Posted on 11/19/2005 11:06:05 AM PST by Eaglewatcher
Since 1954, the size of the United States' tax code has increased by almost 500 percent. Tax regulations created by the Internal Revenue Service have increased in volume by 939 percent, and in April 2006, Americans will spend a combined total of 6.5 billion hours, at an estimated cost of close to $500 billion, in order to simply pay for the privilege of footing Washington's bill.
It is time for the FairTax.
Perhaps you have heard of the FairTax by now. It is a comprehensive plan for the dissolution of the IRS that would replace all income taxes with an embedded personal consumption tax. According to the website of Americans for Fair Taxation (www.fairtax.org), the FairTax would abolish "personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment and corporate taxes." In their stead would be a 23 percent national sales tax on all consumption goods: a simple, one-time tax that is collected at the retail level.
However, the FairTax is unlike the current sales taxes that exist in this country. These taxes are imposed on top of embedded income tax and compliance costs. In the FairTax Book, written by libertarian radio personality Neal Boortz and Congressman John Linder, a loaf of bread is used as an example to illustrate these hidden costs. For every loaf of bread, the seed producers pass tax costs onto consumers. The shipping company does too. In fact, processors, bakeries, distributors and grocery stores all pass a portion of their income tax burdens onto consumers, no matter how rich or poor they are. Eliminating these costs initially, by eliminating the income tax altogether, would reduce the market price of all products by an average of 22 percent.
Don't take my word for it, though. Take the word of the Harvard Economics Department.
So when these costs are abolished, the FairTax is added and returns the prices of consumption goods to - you guessed it - exactly where they are today. The difference is, of course, that people who are purchasing these things keep every last penny of their paychecks. For low-income families, this would mean an immediate average increase in pay of 25-30 percent.
If you are trying to think of ways in which to oppose this plan, I need to know one thing: why?
The federal government would still steal - I mean, collect - the same amount of tax revenue as it does today under the FairTax. The FairTax does not cut funding from any cherished socialist programs like welfare or Social Security. It is merely a new way for the federal government to pay for its existence.
But wait, it gets better. The FairTax Act of 2005 (yes, it has already been written and is ready to be passed) also contains mechanisms for a "prebate." Based on government figures, the federal government would calculate the "annual consumption allowance" of a household - that is, the amount of money that household can be expected to spend on the necessities of life for that year - and refunds the money. Every household in America gets a tax refund, every year.
In case you had not noticed, wealthy individuals tend to spend more money than poor individuals on consumption goods; thus, the wealthy would end up paying more in taxes than the poor. Most people seem to like this idea.
Finally, the economic impact would be astounding. Driven by the "increasing burden of taxation and Social Security payments, combined with rising state regulatory activities and labor market restrictions," American businesses have been seeking out "tax havens" in other countries with much friendlier tax structures. The media buzzword for this phenomenon is "outsourcing," and believe it or not, our government has been causing it all along.
Passing the FairTax Act would make the United States the "only nation in the world whose companies could sell into a global economy with no tax component in the price system." Companies would rush to bring jobs back to the United States, and their American workers would keep all of the money they earn.
The FairTax is a typical libertarian solution to a greater social problem. Instead of promising more regulations, like many Republicrats typically do, we reduce them. It is a novel concept, I know. The results would be revolutionary.
The FairTax is not a panacea. It does not lower taxes, and it does nothing to curb the spending orgy the Republicrats have been having in Washington. It does not stop pork barrel spending, nor does it re-evaluate how federal money is spent. The responsibility for affecting change in those areas falls squarely on us, as voters.
However, the FairTax would be an enormous stake in the heart of the monstrosity that is the IRS. The thought is enough to make any libertarian smile happily and sleep better at night.
We need the FairTax now.
Scott Wagner is the president of the College Libertarians Club. He writes political satire for the Web site The Enduring Vision and thinks you should go read it. He can be contacted at swagner1@nd.edu
The views expressed in this column are those of the author and not necessarily those of The Observer.
Tax reform/fairtax PING
Long overdue.
DeathoCrats need the tax code the way it is so they can demonize Republicans about tax cuts for the rich, rich not paying their fair share, etc.
