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Don't miss out on the ultimate thrifting experience at our Pix Exchange parking lot anniversary sale at our Torrance location. Visit pixexchangehhh.org for more details. Today is Thursday, September 28, 2017, and here in the United States of America, President Trump and the Republican Party released, or started the process of releasing some of the information about their goals for tax reform.

Yesterday, they released the document called "A Unified Framework for Fixing Our Broken Tax Code." The idea is, the headline and the slogan is "Tax Reform. More Jobs. Fairer Taxes. Bigger Paychecks." And as I deal with personal finance here on Radical Personal Finance, I feel like I owe it to you to do a bit of analysis on some of these proposals.

I've done a lot of shows on detailed, careful tax planning, and I feel like I owe it to you to give you some commentary and some analysis. And I want to do that. But I can't do that today for two reasons. One, it is far too early to have any clarity on specific proposals.

This, of course, doesn't stop the commentariat from quickly talking about how it's either a great plan or a terrible plan, but it's far too early to have any specific proposals. At this point in the legislative process, things will go into committee, there needs to be debate, all kinds of things.

And so it's just not – there's not enough information where I could properly comment on it with any kind of clarity or accuracy. For two reasons, just simply the subject and the way that this subject is handled utterly depresses me. This morning I worked through and I said, "OK, well, let me go and start reading some of the analysis, some of the news from people that I appreciate and people that are popular in the press." And I find the whole thing utterly depressing.

Now, I promise I'm not going to depress you in this show. I do have a plan. But I just sat here and shook my head and I said, "How can I create anything positive for you? I don't want to depress you and I'm so tired of the political nonsense that – I'm sick and tired of it." But then I think we're probably all in the same place.

It just feels like nobody wants to tell the truth. Nobody wants to have a debate about substance. Nobody wants to debate issues. We all just want to argue. I'm tired of it. So here's what I thought I would do and what I'm going to do. I'm going to ask you some questions and give you an opportunity to think through your personal philosophy.

I've come up with a list of questions that are philosophical questions that I think will be useful to you to just consider your own personal philosophy. Your answers to these questions will largely determine your approach to specific proposals, whatever those specific proposals are that come out in the coming days.

I don't claim that this list is complete but I think these are just some useful philosophical questions that you should ask yourself and you should ask yourself the reasons behind your underlying beliefs. So let's start with this one. Do you believe that a civil government has the right to tax an individual's income?

Do you believe that a civil government has the right, has the moral right to tax an individual's income? If so, why? And if not, why not? What's the fundamental basis of your personal belief? I'm homing in here on income specifically. There are many other kinds of taxes that we could talk about.

But since we're debating income tax, what's the fundamental truth that would give a government the right to tax somebody's income, your income, or to not give them the right? Now I encourage you when thinking about questions like this to apply various diverse examples to think about it. So for example, with income, we're all so used and accustomed to the way that income taxes are handled here in the United States now.

Our tax returns and our quarterly checks if you're in business or the automatic deduction from your paycheck if you're an employee. But take it down to its essence. After all, your income is what you use to pay for the basic truths of your life. So let's pretend that you are living in an agrarian society and you grow a crop of sweet corn.

You sell that sweet corn at the local farmer's market to your neighbors. Well, you go out and with the work of your brow, you plant those plants and you have a harvest and you gather in the harvest. Now let's say that your tax rate is 20%. So then you've gathered in a thousand bushels of corn and now along comes the government agent and says, "You owe us 200 bushels of corn out of your barn and we're going to take the 200 bushels of corn." What gives that government agent the right to make that demand upon your corn?

Or let's say that you've taken your corn and sold it to the neighbors and you've collected a hundred pieces of silver, silver coins from your commerce. And then the government agent comes down, knocks on your door and says, "You have earned a hundred pieces of silver for your corn.

Give me 20 pieces." What gives the civil government the moral right to tax you in that way? Do you believe they have that right? If so, why? And if not, why not? Now here's a corollary question of that. Do you believe that the US civil government has the constitutional right to tax an individual's income?

If so, why? And if not, why not? There's an interesting investigation there for you which you might want to look into. Grab your pocket constitution. More likely look it up on the internet and start reading and find out what the constitutional right is that the US government stands on in order to collect taxes and research some of the history of that question.

Next question. If you believe that a civil government does have the right, the moral right to tax an individual's income, how much of a person's income can they claim? What's the right number of how much a person's income the government can claim and how would you know? How would you know what that right number is?

