The good news, he said, is that a number of states have been lowering taxes.
"Major changes in our country start on the state level. We saw it in welfare reform in the early 1980s, when Wisconsin made changes showing you could make changes and not hurt people. By the mid 1990s Bill Clinton signed it into federal law."
Forbes pointed out that Abraham Lincoln's Gettysburg address was all of 272 words. The Declaration of Independence was 1,300 words. The Bible, 773,000 words. The federal income tax code and all the attendant rules and regulations? Nine million words and rising.
"And nobody knows what's in it. The IRS doesn't know what's in it." If you call their hotline, he said, they often give you the wrong answer, and then hold you responsible.
Even a bipartisan tax reform commission appointed by President Obama, he said, determined that if you simplify the tax code you could cut taxes across the board. But just simplifying is not so easy.
"The tax code has been changed 14,000 times since the mid 1980s. Half the lobbying in Washington revolves around the code.
"When you look at an abomination like this, it's clear it is beyond redemption, beyond repair."
3. Government Spending
The third economic headwind, Forbes contended, is government spending.
"Once you realize where real money is created, not by governments, but by you doing transactions with each other, you start to see the folly of those who say more government spending will stimulate the economy. Where do the resources come from? They come from you, or from borrowing or printing money."
Calling regulation another form of taxation, Forbes zeroed in on healthcare as an example.
The reason our country has a healthcare crisis, he contends, is because it's not a free market. The consumers of health care aren't buying from the producers – it's the third-party insurers and the government who are actually setting the price.
"If you go to a doctor or hospital and you ask in advance what it costs, you're going to get a very strange look," Forbes said, "because it means either you're uninsured or you're a lunatic. Yet imagine ordering a bottle of wine at lunch and saying it doesn't matter what it costs, let Blue Cross/Blue Shield take care of it."
Forbes called for allowing more free markets, while keeping in place some sort of safety net for the poor, much like we currently do with food stamps. For instance, he said, you should be allowed to shop nationwide for health insurance, pointing out that he could buy a healthcare policy in neighboring Pennsylvania that costs him half as much as in his home state of New Jersey, but it would be illegal for him to do so.
He pointed to cosmetic surgery, which in most cases is not paid for by insurance. "You scope it out like anything else, you ask friends for advice. In the last 15 years, the demand for cosmetic surgery has gone up six fold, there have been huge advances in technology, and you haven't had the same kind of inflation there you have had in health care. Markets work."