The Fair Tax: The Time is Now - Items to Ponder
In the coming days and weeks the majority of my time will be spent on explaining the FairTax of which I am utmost passionate about. Barak Obama and Hillary (McCain isn't much better for that matter) is right that Washington needs change, but he is wrong about the type of change. We don't need more government intervention in our lives.
Instead we need the single largest shift of power to the people in the history of our great country to save our Republic. This issue is not about being a conservative, liberal, libertarian, Democrat, or Republican. It is about being concerned for the sake of America's future economic and national security. The issue I speak of is the Fair Tax.
Before I start telling you what the Fair Tax is, here are a few things to ponder.
- On March 9th of 2005 David Walker, Comptroller General of the US Government Accountability Office offered testimony to the House Committee on Ways and Means stating that at the rate of current taxation and Congressional discretionary spending, by 2040 the government will no longer be able to pay the interest on the federal debt, meaning our country will be bankrupt and will no longer be able to provide any government services because every cent of tax money will be spent to pay the interest of our national debt.
- Dr. Larry Kotlikoff of the Economics Dept. at Boston University has shown that to fix Social Security and Medicare permanently it will cost us $74,000,000,000,000 by 2030 (that $74 trillion if you don't want to count up the zero's). The current net worth of every household in America is around $45 trillion, so to pay it off the government will have to take every item from your house, cars, CD's, books, savings, investments, absolutely everything and they would still only be able to pay 60% of the debt off. Clearly we don't have the money.
- Democrats and some liberal Republicans preach out against corporations who have record profits and low taxes and insist that corporations should pay higher taxes. Well, who do you think really pays for those taxes and where do the jobs go that the citizens of Ohio made such an issue in their primary this past week? Nobel Prize winning economist Dr. Milton Friedman knows and it has nothing to do with NAFTA (The North American Free Trade Agreement). I'll leave you to ponder that for a few days when I address this question in my series about the Fair Tax.
- The current "heavy progressive or graduated income tax system" takes its founding from none other than Karl Marx, the founder of Communist ideology, as written in the Communist Manifesto. This is the second step of ten to form a Communist state. Wouldn't he be proud?
- Finally, the thoughts of two distinguished men.
- "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves [generous benefits] from the public treasury. From that moment on, the majority always votes for the candidates promising them the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship."
- From Alexander Fraser Tytler's The Decline and Fall of the Athenian Republic.
- "When the people find they can vote themselves money, that will herald the end of the republic" (referring to the United States).
- Benjamin Franklin
- Our current tax system has over 64,000 pages of regulations and statutes that are so complicated your chance of a correct tax submission if you do it on your own is near 0%, your chance of getting an accurate answer from an IRS agent on a tax question is less than 40%, and 2 out of every 3 American will be forced to pay professionals large sums of money to complete their tax submission. To top it off in 2002, the economic impact it cost just to collect taxes for compliance was around $500 billion just to collect $950 billion in federal income taxes. Talk about a highly inefficient process (for every $1.90 collected it cost the US economy $1 in compliance costs).
I have heard all too often, that "It sounds like a great idea, but it won't happen." A majority of colonists in colonial America took this stance during the Revolutionary War (thankfully George Washington and a few righteous men stood up to seemingly insurmountable odds). Change can happen, all it takes are voices to be heard.
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To take action now go to changedc.org or visit fairtax.org to sign a petition that will be presented to our elected officials and political candidates on Tax Day 2008 (April 15th for those of you not in the know). Let your voice be heard. For more information or to see other ways you can join millions of other supporters around the country in spreading the message about the Fair Tax now, visit fairtax.org or pick up one of the two books written by Neal Boortz and Congressman John Linder that are listed in my "Try Reading Something" section.
