The fairness of a tax code should be judged on the ratio of compliance and enforcement costs to the amount of revunue raised. Unfair taxes, like the income and capital gains taxes, require enormous amounts of information to be collected for compliance and enforcement. This information is essential for politicians and lobbyists who want to use the power of government for personal vendettas or personal enrichment.
Paying for government with an excise tax on demand deposit (M1) account transactions at U.S. financial institutions only takes an account number and transaction amount for compliance and enforcement. For progressivity, those who don't pay income taxes now could legally avoid any tax by using cash or barter.
IIRC, a 3% M1 transaction tax would easily balance the budget while providing a permanent tax cut amounting to hundreds of billions of dollars because virtually all compliance and enforcement costs would be eliminated.
I've used this arguement for tax fairness several times to silence leftists promoting the income and capital gains taxes.
"Paying for government with an excise tax on demand deposit (M1) account transactions at U.S. financial institutions only takes an account number and transaction amount for compliance and enforcement. For progressivity, those who don't pay income taxes now could legally avoid any tax by using cash or barter.
IIRC, a 3% M1 transaction tax would easily balance the budget while providing a permanent tax cut amounting to hundreds of billions of dollars because virtually all compliance and enforcement costs would be eliminated."
-- I've never heard of this plan. Link???
It's not just unfair, it's positively criminal. It's criminal on two fronts. The first is the unfunded mandate to do a considerable amount of work just to comply. Many people hire it done, or pay for computer software to help them do it, because it is completely unreasonable to expect to do your taxes at all well without specific educations.
The second is that you're treated like a criminal if you do everything in your power to file your taxes properly, but make a mistake. You can be audited, fined, even jailed (although I don't believe anyone is jailed for a mistake I could be wrong). You do your best to do your duty and obey the law, and in the back of your mind is the nagging question - did you obey or break the law?
Even if the "Fair Tax" raised less revenue or cost more, it would be worth it to create a tax system that was not so inherently criminal.
Shalom.