Posted on 08/16/2007 6:10:39 PM PDT by RobFromGa
Fair Tax, Foul Politics
By The Editors
Advocates of a national sales tax to replace the income tax have built an impressive grassroots army. They have given their idea an appealing, if somewhat gimmicky, name: the Fair Tax. And they have managed to get five Republican presidential candidates to suggest that they would sign a sales-tax bill if it reached their desk. Some observers credit the enthusiasm of the Fair Taxers for Gov. Mike Huckabee’s surprisingly strong showing in the Iowa straw poll. Huckabee is the candidate most committed to the Fair Tax.
Former senator Fred Thompson is, however, backing away from the idea. Fair Tax advocates have released a video in which Thompson, asked about the proposal, appears to say he would “absolutely” sign it if elected. On August 10, however, Thompson wrote those advocates a letter that said merely that the Fair Tax was a good starting point in thinking about tax reform. Mitt Romney’s campaign says that the Fair Tax has some attractive elements, but that the candidate would need to see details before making any pledges. Rudolph Giuliani has said that he does not think he would sign any such legislation.
The leading candidates are right to be wary. The tax code needs major reform to become fairer, simpler, and more efficient. The Fair Tax is one instantiation of those goals, but its political impracticality makes it fatally flawed. If conservatives force a choice between a Fair Tax and no tax reform at all, the latter is what they are likely to get.
There is widespread confusion about what the Fair Tax would entail. If you bought $100 of clothing and paid a $30 tax on it, you would probably think you had paid a 30 percent tax. The Fair Taxers say that you paid a 23 percent tax: $30 is 23 percent of the $130 you paid in total. When they say they want a 23 percent tax, that’s what they mean.
Since there would be no more income tax in this system, there would also be no more standard exemption to make sure that the basic necessities of life went untaxed. The Fair Taxers would solve this problem by sending out monthly “prebate” checks to all Americans.
The great, undeniably attractive selling point of the Fair Tax is that it would allow the country to dispense with the IRS. But the sad truth is that if the federal government is going to collect as much money as it currently does—which the Fair Taxers say their system would—its methods of tax collection will inevitably be intrusive. The real difference between the current system and this proposal is that the primary brunt of tax collection will be borne by a smaller group of people: business owners.
Over time, then, enforcement measures could become more draconian than they are today: especially since a massive retail sales tax would create a massive incentive to evade it. That’s why every country that has ever tried to impose retail sales taxes this high has quickly moved to a Value Added Tax levied at every stage of production. Consumers rarely see or keep track of these taxes, and they seem to be fairly easy for governments to raise.
These pitfalls are beside the point, however, since a national sales tax is not going to become law. No presidential candidate could be elected on a sales-tax platform, and no Congress would enact one if he were.
A candidate who ran on the national sales tax would be able to run on nothing else. He would have to spend all of his time defending the idea. Off the top of our heads, we can think of three devastating lines of attack an opponent could use in television ads. One ad could argue that getting rid of the mortgage deduction would send home prices into free fall (something that voters are going to find especially worrisome now). Another could ask why senior citizens, having paid taxes all their lives as they made income, should have to spend their retirements paying taxes on everything they use that money to buy. A third could simply ask voters if they look forward to paying a brand new tax.
There are answers to each attack. But no Republican candidate, especially in the daunting environment of 2008, is going to want to have to make them. Republicans cannot win a national election without the tax issue. If they ran on the national sales tax, Republicans would be taking one of their natural strengths and making it into a liability. Which is why we expect them to say nice things about the Fair Taxers’ passion, and move on.
Everyone should contribute to defense. And maintaining a system of courts and law enforcement.
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Yes! Because they want to. Because they care about this country. Not because they are forced to so that there could be pork in defense bills. There are plenty of congressmen who see the military as a “make work” program.
According to FairTax lore, these people pay 22-23% embedded taxes on every purchase they make at retail right now. It is hidden in the cost of the good or service, but if the shadow people didn't make the purchase the thing wouldn't be made and the tax wouldn't get paid to the FedGov.
The prebate is a monstrosity that will do more to foster government dependence and put people at the beck and call of politicians than anything imagined by Marx. And future pols would tamper with that for class warfare, vote-buying reasons-- you can be sure of that.
Imbedded in the philosophy of the law is the destructive principle, so that once it is in effect the economic and political consequences are inevitable. The principle of the income tax is the denial of private property.
