I'm quickly learning the same.
I would still like to find some way of decreasing the size of the leviathon we call government........but that's another subject for another thread.
Maybe not another subject... The progressive income tax we have now is what has allowed politicians to get away with increasing federal spending, and to overstep it's constitutionally limited functions and get into all sorts of things which should be left to the states. Two important issues here:
1 - The progressive nature of the income tax means fewer people feel the pain of taxation. Both the less-progressive quality of the FiarTax and the greater visibility of the cost of governement will tend to make increasing federal spending less popular, and cutting federal spending more popular. I assume you understand this concept very well having been a supporter of the Flat Tax.
2 - The direct taxation has allowed the federal government to bypass the states and go directly to the people's wallets, then offer back that money to the states on the condition that the states do things the way DC wants them done. The FairTax does not eliminate this dynamic, but does alter it the direction of taking power out of DC and putting it in the hands of the people and the states.
I would still like to find some way of decreasing the size of the leviathon we call government........but that's another subject for another thread.
Well, now that you mention it. Consider:
23%........... Effective total federal tax rate with respect to gross expenditure for consumption:
15% ..... rate if Social Security and Medicare were eliminated
14% .......... rate if Nat'l Endowment for the Arts were eliminated
12%........ rate if Dept. of Education were eliminated
10%.......... rate if welfare & foreign aid were eliminated
etc.
So lets look at what the maximum it would take to fund those functions clearly authorized under Article I Section 8 of the Constitution, in current dollars:
http://w3.access.gpo.gov/usbudget/fy2001/guide02.html#Spending
- $334 Billion --- Defense & Military related expenditure
- $ 31 Billion ---- Administration of Justice
- $ 16 Billion ---- General Government
- $199 Billion ---- Interest on the Debt
=========================
$580 Billion ---- Total
Institute an across the board, Flat rate, single stage National Retail Sales Tax, which taxes all imports and domestic products with the same rate.
Replacing all current federal tax law with a retail sales tax would be 23% on new goods and services paid and receipted at the retail register. No hidden tax, no exceptions, exemptions everyone participates.
Such a tax acts in a natural manner to encourage the elimination of excess government functions through visibility of burden among all constituencies of the electorate.
The total federal government budget would move from $2,000 billions towards something less than $580 billions calculated.
The across the board federal tax rate on new goods and services would decline towards less than 6.7%.
As tax rate on sales decreases the economic burden on retail items, the sales volumes and growth in the economy would be tremendous allowing even further reductions in tax rates below that less than 6.7% theoretic level.
That is what I perceive as the ultimate achievements possible under a National Retail Sales Tax structured in the manner of the revenue bill H.R.25. Simple common sense applied to the principal of TANSTAAFEL,( no free lunch, everyone participates in paying their way in proportion to the benefit the extract from their consumption.) encourages the natural change in attitudes required of the electorate as regards the burden of government largess in their lives.
- It is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income
Hmmmmmm....... It's do able, with time and effort, once the blinders are removed from the electorate.
Actually, reducing the size and scope of government will flow from making the cost of government more visible. Right now, many people do not pay an income tax and as a result to not understand that they are paying indirectly thru the costs that are imbedded into the price of all goods.
Until people realize that there is no free lunch, they don't care how much lunch really costs. Once they do, there will be downward pressure on the rates. Congresscritters who promise to provide all manner of goodies at the expense of the other guy will not be greeted as warmly because the cost of these goodies will be directly reflected in the purchase of all taxable goods and services.