[Lorien]

seashore-

Currently all monies that we pay to the IRS in the form of income taxes goes directly to the Federal Reserve to pay the INTEREST on the money that the gov borrows from them. That is why we as a nation constantly have an increasing deficit, because we are never paying down the PRINCIPAL on that loan from the Fed, only the interest. Which is why we always need more money and they have to constantly raise taxes. It is also the cause of inflation because the more we borrow, the less the dollar is worth, and the higher the price of goods go, the higher wages go, and so on. It's quite a vicious cycle.

That, however, is not the only problem. Obviously, if we didn't have the fed to borrow from then the money would have to come from somewhere. Which is where a restructuring of taxes and a change in the way Washington and the individual states raise money for certain project.

I have always been a firm believer in getting rid of the income tax completely, and changing over to a flat sales tax in every state. For example, every state across the board would have a sales tax attached to every item or service sold.

Some items like food and clothing would have a very low tax with say 1% going to the state and 1% going to the federal gov.

General goods and services would have a higher tax with say 4% going to the state and another 3% going to the fed.

Luxury items like cars and homes over a certain price, and other items would have a higher tax on them.

This leaves a portion of taxes to the state for them to do with what they want, and a portion for the gov to do what they want. It also doesn't punish people for working hard and making a lot of money since they're not getting taxed on their wages. It does however "punish" them for things that are excessive and not needed.

This would also make it so that there would be no earmarking of federal funds that you and I pay to the government for projects in some other state that we care less about.