The current tax code is sooooooooo frickin' out of control! This is the CHANGE we need ....and NOW! It just makes sense. I seem to recall just recently reading that the administration is proposing increasing the number of IRS agents by 8,000!! How about we eliminate the entire agency!
If it says simple and sensible, it is neither.
A fair or flat tax won't happen in our lifetime. First, the government prefers a behavorial based system that rewards or punishes certain behavior to influence political, social and economic issues. Second, the lobbyists from H&R Block, Intuit (Turbo Tax), CPA's, Tax Attorney's, and yes even the IRS would descend on Washington like locust. I would love nothing better than to downsize the IRS, and terminate the 100K employees. Don't forget certain current sacrosanct deductions, i.e. mortgage and charity organizations would go ape shit.
I would love nothing better than to burn the years of tax returns and receipts cluttering my closet. Plus I know I could better spend the 40 hours I currently spend on doing my own taxes, like spending it on providers. Just ain't going to happen.
If the mortgage deduction went away, the already fragile housing market would get worse in the short term. I can't imagine Chocolate Jesus going for that.
I love it when people tout the Fair Tax and claim it will eliminate the IRS. Click the link you provided, and read up on "pre-bates".
Your "fair" tax would put half the country on the dole, recieving monthly checks as a "prebate" to cover the portion of your "fair tax" that you can't afford. Its right there in the little bullet point description at the very top of the main page.
Now, how is the gov't going to know who gets a "prebate" each month, and how much they are supposed to get? You STILL have to declare your income. WHO will you be declaring your income to? The IRS of course, or perhaps the same agency with a shiny new name. Either way, it will come down to the same thing. Will it, perhaps, shrink the IRS? Not likely. Now the agency will be cutting checks to millions of people every single month. Not only would a fair tax NOT eliminate the IRS, it would more likely GROW the IRS into an even larger cluster fuck.
Furthermore, the "fair tax" is anything BUT fair. It would shift the tax burden even more disproportionately onto the back of Middle Class Americans. NO thank you.
A far better solution would be to reduce our gov't back to its proper size, eliminate programs and spending that have absolutely nothing to do with the original intent and powers granted to the Federal Gov't, THEN we can slash taxes to pay for the slimmer trimmer gov't.
Everybody has good points, but lets compare "first principles" with "the art of the possible."
Everyone who pays attention knows our income tax has become so complex that 49 of 50 CPAs (in a Money Magazine study) can't even get it right for a regular family. So for all practical purposes, the income tax makes every taxpaying citizen into a felon who has simply not yet been charged. It's a disaster on every level -- moral and philosophical -- and needs to be abolished forthwith.
However, it cannot and will not be abolished outright. Our elected officials are addicted to our wallets; sucking like the vampires that they are. 90%+ of the federal programs funded are unconstitutional in the first place. But those programs buy votes. Every program has its own "constituency" that will mobilize activists.
As the spending will not be controlled, the tax money must still roll in.
The so-called "Fair Tax" offers the most practical hope as it has already been endorsed by 60 legislators. And, yes, it WOULD abolish the IRS because *all* taxpayers would receive the same prebate amount; so there would be no need to account for income.
While I would obviously prefer to see a dramatic reduction in spending and simple abolition of the IRS; that is a political non-starter. The Fair Tax, at least, has *some* traction.
A big benefit of this tax is that you would pay it every time you bought something -- razors, gas, food, a house, or anything else. 22%, right there, right in front of your eyes.
Auto-withholding by employers tends to make taxes invisible as the money is never held in the taxpayer's hand or bank account. The pain of April is often forgotten by November; especially when folks receive a "refund" as though it were found money.
Having people shuck out 22% for the coffee they buy on election morning will make people very conscious of the cost of government; and therefore more prone to want that cost reduced.
Likewise, as it captures consumption rather than production; production and savings are encouraged along with greater self-sufficiency (see the book "Mini Farming for Self Sufficiency). When people are more self-sufficient, they are more free.
Another benefit is that a tax of this nature "captures" black market money whereas an income tax does not. Today, a drug pusher buys his yacht and, depending on the state, may pay almost nothing. Under the Fair Tax, he'd not only pay a whopping 22%, but he might even join forces with people who are productive in the above-ground economy to reduce the size, scope and cost of government.
The number of people out there, today, who seriously entertain the notion of reducing taxes is too small to win a national election. By putting taxes in everybody's face, you build a constituency by making sure people understand where their self-interest lies.
The reality, though, is that most politicians are smart enough to understand that the Fairtax could be a harbinger of the end of their gravy train. So even with existing support, it is unlikely to succeed.
The only solution, and I commend it to the attention of folks who like freedom, is secession.
In the United States, right now, there are nearly three dozen active secessionist organizations working on either state or regional secession because of their (correct) belief that the Federal government is beyond reform. (Do not confuse secessionist groups with separatist groups like the New Black Panther Party or the KKK.)
The Middlebury Institute http://middleburyinstitute.org/ maintains a listing of these secessionist organizations. These organizations have all gotten together three times now for a secessionist conference; most recently at an event held in Manchester, NH.
Just as the Soviet empire broke into its constituent parts; so shall the American Empire. Many, many, analysts believe secession and breakup to be inevitable. The only real question is whether we are going to be ahead of that curve or behind it.
The time to secure your place in history is now!
-- Modified on 5/24/2009 9:11:10 AM