I've long pondered the "fair tax" and have concluded that there are two major stumbling blocks to such a concept and one major reason I might not support it. Stumbling block 1 is that the puny politicians we elect don't have the political will to make such a change and stumbling block 2 is that it most conservatives I talk to are always concerned that the way it would be implemented by the politicians would be to "phase out" the income tax while phasing in the fair tax, but at the end of the day never fully repealing the income tax. The major reason I have difficulty supporting the fair tax is that millions of Americans across the land work and have jobs only because of the income tax. CPA Accountants to Bookeepers, H&R Block to major Law Firms and of course thousands of Federal employees who work for the IRS would suddenly find themselves unemployed. Ah, but you say, they can move on to other practice areas? Well maybe, but have you ever been long in the company of one of these people? Accounting types and certainly IRS employees, while altogether nice people for the most part, aren't terribly imaginative and many, particularly the gov't employees don't exhibit mental prowess equal to top drawer performance. These people would be lost just like clowns when the circus train leaves the village in the middle of the night without them. Do you like it when you're confronted by the sight of unemployed, lost and suffering circus clowns show up in mass on street corners panhandling in your hometown? No one does, it's scary! Well that's what would happen with millions of accountant types all across the land if the fair tax was put into effect!
Keep writing though and researching. Maybe there's some way we could work these people back into the mainstream of the American economy.
Thank your comments. Addressing your two concerns.
Stumbling block 1: It will take politicians to ultimately make the change but you do have a voice in the system. If you truly believe in the Fair Tax like I do you can conduct letter writing campaigns to your representatives and educate others on the Fair Tax. As more people come on board to the idea it will become politically un-viable not to be a supporter of the Fair Tax. Currently 71 members of the House of Representatives and 5 members of the Senate support the Fair Tax and the number is on the rise.
Stumbling Block 2: With regards to the "phase out". If you read the legislative bill that is presented on FairTax.org you will notice that for the Fair Tax to be implemented the income tax, payroll taxes, and savings and investment taxes (capital gains, alternative minimum,gift, estate, death, etc.) has to be repealed meaning that a "phase out, phase in" period is not possible.
Finally part 3 to your objection. With regards to jobs. The primary jobs of CPA's is to figure out ways to better grow the business and increase profit. When the no longer have to worry about pouring over tax forms and making decisions with regards to taxes they will have more time to figure out ways to increase company growth resulting in increased job growth. The proof is seen as a delegation from the national professional organization of CPA's have come forward to support the Fair Tax.. An executive from H&R Block has come forward to refute a Fair Tax protester that said that H&R Block must hate the Fair Tax. The executive cam back and stated that "Don't say that. We'll make more money that we make from filling out their tax returns. You're about to turn us into a nation of investors, and we have the largest Rolodex in the nation." CPA's by in large are in favor of the Fair Tax because it does not theaten their job. Instead it makes their job more lucrative and increases job growth in the industry by increasing the economic growth of the companies they serve.
As for the IRS, the IRS has not taken a stance on the issues like many politicians and lobbyists. Numerous IRS workers have come forward and have come out heavily in favor of the Fair Tax hoping that the IRS would be abolished because they realize how bad the system is. Aside from the fact that the IRS would be gradually phased out to complete audits on people who and corporations who had avoided paying taxes. Many workers who did lose their job would subsequently be picked up in the private sector as job growth increased to meet a booming economy predicted by economists to be growing at a rate of more than 11% over the current rate of growth in just a decade from now. Employment is predicted to grow at a rate of 3.5% faster in the first year over the current tax system and 9% faster in year 10 alone after the Fair Tax is enacted.
Employment of CPA's and IRS employees will not be a problem after enactment of the Fair Tax. With the rate of job growth in the economy as a whole the job field will be dramatically increased from the rates we have today.
Thank you for your concerns on the Fair Tax.
I will be glad to address any of your questions or concerns about the Fair Tax as it is the best way to increase our economy, save our country from bankruptcy, and help uplift people economically.
Please keep check back periodically as I provide more evidence to the superiority of the Fair Tax above other possible tax collection systems.
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