Nobody likes paying taxes, however they are essential to government functions. At the state level they pay for roads, utilities, police, fire protection, etc. At the federal level, they help pay for national defense and regulation of commerce. However taxes also pay for things the state and federal governments have no Constitutional obligation to pay for such as "pork barrel" projects and unearned entitlements. The founding Fathers knew well that the economic power to tax involve the power to both build and destroy a free people. Today we seem to have forgotten that which our founders intended when it comes to TAXES.

Our families: The infamous Marriage Penalty Tax, which taxes married couples in a higher bracket than two singles of comparable income, is a perfect example. To pay the taxes and maintain their standard of living, both husband and wife are forced into the corporate workforce. They are forced to work more for less -- less net income, and less time nurturing their families.

Our children: Even with tax credits per child, which are much appreciated, tax credits always come after the fact. This means the government earns interest on withheld tax revenues rather than a child's parents -- interest income that may have otherwise helped fund a college education.

Our livelihoods: Taxes on businesses reduce the amount of available capital for businesses to expand and in turn reduces available jobs in the workplace, and stifles economic productivity.

Our standards of living: The average person pays half of their earnings in taxes -- income, sales, fuel, capital gains, real property, excise, estate, etc. -- just add them up. This leaves little or nothing left to invest for college, a new vehicle, home ownership, and retirement, not to mention leisure time.

The Founders also knew that as government increased in size, so too would its need for money. Therefore they favored just enough government to perform essential functions specifically enumerated in the Constitution, with taxation comparable to fund the need. In short, the government was intended to live within its means determined by what its citizens were willing to pay.

But this changed with the Sixteenth Amendment and the New Deal. These were coupled with the very flawed Keynesian socialist economic philosophy that government was responsible for generating wealth. (The Keynesian flaw: Government taxes wealth. It never generates wealth.) Together these measures fueled numerous government programs funded against the national debt. To pay for these expenditures, new taxes were implemented, the most notorious being a progressive income tax. The results are most predictable, a socialist welfare state where economic success, productivity and investment is punished with higher taxation, and economic failure is rewarded with forced charity.

What is popularly called "Reaganomics" or "Supply Side Economics" can be reduced to the simple math of taxation, incentive and investment. To understand the math, let's start at the extremes and work our way to the center. Ultimately, the taxation graph will look like a Supply and Demand Curve. There are two conditions when the government of a free society will collect zero tax revenue:

Zero taxation. Unacceptable, since money is needed for roads, defense, schoolteachers, etc.

Total taxation. Also unacceptable, since it would make everyone a government employee (Yipe!) It would also be unconstitutional. We all saw what a miserable failure total taxation was when the Soviet Union collapsed in the span of a human lifetime. Presently, the U.S.A. is halfway towards this condition, and will approach it faster with each new tax increase.

The happy medium occurs when a free people is sufficiently motivated in their "pursuit of happiness", while not being resource-burdened by government in that pursuit. This makes perfect sense; most people are motivated to succeed, to build their idea of the American Dream through honest labor.

Now a math question: Which will earn the government more tax revenue -- taxing a person who earns $80,000 at 20%, or taxing a person who earns $40,000 at 35%? DO THE MATH. You will find that even at a lower rate, the person who makes $80,000 will pay $2,000 more in taxes than the reluctantly charitable soul who earned $40,000.

Now let's assume the $40K taxpayer had his tax rate reduced to 20%. What will that taxpayer do with the 15% difference, which amounts to $6,000? Most taxpayers will invest it in stock or mutual funds that pay 20%-30% annual return (Assuming 25%, add $1,500 to this person's income.) Their small business (base income increases proportional to the increase in productivity -- in a good year, 50% or higher. (Assuming 75%, add $30K to this person's income.) Paying down a mortgage or other debt early. Income increases by the amount of interest avoided. For a 5-yr old mortgage, this is roughly 80% of the advanced payments. (Assuming the average house payment is $1,000 per month, add $4,800 to this person's income.) When the dust settles by the end of next year, the $40K taxpayer has become nearly as wealthy as the $80K taxpayer, only now this person is keeping 80% of $76K instead of 65% of $40K. And the government shares in his success with more revenue at a lower tax rate.

This is precisely what happened when Reagan and Congress implemented a new, lower taxation policy. People paid MORE in taxes, but also KEPT more of what they worked for, so they didn't mind paying so much. Money was left in the free market where it could reap the biggest return. Consequently, the economy started growing again when the government decided to stop stealing everyone's money. Those in the finance professions call this COMPOUNDING.

CFMC understands a sound tax policy for a free society can only be based on ensuring government institutions to be fiscally accountable in their stewardship. In addition CFMC encourages the following when writing your legislators and executives:

Always tell legislators to seek efficiencies before increasing spending. Only the essentials are for government functions should be required. You would be amazed at how much taxpayer money government wastes on useless programs and wasteful procedures.

Always request a tax cut before a tax credit. Tax credits are nice, but you always see them after April 15 on money you earned the previous year. That's over a year's worth of interest going into the government's pocket, not yours. Tax credits only give the government an interest free loan. By contrast, tax cuts get government out of your wallet up front, so you can do with your money as you see fit before inflation further saps your money's worth.

Always request a smaller, simpler tax code. Lawmakers enjoy playing with the tax code because the more convoluted it is, the more loopholes can be found to satisfy their special interests. Exploiting the loopholes is one of the biggest yet least productive industries in existence. A simpler tax code would mean fewer litigation expenses, and fewer government resources wasted processing them. It would also mean less paperwork for the average taxpayer.

Always encourage the moral position. Many government policies use tax revenues to fund abortions, drug needle programs and offensive things such as excrement in a jar touted as art and paid for by the National Endowment for the Arts with your tax dollar. Tax revenues given to the International Monetary Fund and promptly given to countries that routinely default on IMF loans. Public funding for "AIDS Research" when actually its used to fund the Homosexual Lobby, even after its pointed out by mainstream medicine that by stopping promiscuous and homosexual behaviors AIDS transmission would be significantly reduce, if not stop.

Always request fewer big government programs, pushing as much government activity to the local level as possible. The reasons for this are simple. Local officials are much more accessible and responsive to their constituents. As such, they are much less likely to desire a tax increase without their neighbors' full support. Further, fewer levels of taxation reduces government administrative costs, which in turn motivates lower taxes.