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Archive for April 17th, 2011

Nothing can compensate for the misery of having your money seized by the IRS and sent to Washington where it will be squandered by vote-buying politicians.

But if you’re a fan of gallows humor, these jokes that people have sent me over the years may brighten your day.

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A man about to have a heart transplant was offered the choice of either a 26 year-old marathon runners heart or the heart of a 62 year-old IRS agent. He picked the agent’s heart because he said it had never been used.

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A university committee was selecting a new dean. They had narrowed the candidates down to a mathematician, an economist and a tax lawyer.

Each was asked this question during their interview: “How much is two plus two?”

The mathematician answered immediately, “Four.”

The economist thought for several minutes and finally answered, “Four, plus or minus one.”

Finally the tax lawyer stood up, peered around the room and motioned silently for the committee members to gather close to him. In a hushed, conspiratorial tone, he replied, “How much do you want it to be?”

Q: How are an apple and a I.R.S. agent alike?
A: They both look good hanging from a tree.
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Q: What did the terrorist that hijacked a jumbo-jet full of I.R.S. agents do?
A: He threatened to release one every hour if his demands weren’t met.
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Q: What’s the difference between an I.R.S. agent and a mosquito?
A: One is a bloodsucking parasite, the other is an insect.

I want to join a violent, armed group with no regard for the law… but the IRS isn’t hiring.

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A businessman on his deathbed called his friend and said, “Bill, I want you to promise me that when I die you will have my remains cremated.”

“And what,” his friend asked, “Do you want me to do with your ashes?”

The businessman said, “Just put them in an envelope and mail them to the Internal Revenue Service and write on the envelope, “Now you have everything.”

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Late one night a mugger wearing a ski mask jumped into the path of a well-dressed man and stuck a gun in his ribs. “Give me your money,” he demanded.

Indignant, the affluent man replied, “You can’t do this – I’m a US Congressman!”

“In that case,” replied the robber, “Give me MY money!”

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Since it is tax-filing season and we all want to honor our wonderful tax system, let’s go into the archives and show this video from last year about the onerous compliance costs of the internal revenue code.

The mini-documentary explains how needless complexity creates an added burden – sort of like a hidden tax that we pay for the supposed privilege of paying taxes.

Two things from the video are worth highlighting.

First, we should make sure to put most of the blame on Congress. The IRS is in the unenviable position of trying to enforce Byzantine tax laws. Yes, there are examples of grotesque IRS abuse, but even the most angelic group of bureaucrats would have a hard time overseeing 70,000-plus pages of laws and regulations (by contrast, the Hong Kong flat tax, which has been in place for more than 60 years, requires less than 200 pages).

Second, we should remember that compliance costs are just the tip of the iceberg. The video also briefly mentions three other costs.

1. The money we send to Washington, which is a direct cost to our pocketbooks and also an indirect cost since the money often is used to finance counterproductive programs that further damage the economy.

2. The budgetary burden of the IRS, which is a staggering $12.5 billion. This is the money we spend to employ an army of tax bureaucrats that is larger than the CIA and FBI combined.

3. The economic burden of the tax system, which measures the lost economic output from a tax system that penalizes productive behavior.

The way to fix this mess, needless to say, is to junk the entire tax code and start all over.

I’ve been a big proponent of the flat tax, which would mean one low tax rate, no double taxation of savings, and no corrupt loopholes. But I’m also a big fan of national sales tax proposals such as the Fair Tax, assuming we can amend the Constitution so that greedy politicians don’t pull a bait and switch and impose both an income tax and a sales tax.

But the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost impossible to have a bad tax system. But if we continue to move in the direction of becoming a European-style welfare state, it will be impossible to have a good tax system.

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