes to taxing Americans and spending their money. Worse still, many politicians actively seek excuses to tax and spend more of your hard-earned money.

This is not merely a partisan or party-based problem. While it might be tempting to say that Democrats spend like drunken sailors, that would be unfair to drunken sailors, who at least run out of money at some point and stop spending. Democrats don’t.

During his two terms, Democrat President Barack Obama set historic records in spending other people’s money and adding trillions to the national debt. Republican Donald Trump, in just one Presidential term, tried hard to top that record.

Trump has shown no interest in cutting government spending or reforming the biggest entitlement programs—Social Security, Medicare, and Medicaid—all of which were established when there were significantly more working Americans than those dependent on government assistance. That is no longer the case. Our entitlement programs are heading for insolvency.

When it comes to fiscal restraint, Americans are fools to look to either of the major political parties. For most politicians, it’s just too tempting to take and spend other people’s money for one’s own political advantage.

Never Enough

Most Americans are aware of the financial disaster at the federal level. We now have a national debt of over $35 trillion, far exceeding the entire U.S. economy.

This national debt is many times greater than the total amount the United States has spent on all military conflicts from the American Revolution through our recent debacles in the War on Terror, including the Civil War, the two World Wars, Korea, and Vietnam.

The debt does not even include future unfunded liabilities, including millions of bureaucrats who expect to retire with cozy pensions and benefits.

At state and local levels, the political class also spends relentlessly and always desires to spend more of your money. Here in Colorado, political elites are particularly sneaky: They now label new government revenue measures as “fees” to circumvent our Taxpayers Bill of Rights, which limits tax increases.

They may think we've been fooled, but we haven’t. A fee is a tax by another name.

Even in relatively sane, small towns—where the effects of progressivism are mitigated—where residents know that guns keep families safe, that human males are not women, and electric cars may be worse for the environment than gas-powered vehicles—political elites still exercise little restraint concerning taxation and spending.

A frequent trick is when the political class presents bonds for a vote, which are not really bonds at all. Rather than being voluntary investments, local bonds passed with political backing are effectively tax increases—usually on property and sometimes in the form of sales taxes.

You may not even know you’ve bought into a “bond” until your next property tax assessment arrives in the mail.

Greediest Of The Greedy

Hands down, political elites are the greediest of the greedy. Unlike ordinary greedy individuals, who simply wish to keep what is theirs, political elites want to take what is yours and use it for their benefit.

Members of the political class tax others and spend their money—primarily to ensure their own re-election time and again—and yet it is never enough for them. They consistently demand more, and they call you greedy, selfish, or even racist, if you disagree with them.

Enough!

The Federalist Papers argued that government should have the power to tax without clear or principled limits (No. 30). It is debatable whether that argument was right in 1787. It is definitely wrong today.

None of the authors of The Federalist contemplated a future where our constitutional republic would devolve into an unconstitutional progressive administrative state that many postmodern Americans confuse for Santa Claus.

We’re not going to persuade the political class to spend less of our money, at least, not without a credible threat of revolution. However, we can cut off their revenue streams and make it difficult for them to take our money before they spend it.

Cut Off The Sources

It's time to seriously consider repealing the 16th Amendment and abolishing the federal income tax. Remember, there was government and government spending before income taxes.

We shouldn’t limit our discussions merely to income taxes. We ought to consider eliminating payroll taxes, corporate taxes, estate taxes, sales taxes, property taxes, business licensing taxes, and others.

Charitable organizations in the U.S. raise billions in donations each year, all while Americans are taxed at every turn. Imagine how much more Americans would contribute voluntarily if they could keep what they earn and produce.

Let those in government operate like charitable organizations. If they have a program or proposal they believe is good and worthwhile, they should market it and ask others for voluntary funding.

Voluntary Funding Is Good

Whether it’s a local school, bike lane markings, tree-planting initiatives in politically-preferred neighborhoods, virus research in Chinese labs, or the United States Navy, you should be free to send your own money to the government programs you value—in the amounts that reflect how much you value each—and not send money to programs you don’t value.

Imagine the results: The arrogance among the political class would vanish instantly. They would no longer behave like entitled brats who assume they can take and spend others' money at as they please. Instead, they would learn to appreciate those who voluntarily contribute to the programs they propose.

Donors, in turn, would likely scrutinize how their money is spent more rigorously. If someone gave money to fund the military and learns that hundreds of thousands of dollars were diverted and laundered through foreign state-controlled companies and into Hunter Biden’s bank account, many would stop giving and demand answers, accountability, and justice.

Those in government would need to provide clear explanations for how they spent the precious dollars given to them voluntarily by fellow citizens.

Is this a pipe dream? Perhaps. Probably. Still, it is the conversation We The People should be having, in every state and across our United States. This question—why we continue to allow the political class to exercise any taxing power over us whatsoever—is one of the most important questions we can discuss right now.

We will never regain a semblance of a self-governing republic unless those in government believe they might lose their monopoly to legally steal from others and use the booty to enrich themselves and maintain their elite positions of power for life.