The Fair Tax Plan Is Really Fair

The only thing certain is death and taxes. People have been complaining for a long time about both. In the Bible (Book of I Kings, Chapter 12) the Israelites petition their new king, Rehoboam, the son of Solomon, to cut their income taxes. In the words of the King James Bible, they say:

“Thy father made our yoke grievous: now therefore make thou the grievous service of thy father, and his heavy yoke which he put upon us, lighter, and we will serve thee.”

Politicians being as they are, King Rehoboam talks things over with his administration and three days later he gives them his answer:

“And now whereas my father did lade you with a heavy yoke, I will add to your yoke: my father hath chastised you with whips, but I will chastise you with scorpions.”

So there it is Folks, ask for a tax cut and you get a tax increase—and they throw in some whips and scorpions (can you say IRS audit?) for good measure.

So not much has changed in the past 2500 years when it comes to income taxes. Everyone thinks that their taxes are too high and the next guy making more money should have to “pay his fair share.” The idea of fair taxation has often caused conflict. Remember the Boston Tea Party? Fair or not, the income tax has been a reality for us here in the US since the Civil War when President Lincoln imposed a temporary income tax to fund the war effort.

It took an act of congress in the form of the 16th Amendment to the US Constitution in order to allow the federal government to impose a permanent tax on income. The original income tax code required the filing of only a one page form and the entire tax code was only 14 pages. Individuals with incomes of over $4,000 annually were taxed, and most Americans made much less.

Our income tax was supposed to be temporary. It wasn’t. It was supposed to be fair. It isn’t. In its present form it costs this country, in addition to the actual taxes, additional billions in lost productive time and expenses (lawyers/accountants) just to comply with the record keeping and filing of forms. (Almost) everyone hates it, it dominates local and national elections, but no one ever does anything about it other than deflect the cost from themselves’ and their family/peer group.

Forget about taxing only the rich, about deductions and rebates, earned income credits, and all of that other politically expedient crapolla the dominates the evening news and every political campaign—there is an alternative out there that is actually getting some serious consideration in Congress.

The Fair Tax Plan, also called the National Retail Sales Tax, could be the answer. That is, if the politicians are willing to give up the substantial amount of political influence they currently wield as a result of being able to spend our hard earned money on their political constituents.

Here is how the Fair Tax Plan would work. The federal payroll and income taxes on all personal and corporate income would be eliminated, to be replaced with a 21% to 23% sales tax on all goods and services at a retail level. You would still pay state and local income taxes if you pay them now. Georgia would still demand 6% and Florida would get nothing out of your check.

At first you want to jump out of your seat and yell “A 23% FEDERAL SALES TAX, I CAN’T AFFORD TO EAT!” But wait a minute while I explain the benefits.

The Fair Tax would mean that companies and individuals would pay no income tax on their incoming money. Your paycheck would increase dramatically because you are only having state and local income taxes and things like insurance deducted. Meanwhile, the before-sales-tax cost of goods and services would go down substantially. This is because products produced for sale at a retail level would have no imbedded taxes included in their cost. Things like taxes on the raw materials and the employers so called “contribution” to the FICA/FUTA payroll taxes. Manufacturers are also removed from the task of collecting taxes on their employees’ wages so their administrative overhead cost goes down. Estimates indicate that the cost of a domestically produced consumer item already includes at least 23 cents on every dollar of “imbedded taxes” and tax admin costs.

“So I just break even in the process” I might ask? No, you government schooled bonehead. If I make $75,000 this year, I only pay taxes on what I spend. If I save $10,000, I pay no taxes on that amount. Get it? Also, the government would give everyone a monthly rebate check equal to the sales tax paid on the basic cost of living (food, clothing, and shelter) based on the poverty level rate for each size family. This means that the poor people will not only not pay income tax, they won’t pay anything but state sales tax on their bread, milk, Reeboks, and spinner rims for the Escalade.

The revised tax law would encourage earning, saving, and investing. Of course, if you are a drug dealer or a house painter running a cash-only business and you’ve made all of your money “under the table” for the past 20 years, you will suddenly start having to pay your fair share. The entire underground economy in this country would suddenly be forced to start paying taxes. Experts actually project that the federal revenue stream will go up, allowing services to be maintained while the deficit spending is eliminated. Note that I would still like to see a review of existing services and the reduction or possible removal of the Federal government’s involvement in things like education and the retirement business.

The only losers in the process would be tax lawyers, accountants, and the Internal Revenue Service. They would just have to find something else to do rather than have us support their government mandated non-essential existence. Every one else would be winners.

Imagine if you could wake up on New Year’s Day and know that every day for the next three hundred sixty five days you would not owe the Federal Government one thin dime—unless you bought something new at the retail level.

Who do I call and where do I go to sign up?