In the long-run, any plan for limiting the federal government to the enumerated powers of the Constitution must consider the 800-pound gorilla in the room. That is, the Internal Revenue Service (IRS).

Small, but important steps towards liberty are happening in the states right now. But, the federal government has gotten so far beyond the Constitutional design of the founders that it’s going to take significant time, effort and resources to stop it. As the old saying goes, “follow the money.”

The federal reserve gives the establishment pre-inflation cash. From there, the IRS ensures that whatever gets trickled down to the general public – with less purchasing power, of course – is ripe for the taking, going straight back into the federal coffers.

This cycle is what keeps the beast funded, and hungry for expansion.

While efforts to nullify gun control, FDA restrictions on terminally-ill, federal prohibition, and mass spying are all extremely important, eventually this funding-collecting cycle must be broken for liberty to fully advance.

Here’s the rub: There are no solutions to this “problem” which appear to have the potential for the public support needed anytime in the near future.

But in modern times, public opinion can shift quickly, so strategy should be planned in advance.

One such way that the IRS can be effectively neutered is by a number of states passing legislation that blocks their ability to collect.

Called the “Federal Tax Escrow Account” or the “State Authority and Federal Tax Funds Act,” such laws would require that all federal taxes come first to the state’s Department of Revenue, an act of state interposition vis-a-vis the IRS.

A panel of legislators would assay the Constitutional appropriateness of the Federal Budget, and then forward to the federal government a percentage of the federal tax dollars that are delineated as legal and Constitutionally justified. The remainder of those dollars would be assigned to budgetary items that are currently funded through federal allocations and grants or returned to the people. Passage would allow states to hold that money as long as needed as an incentive for the federal government to return to the enumerated boundaries of its power.

Such an effort would be enormous, if not historic. The federal government cannot survive without collecting your money, and with the IRS so dysfunctional that it had to recently admit that it can’t even answer nearly two-thirds of the calls it receives from the public, this kind of action would have the potential of bringing the agency down.

A single-state, though, could never have this effect on its own. But ten states passing this bill in a single year would have such a powerful political impact that it could swing the pendulum in the other direction.

But, since we’re talking strategy here, it’s important to differentiate between what could happen in theory and what’s likely to happen in practice.

Here’s the deal.

In today’s political climate, there isn’t a state in the country where this kind of legislation has even an outside chance of passing. In fact, while a number of states saw such bills introduced in the past, no legislator in the country has done so in over four years. There’s simply no interest in taking this issue on.

But, should the economic situation take a major turn for the worse, it’s within the realm of possibility that a bill like this could gain traction, as long as there was significant public support.

Would the federal government – and its courts – deem such laws constitutional? Absolutely not.

The essential question, of course, will the people and their state governments have enough courage to push forward anyway? Only time will tell.

As James Madison put it, “Nullification is the natural right, which all admit to be a remedy against insupportable oppression.”

Michael Boldin

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