Why the fair tax?- The Fair Tax(HR 2525) is a national retail sales tax that replaces the gigantic and cumbersome and punitive income tax that started in America as a result of the Federal reserve legislation in 1913. It proposes to be 23% as a tax on RETAIL sales of all goods in America. When you get a paycheck under the present income tax the government demands that you fill out cumbersome and complex forms (in detail) to describe much of your private life( and ALL of your financial life) and do so accurately under the penalty of fines and imprisonment that the IRS would gladly facilitate. That paycheck then becomes a reduced amount based on what size it is or what kind of citizen you are based on other checks or cash you may have earned (tax brackets). The fair tax proposes that you keep the entire check when you earn it and fill out no forms telling the government about your private life. You pay as you buy instead.
What are the advantages of that?
Equal Protection Under The Law– The super wealthy don’t get more votes when they go to the polls because they make more (and have more that needs protecting). Bill Gates doesn’t get five votes verses a millionaire’s three verses your one. That wouldn’t be right. One CIitizen, One Vote. Equal protection under the law. If wealthy citizens are not entitled to more votes because they make more , then why should they be forced to pay more in taxes for the same reason? The first response many give to this question is that they are more ABLE to afford higher rates. That concept was described by Karl Marx in the communist manifesto : “from each according to his ability to each according to his needs”. Under examination , it is not consistent with the simple distilled American constitutional principle :”Equal Protection Under the Law”. Regardless of any wealth envy a citizen may have, no one thinks that the wealthy deserve special privileges in our system of government , and neither should they suffer special burdens not levied on all other citizens.
Reducing the strength of powerful lobbyists– How many times have we heard that the lobbyists in Washington have too much power and command the direction of too much legislation? What if there was one law that could alleviate much of that problem? The fair tax is that law. Look at how many lobbyists are in Washington for the sole purpose of gaining tax exemptions for this or that industry or special interest? With no complex set of income tax exemptions to trudge through and hide in new legislation, an entire branch of the lobby industry …..goes away.
Black Market and foreign contribution-When a tourist comes from Germany or Australia and spends Ten thousand dollars in our economy while seeing our country, none of that money goes toward our social security or Medicare system. When a drug dealer pays for a yacht in cash or buys a home, none of that money is taxed through our income tax system . Many illegal Aliens work for cash and do not report their earnings . What if that didn’t matter? The fair tax alleviates that missing revenue and requires none of the actors to fill out forms. When anyone buys an item on the retail level, the tax is applied by the business selling the item. By placing the collection burden on the business owner (who already has that burden in many states) it eliminates the individual as the declaration instrument for the government. And as the owner of a business will stick around for the next round of customers it is incumbent upon him/her to retain public trust in the community and act within the constructs of the system or risk failing. It is already a part of doing business
Punitive, intrusive, and costly income tax filing- Why should it be the government’s business what property you have( beyond it being the registrar of land purchases and ownership)? Why should you have to risk your fortune and your freedom every time you fill out a (mandatory) form that requires a decade of college courses to understand ? Why then, should you be forced (out of necessity) to pay others , accountants and bookkeepers to do it for you because you have not studied that subject while you were preparing yourself to do something else in life? The fair tax relieves that burden and eliminates that risk for the individual citizen.
Reducing the power of the federal government to sneak in taxes under a complex code-The federal government can adjust and tweak the current income tax system and slip in all kinds of penalties and exemptions. And those who can navigate its complexity are capable of finding just the right exemption rules to reduce their burden and increase their competitive advantage. The fair tax levels the playing field and keeps the congress from making” hidden” adjustments to favor this or that lobby. With the fair tax set at 23% retail sales tax, the ability for congress to adjust that one number is out in the open and they would face a much higher scrutiny by “we the people” every time they even considered tweaking that ONE NUMBER.
Forcing the Government to adjust the budget in the spending column instead of the revenue column– The above example shows that with more scrutiny and less ability to grow the bloated government coffers every time they want to add a new pork bill, the congress would be forced (under the fair tax) to adjust their budget just like average citizens do at home: cut spending.
ThePre-bate equalizes the poverty stricken without eliminating taxes on the bottom tier– Under the proposed fair tax system , the pre-bate is a check written to every household (all of them , regardless of income level) to cover the taxes that will be paid on the basic necessities of life up to the poverty level. This removes the very poor from the taxes that are collected when buying their milk, clothing, paying rent, etc. Right now, under the Income tax almost 40% of our citizens have no tax liability at all. This concept also goes back to : Equal Protection Under the Law.
Tax cheating– While no system eliminates tax cheating altogether (criminals will always find a way), it reduces their chances of succeeding by removing the gigantic and complex tax code now on the books and removes the IRS from the expensive burden of keeping up with the income of each and every citizen in America (and now abroad as the Obama administration puts pressure on foreign banks to disclose information on their customers). There will be some ways to attempt to exempt oneself from the fair tax system , but compared to the cheating in the income tax the difference will be geometrically apparent..
Making America a tax haven– With the manufacturing base moving overseas, America has experienced a loss of industry for a variety of reasons, one of which is the punitive regulations put on manufacturers by our gigantic tax code. Under the fair tax, our country stands to become a tax haven for business around the world . Businesses operating in countries with a VAT (value added tax , that taxes at every level of sale , including wholesale) or an income tax would flock to America to get out from under that burden (just as they have run from America in the past to escape the income tax here).
A winning Mission Statement for a conservative political malaise– The fair tax can become a rallying point for conservatives in America to return our great nation to the constitutional republic proposed by the founders (who forbade the income tax in article 1 section 9 of the original constitution). And it can become an attractive draw for moderates and “middle-of- the –roaders” now disaffected by the Marxist attempts of the extreme Liberal shift in American politics in the past two decades.
No system of taxation is perfect, but when compared to the broken and punitive system we have now, the fair tax stands far and away above , and promises to alleviate a multitude of ills now festering in the swamp that Washington and the federal reserve have created to increase their power and assist their comrades at the expense of their fellow citizens .
Patrick Alan Pittman