by Jack » Fri 14 Jul 2006, 17:03:41
$this->bbcode_second_pass_quote('Jogger', 'E')veryone,
How much trouble will the IRS have in collecting taxes when the oil supply starts dwindling and the economy is hit hard? Will the tax laws be changed?
I suspect there are two problems here.
First problem: No economic activity (or very little) implies no income - hence, no income tax.
Second problem: Collection tactics will work against those who have something. What do you do with the newly homeless family pushing around a shopping cart filled with used clothes and moldy "food"? Even putting them in a work camp is unlikely to generate a net revenue gain.
Third problem: The present system - and a sales tax system too - depends on voluntary compliance. The occassional scare stories from the IRS are to encourage voluntary compliance.

In a post-peak world, we're likely to see more of the underground economy. Everything will be done for cash or with barter. Granted, we can make 10% of the population an IRS enforcement agent - but how many of them will be corruptable? How many might look the other way for a small "gift"? And how long will they continue to work after the paychecks cease to come?
That's why I suspect an increasing deficit with consequent increases of inflation.