The Republicans need the tax code the way it is so they can campaign on promises of tax cuts.
I do not see any way that the current crop of congressional politicians will do anything to take away or eliminate such huge campaign issues. In other words, it is much more important to the Republicrats to keep these campaign issues then to do what is right and make things much easier on the peeples.
Hip hip Hooray!!! Hip Hip Hooray!! Of course do I believe it will happen? Sure, right after they abolish the Department of Education.
Interesting note, they are talking more and more often on Foxnews of getting rid of the IRS in a positive way.
It is no longer considered a joke to publically talk about this.
If anyone would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
Abolish the IRS? Wheeee. What a party. Let's wish for the abolition of Liberalism, too! Both institutions are pervasive, counter-productive and suck the life force out of everything good and natural.
Talk of the U.S. pulling out of the UN is far more acceptable in many circles than it used to be as well. Alas, neither will happen anytime soon, imo.
I'd prefer a flat tax at a fair (5%) rate than the fair tax, but either would be fine with me. I'd be ecstatic, in fact.
Abolition of the estate "death" tax is long overdue as well.
Ditto. The last thing this nation needs is another regressive tax system. It will only serve to penalize none but the dwindling middle class and creates no incentives save for the creation of a burgeoning black market. And what's worse, when (not if) the tax revenues drop due to the black market, the states and fed will create new hidden taxes (AKA "fees") to recoup their revenue losses.
And when their tax revenue losses become big enough, the "fair tax" (sic) bill permits intrusion into our lives to make sure we're buying merchandise from approved sellers.
Under the misnamed "fair tax," the menacing phrase, "Papers, please" will be replaced by "Receipt, please."
Naturally, the "fair tax" crowd will deny this...and it's understandable since none of them have bothered to read the bill.
Even small changes such as the 1986 elimination of tax breaks for rental properties caused seismic problems in our economy. The only survivable option for changing the tax code is by incremental change. Wholesale changes will only serve to destroy our country in financial bankruptcy. If you want a miltary takeover due to insurrection, revolution and general lawlessness then vote for huge changes in the tax structure.
The great depresion will look like a Sunday Picnic. And we will have a global melt down when the American Economy tanks due to lacks of cash receipts. You can't expect the average joe to send in MORE taxes when they are all looking to send in less. There will be a total breakdown in compliance. Armchair economists will cluck and scowl that "things aren't going the way they should" while the economy tanks, social transfer payments are stopped or dollars are printed like play money to cover the debts that aren't paid for by tax income.
Amen!
Actually, Fairtax/HR-25 has close to 60 Congressmen supporting/co-signing it right now and it is not even put up to a vote yet. There is also a lot of support for it in the Senate and the White House.
Alas, neither will happen anytime soon, imo.
It seems the Republicans has finally had it with the Democrats, so that increases the chances as well.
I'd prefer a flat tax at a fair (5%) rate than the fair tax, but either would be fine with me. I'd be ecstatic, in fact.
Income Tax was original a flat tax. A Flat Tax would keep the IRS in place, where Fairtax would get rid of it.
Abolition of the estate "death" tax is long overdue as well.
Actually the estate tax is being fazed out over the next couple of years, we just need to make that taxcut permanent, which the Republicans have been trying to do for the past two years.
The Income Tax Code/IRS is like a weight nailed to our collective leg, sending us deeper into the water/debt. We either lose the leg, or lose our life/economy through drowning/bankrupcy.
I'm Ok but apparently you are drowning in leg iron bankruptcies. So Don't Take Us Down With You. Please....
First, demonstrate that we can cut spending and live within a budget, then lets take a look at the mechanisms of taxation.
On the money, Prime.
Ultimately, IMHO, the price of abolishing the IRS will only be paid in blood...
The so-called progressive income tax is a Marxist abomination, and a central dogma of Communist ideology.
We could balance the budget (not counting Social Security, government is borrowing around $200 billion a year) on justing getting rid of the IRS. That would save us nearly half a trillion dollars a year right there. Nearly quarter of that trillion ($240 billion) will be saved directly by people in not having to spent time and money complying to a complicated tax code (IRS).
I guess my statement went over your head. In a nutshell, the IRS is driving the country into bankrupcy.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.