Fair Tax
So many people complain about taxes so I thought I'd join in on the fun. My only problem with paying taxes is that so many people, rich, poor, and illegals get away with not paying them. I hate to sound like Huckabee, but the fair tax system sounds like a much better plan. Although the Fair Tax system calls for the IRS to be disbanded I think it should just be significantly reduced to the Fair Tax Collection Agency. The premise of the Fair Tax policy is that we pay a certain percent on all goods and services purchased. If you choose to buy more, than you choose to pay more taxes, and a fancy CPA, tax shelters, and the like won’t get you out of paying. I like the fair tax system for several reasons.
1.) We would significantly reduce the size and scope of government. The IRS would be gutted and those countless hours of our legislative bodies writing and rewriting tax code can be put to more important things. Like Energy Independence, if you haven’t read that post please look in the Slam archives. Think about all of the expenses that we would recoup by cutting the IRS say by 90%? Quick list: salaries, benefits, maintaining their facilities, company cars, expense reports, and AUDITS to name a few.
2.) Illegal immigrants don’t pay taxes because they are scared of being caught. If they want to house, feed, and clothe themselves and their children they will have to buy products and on the spot, pay taxes!
3.) Under the Fair Tax system, experts have the estimated tax rate on all goods and services at 16%; however, this number would continually decrease year to year as the system levels out and people who’ve gotten away with not paying taxes will actually have to pay them.
All systems have their flaws, I just think this system would actually reduce the amount of difficulty in paying taxes and increase revenue to the government all while reducing the amount of tax we pay as individuals.
Let me know what all of you think.
Related Posts: Payroll Tax Holiday
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Clark,
I commend you on taking a stand to clarify our tax code. I don't like having to pay someone to do my taxes just because the code is too complicated for me.
I have one question and one comment regarding your proposal.
As for me having a small business, would I have to pay taxes on goods and services I purchase for my business? This would be a disincentive to expand, whereas now I deduct these expenses from my business income.
My comment is that as I sent in my check to pay for my taxes owed, I thought that the amount was small in comparison to what I received from my country. The actual percentage was really small. I kept more than 80% of what I made. Next year with Obama's tax cut for the middle class, my percentage will drop.
What is everyone protesting about being overtaxed? I gladly sent in my check and felt appreciative to receive so much back from a system that guarantees my personal freedom and a government that has corruption as the exception rather than the rule.
First of all I'd like to thank Tom for allowing me to bring up this topic. Now in response to Ethan's comments.
Ethan,
Below is a hyperlink to a PDF document that discusses the impact of the Fair Tax policy on Small Business. It's informative and well researched. Read it over and let me know your thoughts. I'd really like to hear from someone who owns and operates their own business.
www.fairtax.org/PDF/TheImpactOfTheFairTaxOnSmallBusiness.pdf
Thanks,
Clark
But it's still a tax. A tax is a tax is a tax, no matter what it's called.
I say we scrap the income tax, followed by the IRS. Speaking of the income tax, here's an interesting article about the legality and Constitutionality of the income tax.
And while we're at it, let's hold Congress accountable. We can start by eliminating deficit spending, which would force the government to match its revenues and expenditures. Then we can pay off the national debt, which is $11,183,899,252,728.00 as of 2009 Apr 16.
King Lear's Kent,
Yes it is a tax and I’ll gladly pay an acceptable one for roads, bridges, schools, and our military. Unfortunately taxes are a necessity, but that doesn’t mean that they can’t be more efficient, balanced, and fair. Holding our government accountable for it’s spending is great and the fair tax system allows them to do exactly that; but in a much easier way.
Using the efficiency of the fair tax system would save us money in the long run, increase revenues to the government (which should be used to pay down our debt and move us to energy independence), and this will allow us to actually balance the budget and eventually lower our tax rate even further. The current tax code and system cannot do all of those things no matter how many tax cuts are issued.
To me this system is not about a party, it’s about being more efficient and fair. Why pay more for less, when we can pay less and get much more.
@ Clark: I gather that you are willing to pay the federal government to be horribly inefficient in managing roads, bridges, schools, etc. Why is the public sector required to perform these functions? Why not let the private sector take care of such things?
After all, if we're after greater efficiency, the private sector (with no government intervention or involvement) will always have less overhead and bureaucracy. And speaking of efficiency, would not a one page tax code be simpler than the 132 pages of the Fair Tax Act, which is simpler that the 60,000+ pages of the current federal tax code? Assuming for the moment that the income tax is kept, and that a goal is fairness and efficiency, would not a 1% tax on income for all individuals and corporations be the way to go? (I picked 1% for simplicity)
Like I stated in my previous comment, I think the income tax should be scrapped completely. After all, the first income tax was not levied by the federal government until 1861. Since then, the rate of taxation on income has increased steadily. Personally, I do not like that the federal government decides how much of my income I get to keep, which right now is roughly a third of what I earn before deductions.
Clark,
An interesting idea. The thing I like about it is that it simplifies our tax code and could force people who don't pay taxes to pay them.
I'm a bit concerned that a higher sales tax would foster a bigger black market.
Clark, this is an interesting idea. I have two questions.
One is what about the poor? How will we ensure that they can buy food, clothing, and have decent living conditions if they are paying a tax on every loaf of bread?
The next question is have you ever heard of a tax on any goods or services going DOWN? Forgive me if I don't for a minute buy that the percentage of tax will "continually decrease year to year". Maybe one decrease, down from that ridiculous 16% to erroneously show the intent to decrease it, but usually once the money comes in to the state or feds with this kind of tax, it is NOT given up.
My Hubby, as a small biz owner, would LOVE not paying a couple hundred bucks a month to an accountant to keep his butt out of trouble with armed IRS agents! Being able to keep that money for himself would make life a bit easier, or make it possible to buy new equipment to expand his services, making his biz more recession resistant. Now THAT'S incentive!
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