Thursday, February 5, 2009

Harry Reid and the Voluntary Income Tax



I received an email from a friend denigrating Harry Reid for not answering the question. When I watched this video, I discovered that the two men were deliberately talking past each other and each was correct in what he said. Harry Reid repeatedly agreed with Jan Helfeld that a taxpayer must pay taxes or face civil and criminal penalties, although, as Reid pointed out, criminal penalties are very rare. Tax evasion penalties are usually civil, fines or liens. Helfeld focused on the coercive nature of the income tax while Reid focused on the voluntary aspect of the tax system.

We are allowed to do everything within legal means to minimize our taxes. We are not forced to pay the maximum owed, hence the voluntary nature of our income tax. Reid was correct that many countries designate the tax to be paid and there is no way to change that amount. Helfeld was correct that we must pay whatever tax we owe once we have minimized it.

Of course, Helfeld deliberately chose inflammatory language knowing that Reid would not agree with his terminology. No sensible person thinks that physical force will be used against them if they do not pay their taxes. Helfeld's question conjured up just such an image of physical force.

Reid failed to focus on the inflammatory nature of Helfeld's question. By discussing the voluntary nature of our system, Reid played directly into Helfeld's hands. Reid also did a lousy job of explaining that voluntary nature. He fumbled with the issue and botched his answer. Nevertheless, he is not an idiot as my friend stated, but a lawyer trying to explain a complicated issue in layman's terms and failing miserably.

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