For example, if they had a thousand bushels of corn that you gathered in from your crop in front of your house or if you had the silver pieces that you – silver coins that you earned from a simpler era, the silver coins that you earned from building tables and chairs and selling them to your neighbors, how many of those bushels of corn does the civil government have the right to?

How many is the right number? Or how many of those pieces of silver coin does the government have the right to? What is the right number and how would you know if that were the right number? How would you know if 20 pieces out of your hundred pieces of silver is the right number or 10 or 15 or 50 or 95 or 100?

How would you know? Next question. Do you believe that everyone should be required to pay income taxes? If so, why? And if not, why not? Again, do you believe that everyone should be required to pay income taxes? If so, why? And if not, why not? Now I'll come out of philosophical question mode for a moment just to add a little bit of personal touch to this.

If you believe that everyone should be required to pay income taxes, do you believe that that requirement should be expressed in the reality that some money comes out of everyone's pockets? This is one of the biggest challenges that we face right now in the US American context. When we come to the question of tax policy and appropriate tax policy, about half the country doesn't pay any income taxes effectively.

And there's a very different way of approaching taxes. Let me describe to you two different scenarios. Many high-income earners, many business owners, every quarter write a substantial check out of their checking account to the US Treasury Department. There are many business owners who, when they prepare their returns at the end of the tax year, write a substantial check to make up for what they didn't pay in their substantial quarterly checks to the US Treasury Department.

On the flip side, there is a substantial percentage of the population that looks forward to the filing of their tax returns because it means that they get money into their checking account to spend. This is a consistent theme for many people. They look forward to filing their income taxes because they get a nice check from the Treasury Department.

If you ask people this question, it's one of my favorite questions, "How much did you pay last year in income taxes?" You'll get very different answers to that question depending on the part of society that you're working in. Some people say, "I wrote a check for $30,000." Some people say, "Oh, I got a check back for $5,000." So do you believe that everyone should be required to pay, actually pay, income taxes?

If so, why? If not, why not? Next question, do you believe that some people should be treated differently than other people and so be ordered to pay a different rate of income tax than others? If so, why? If not, why not? Do you believe that some people should be eligible for special treatment and be treated differently than other people and so be required to pay a different rate of income tax than others?

Here's the corollary question for this. If you believe that some people should be treated differently and be ordered to pay a different rate of income tax than others, how would we determine who should be treated differently and how much of a difference there should be? Who should be taxed at a higher rate and how much of a difference in rate should there be?

How would you know? How would you prove that? Next question, do you believe that government tax policy should be used to incentivize certain behaviors or to disincentivize other behaviors? Do you believe that government tax policy should be used to incentivize certain behaviors or to disincentivize other behaviors? If so, how would we know what behaviors should be incentivized or which ones shouldn't?

How would we know which ones we should encourage? Let me give you an example, the US tax code has certain provisions in it that relate to marriage and children. Depending on how we look at this, we could view these as a penalty, for example, the frequently referred to marriage penalty or we could refer to this as an incentive.

For example, if you have children, you're eligible for a child tax credit. So the idea is this may be an incentive for people to have children. Well, how do we determine if that's what the government should be encouraging or shouldn't be encouraging? I've spent quite a bit of time in my life reading various feminist authors and various LGBT activists.

One oft-repeated theme is that among feminist authors and some LGBT activists that I've read is that marriage is an institution of oppression. Thus, if we encourage marriage, we're encouraging and expanding the immoral, patriarchal society and structure. So we should not be encouraging marriage. Or another expression of this would be children.

Some people believe that children are a positive force for good. Some people believe that children lead to oppression. For example, one of the fundamental legal reasonings behind why the United States of America has laws legalizing the abortion of children is that without a right to abortion, a woman is inferior to a man because she has to carry a baby.

So therefore, if a man doesn't have to carry a baby, then a woman shouldn't have to carry a baby either. So children can lead to oppression. So should government tax policy be used to incentivize marriage children or to disincentivize marriage children? How would we know which behavior should be incentivized and which one shouldn't?

One interesting change as of late is that there is a dramatic – there's a dramatic change happening in some countries regarding tax policy in children. I shared an article on my Twitter feed last week about – I can't remember which Scandinavian country it was but they – this particular country is dying off simply because the birth rate for that particular country is well below the replacement rate.

And so the government has done practically everything they can with tax policy to pay parents to have children, to have substantial parental benefits and to pay for all the expenses of childbirth, et cetera. And yet still, the population is not seemingly reacting to this governmental tax policy and the population of this country, that particular country is headed for continual decline.

