Fair Tax Nation

Replace All Federal Taxes on Income with the Fair Tax Act , HR 25

Five Reasons I Don't Support Any Tax On Income

1) They increase the perception government is free to a wider audience.


I remember in 1999, Steve Forbes stated the average family of four wouldn't pay taxes on the first $34,000 under his flat income tax proposal.  Every plan I've seen (I haven't seen details of either Romney's or Ryan's tax plan; only an outline), has a higher initial exempted amount to counter claims they would hurt the poor.  By doing so, they are extending the number of people who believe government is free.  How do we get to smaller government from there?


2) They widen the divide between those with existing assets and those still working.


First, I don't agree with taxation of investments and savings.  We should only tax consumption.  The political problem is that too many Americans consider "money" wealth instead of a medium of exchange to obtain wealth.  You don't eat, sleep, travel, wear or live under money.  While invested or saved, it is being used by others, not those that have accumulated it.  Taxing this stored value decreases money available for loans and investment in private industry.  Some flat tax proposals attempt to do this by exempting savings and investments.  Romney does a half measure by exempting only the first $200,000.  By doing this through an income tax, those with stored value pay no taxes, leaving the entire burden on labor.  Yes I know flat income tax supporters will claim they are taxed indirectly through the business tax, but that assumes the incidence of taxation falls on the investor.  I’ve not seen any consensus on this.  No study has definitively shown where that incidence falls, although I've seen some postulate for the first two years it falls mostly on investors and then is spread to consumers and laborers.  Regardless, they won't need to file personal returns or be subject to the IRS.  Meanwhile, their fellow Americans still in the labor force, whether as a business owner or laborer, are directly subject to both the intimidation and taxation of the IRS.


3) Simplicity is not the goal. 


Where is the consideration of the value of personal liberty?  In chapter two of Dan' Pilla's book "IRS, Taxes and the Beast", he describes the 1984 IRS Strategic Plan, publication 6941, in which they state three future goals; A) a cashless society, B) an electronic filing system and C) a flat tax system.  We're almost there.  That might describe simplicity, but what is simple for us is also simple for those who watch us.  It is a small step from there to even greater simplicity; the IRS calculates the "amount you owe" and simply deducts it from your accounts, files your return and sends it to you for your signature, meanwhile having access and control of every financial decision you've made and possibly will make in the future.  Being required to buy health insurance is small potatoes to the possibilities here. http://www.supremelaw.org/rsrc/irsplans/irs.strategic.plan.1984.pdf


4) To throw one of the flat income tax supporters' consumption tax criticisms right back at them, we might end up with both an income tax and a consumption tax. 


I haven't seen any FIT supporter propose an amendment to make the federal taxation of consumption unconstitutional...have you?  Meanwhile, some of them, such as Bruce Bartlett have proposed adding a VAT to the income tax.  Only consumption tax supporters (FairTax in particular) have proposed and support an amendment to drive a stake through the heart of any attempt to have both.


5) It won't stay flat and is a lobbyist's dream.


Okay, so we still have an income tax (and payroll taxes which they always fail to include in their rates) and still have corporate taxes.  We have wiped the slate clean (well not really since they keep some preferences "they" believe are important).  If I were a lobbyist, I'd be ecstatic.  Every break I've been paid for in the past would now be back on the table.  I have to be paid for some of the same work all over again.  It won't stay flat.  How long did it take for Reagan's two rates to morph into five rates?  We gave up half of the deductions available before Reagan’s reforms and followed that by tripling the pages of code and regulation under the income tax.


I'm really tired of politicians talking freedom, but governing only for their version of personal liberty.  I'm tired of politicians such as Paul Ryan saying the FairTax "isn't politically viable".  To me it's just an excuse similar to the one David Azzerad gave you.  Quit making "political" excuses and educate people.


I'll close with my most personal reason; I cherish liberty.  We need to end the income tax.  There is NO acceptable version of serfdom.  As Frank Chodorov wrote in 1954, it is the "root of all evil".

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