There is nothing in the Sixteenth Amendment, there is nothing in the principle of the income tax, which puts a limit on the amount the State may demand, and hence the implication is clear that the individual's absolute right of private property is denied.
The theory of republican government, that its powers are derived from the will of the people, is no safeguard against this denial of private property.
Assuming that the Sixteenth Amendment at the time of its enactment did express the will of the people, every one of them, the substance and effect of income taxation was to destroy the will of any subsequent generation for modification or revocation.
It is unlike any other law. For the denial of the right of private property is in essence the denial of the right of the individual to himself. He is no longer a free person if he is not free to keep and enjoy the products of his labors. --"
Excerpted from From Solomon’s Yoke to the Income Tax by Frank Chodorov
It is the METHOD of collection that is WRONG WRONG WRONG with and income tax! ANY income tax be it flat, round, or square! If FREEDOM is to be preserved individual taxpayers MUST not have to deal directly with the government in order to pay their taxes! A plain fact that virtually EVERY one of this country's founders understood quite clearly.
How many times must we go over this same ground?
Soem things should be mandatory in my opinion and national defense is one of those things. We all benefit (you can’t protect half the people like a volunteer fire department can) from this. The same goes for law enforcement and the courts. But this would be a minimal cost per family to accomplish these tasks. Probably 5% of GDP or less.
3.) It does greatly increase the base by including those within the shadow culture who currently pay no taxes. That does vastly change the amount of tax paid by groups of currently shirking taxpayers.
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People will get the prebate and pay for everything in cash and avoid the tax. They already avoid the state sales tax this way.
Putting the FREEDOM lipstick on the FairTax pig doesn’t make it more attractive, nor does it correct the double-counting or the inherent flaws in the math and the psychology of human behavior that are riddled throughout the bill.
The government then manipulates that will in order to destroy the freedom of our electoral system through the income tax structure, and we call the resulting slavery a free system.
In point of fact, it is not as the founders understood, and the only way to restore real freedom is to give people back control over the income that they earn so that they won‘t, at the voting booth and in other phony issues, be subject to that manipulation."
ALAN KEYES IS MAKING SENSE Television Show Monday, Jan. 28, 2002
It’s the Spending, Stupid.
They prescribe their own limit, which cannot be exceeded without defeating the end proposed - that is, an extension of the revenue.
When applied to this object, the saying is as just as it is witty that, "in political arithmetic, two and two do not always make four."
If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds.
This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.
Federalist #21
right, but at least the fairtax is more fair and won’t lead to any IRS confiscatory enforcements. And people can modify the tax they pay by what they decide to spend. We did without an income tax up until 1913 and the founders of our country never put an income tax in law for very good reason. It is outrageuos...the colonists were up in arms over much less taxation.
we all benefit but we also all lose when they screw up. Why did the govt wait so long for the surge? I care about the military, I honor their courage but let’s face it. It is still government and therefore just as efficient as other govt institutions such as the post office and the dept of motor vehicles.
If you know you’re getting the money you want no matter what, you’re just not going to use it as effectively as when you have to earn it.
It is the METHOD of collection that matters in a FREE society!
I disagree, I think it is easier to know what you are paying now than with thousands of smaller bites throughout the year, plus other bites that are funneled through state and local governments and are never clearly labelled as such.
The rhetoric doesn’t change the facts that the FairTax is all screwed up. And won’t work as advertised.
--William O. Douglas
but did we have a prebate and a sales tax?
we had tariffs, poll tax, property tax and some excise taxes including alcohol “to restrain persons in low circumstances from an immoderate use thereof.”
- T. Coleman Andrews, Commissioner of IRS, May 25, 1956 in U.S. News & World Report.
Government will never be perfect but in things like war there cannot be perfection no matter who is in charge.
The Iraq rebuilding and elimination of the insurgents would have been over two years ago if our Drive-by Media hadn’t made it clear to the terrorists that if they just could hold on a little longer the DBM would get us to quit, all in the name of making Bush look bad so the liberals could get elected.
And our military is much more efficient than the Post Office or the DMV and it is because of the level of people who are called to serve in a volunteer armed services.
ok, fine...but the excise and other taxes are similar to sales taxes. A tax on earnings was altogether not tolerated and rightly so. That is a tax that a king would levy on his servants.
yes the military is more efficient than the post office but we also spend more money on it than anything else except for entitlements. Congress adds plenty of its own defense pork.
And W Bush needs to be slapped once in a while and not just by the libs. Don’t protect the borders? Well no $ for you.
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