This is a major problem because the vast majority of our governments are built upon the principle of our having more and more children. Most of the governmental programs depend on higher future tax revenues that are needed in order to pay off the promises to past generations. It's a classic Ponzi scheme.

Without new children, new taxpayers coming in, then this whole scheme falls apart. It's based upon children. So should government tax policy be used to incentivize certain behaviors and disincentivize others? And if it should, how would we know which behavior should be incentivized and which ones shouldn't? Many examples we could go to.

A common one would be deductions for real estate interest, mortgage interest in the United States of America. Should a government be encouraging home ownership? If so, why? And if not, why not? Next question, do you believe that tax policy should be used to give some people special benefits because of certain behaviors or because of a certain status?

Do you believe that tax policy should be used to give some people special benefits because of certain behaviors or certain status? For example, do you believe that the local city government in your town or the state government should give a company special tax concessions in order for them to choose to move their business into your town?

Say we're not going to charge you taxes or we're going to charge you a lower rate of taxation because you're bringing your business to our town. Whether it's an NFL stadium or a local biotech engineering facility or a local entertainment complex, is it right that certain businesses and certain business owners are given special concessions for them to take certain actions?

Or what about special tax benefits for people in a certain condition? For example, there are certain tax benefits, increased deductions, etc. for blind people or for the elderly under US tax law. Should tax policy be used to give some people who meet certain descriptions special benefits? If so, which people and how would you know?

If not, why not? Here's my last question, many more that you could ask. Do you believe that government and tax revenues for said government, do you believe it's a productive user of the tax money? Is it a good thing to be doing with money, to give money to a government?

Or do you see government as an unproductive user of tax money? If government is a productive user of tax money, then shouldn't we be trying to get as much money into the government control as possible? If it's very productive? Or is government unproductive? And if so, should we be trying to get as little money into the hands of the government as possible?

I hope these are thought-provoking questions. I just wrote them down, many more questions perhaps that you could ask. But I hope you'll consider the answers for these questions. And I hope you'll consider the support that you have for those answers. The answers to your questions will largely determine where you come out on a particular opinion.

Now let me just close today's show with a few thoughts and a few comments, a little bit of commentary on the forthcoming political debate in our country for the coming months. I really don't think it matters much. I really don't. If or when I can get more clarity on what's actually proposed, what actually passes, et cetera, we can talk about that.

But at the end of the day, Gary North convinced me that taxes don't really change all that much. Taxes just basically seem stuck at about 20 percent of GDP in the United States of America. Yeah, there are little changes here and there and whatnot, but it's all noise. And more and more, it seems to me that it's just meaningless noise.

Republicans and the Democrats basically do the same thing. They basically want the same thing and all of the so-called differences between them are silly. For example, the Republicans – evidently from the information that we have right now about the forthcoming Republican framework for tax reform is that instead of having seven different tax brackets, things would be simplified into three tax brackets of 12 percent, 25 percent and 35 percent.

This is not a fundamentally different philosophy from the current system that we live under. For example, nobody is recommending or advocating for any kind of non-progressive tax rate, for a flat tax rate of any kind. Everyone believes evidently – both Republicans and Democrats believe that people who earn a higher income should pay a higher rate of taxes.

So both Republicans and Democrats when asked the question, "Do you believe that some people should be treated differently than others and so be ordered to pay a different rate of income tax than others?" Both Republicans and Democrats would answer, "Yes." Now why they would answer yes, I don't know why.

Maybe they believe differently. I would say it probably just comes down to political expediency. At least for the Republicans, it's probably political expediency. They know they can't get a flat tax through politically speaking or they don't think they can. And so they're having basically a tiny debate about whether there should be seven different rates or three rates.

It's meaningless. It doesn't matter. So don't buy into the hype that any of this stuff is going to really matter. There's no major difference between – at least so far. I need to be careful and not overstate it. But there's nothing dramatically different about what I have read so far versus the way things are.

This is all political posturing and the goal is to get – to use tax policy to gain more votes. So Bastiat called it the politics of plunder. The politics of plunder are alive and well in the United States of America. The question is who's going to be plundered and how can we build that for political gain?

Another example of sameness between – in this political debate, I don't hear anybody talking about the need for a balanced budget. Both Republicans and Democrats seem to believe that it's perfectly fine and perfectly right to dole out lots of benefits without actually paying for them and to use debt to finance the difference.

Now there may be a slight difference in talking about it. But in terms of doing it, nobody seems to want to cut spending. Nobody seems to actually want to rein in government. So everyone has got the best possible solution. We can play around with taxes, which the debate over taxes will please our various constituencies and please our certain people to buy more votes from here or buy more votes from there.

It will make us more popular. But in the meantime, we can just hand out as many government benefits as possible to other parts of our constituencies and then we will buy some more votes from there and who knows? Maybe someday 100 years in the future, the economy will have grown enough that the debt can be handled.

Sale seems rather silly to me. I believe that this practice that we've all and practically every large, least large Western government in the world has latched onto. This practice is fundamentally immoral. You can't continue to say we're going to run up the credit card bills and pass it along to future generations.

It's terrible. It bugs me to no end when people want to go out and talk about cutting taxes and not cutting spending. Frankly, if I had my druthers, I would be happy for people to have a debate about actual tax policy and actual spending policy. But let's actually make the checks real.

Let's actually make the budget balance and say you've got to spend the money. So if you're going to pass a new government program, you've got to actually pay for it. And you find out if your tax constituents actually want to write the checks for it. And if they do, if you've decided that it's all about the votes and the people want to vote for it and they want to vote themselves new government programs, that's fine.

But make sure you actually pay for them, not just sell them and give away money for free while meanwhile no one ever pays the bill. Anyway, finally, remember that taxes, most taxes are largely optional. You can safely ignore most of this debate. It's not going to matter much to you.

When things are decided, then find the rules, read the rules and then change your life however you need to change it in order to minimize your tax burden. Now, you can't get out of all the taxes. Some taxes you can get out of, but you can change your behavior and change from a lot of them.

The people who really get screwed with taxes are those who don't read the rules. So you read the rules and play the game. And then finally, be encouraged with the increase in global competition. One of my favorite things actually about the framework that was released and it's probably a political no-go because everyone's going to play their games.

But one of my favorite things personally is the removal of the deduction for state and local government taxes. That of course penalizes high-tax states, for example, California, New York, Massachusetts, etc., where residents of those states get major deductions for all their state taxes that they pay. But I love that.

If that word actually passed, that would be – that would be great because then it forces reality more and more onto the states and it brings in more and more competition. For the last few years, I see that there's a substantial migration happening across the country. People are moving out of high-tax jurisdictions and moving into lower-tax jurisdictions.

I've promoted here on the show the website Savetaxesbymoving.com. If you go into Savetaxesbymoving and you type in your city and your state where you live and what your filing status is and how old you are and what your annual earnings are and where you'd like to move to, it will calculate for you the change in your taxes.

It's so easy to do. It gives people the value of being able to show it. For example, I just popped in. If I'm 30 years old and I have three dependents, married, filing jointly, three dependents, and I'm earning $150,000 per year and I move from Boston, Massachusetts to Dallas, I would have an annual savings of $6,720 per year.

Well, $6,720 per year amortized – or compounded out over the course of an investing lifetime at a reasonable rate of interest could very easily be in excess of a million dollars extra toward – at 60, 65, 70 years old. So sometimes if the cost of taxes, unless there's an offsetting income benefit, the cost of taxes of living in Boston, Massachusetts versus somewhere else is substantial.

And that's happening nationally with the competition among the states and that's happening internationally. I have to keep a close eye on myself on other international jurisdictions. If I get to the point where my income comes to the point where it's worth it, I very seriously would consider changing where I lived just to avoid the taxation.

I think that's growing more and more. Now it's largely on the periphery. Not a lot of people that really are doing this stuff but you can. So this global competition is forcing more and more – is forcing reality onto some of the politicians and that's a positive trend. So I guess that's what I wanted to share with you.

I hope that these questions are thought-provoking for you. I hope they cause you to assess your personal philosophy, your ideology and think through carefully the why questions. Use it as a chance to consider your own beliefs. Even in some of these questions when I was writing them out, I thought, "You know, I'm not sure my answer to that question.

I know what I think I believe but I can't really defend the why very well. I need to do some homework." I hope that they're thought-provoking for you and you take them and do the homework as well. This show is part of the Radical Life Media network of podcasts and resources.

Find out more at RadicalLifeMedia.com This is the sound of a beach in the Caribbean. Find unspoiled beaches away from the crowds. Experience small ship cruising that's 180 degrees from ordinary. Learn more at WinstarCruises.com (waves crashing)