Posted by
Steve on Tuesday, April 15, 2008 2:29:24 PM
Today is Tax Day. It is the day that everyone has to file their taxes. This year there is another reason to file your taxes, you get the stimulus check if you file. If you do not file taxes, you do not get a stimulus check.
Today coming in to work, I listened to the Dennis Prager show. He had Congressman Lindner on about the Fair Tax. The Fair Tax is a consumption tax. It taxes you on what you spend, not what you earn. To help the poor, everyone will get a pre-bate check to cover what a person at the poverty level will pay in consumption taxes during the month. Right now, our tax is based on how much you earn. The more you earn, the more you pay. The Fair Tax would only be implemented if the 16th Amendment to the Constitution is repealed.
The current tax system is set up to encourage people to commit fraud. There is a less than 1% chance that you will get caught, so why not fudge the figures. The latest estimate, according to Congressman Lindner, is that there is $325 Billion in under reported income per year. The government does not estimate how much the underground economy is worth, but outside groups estimate that it is worth about $3 Trillion. That is a lot of money that is not being reported to the system. There is little the government can do to stop the under reporting. Things have gotten tighter in reporting, but there are still holes big enough to drive a Mack Truck through.
The advantage of the Fair Tax is that this underground economy will no longer be an underground economy. Everything they purchase will be part of the Fair Tax as everything is taxed. The underground economy will be a thing of the past. People under reporting income or taking too many deductions will be a thing of the past. That will greatly boost the amount of money going to the government.
Businesses that left the country because of taxes will return. They will not be taxed on their employees or their income. That will encourage any company in the world to come to the US to establish their headquarters or at least build plants. Full employment would be the story. Companies would go on a massive expansion on the amount of building and hiring that they do. Americans would be able to produce goods cheaper than anywhere else in the world.
The only drawback to the Fair Tax is that it would take social engineering out of the hands of Congress. That would mean that they would have less influence on the economy than they currently do with tax issues. They would have fewer people coming to the seat of power seeking some favor for campaign cash. That would mean that Congress would have to work on actual issues instead of tinkering with social problems using the tax code. The current tax code is based on the theories of Karl Marx. Karl Marx is the author of communism. I realize that most Democrats worship at the altar of Karl Marx and communism, but some have actually come out in support of the Fair Tax.
Because the Fair Tax would greatly reduce the power available to Congress and it would have to be approved by Congress, there is little chance of passage. It could happen if enough people pushed it. But without a massive groundswell of support, there is little chance of passage. It makes too much sense. Taxes are supposed to be to raise money to fund the government. The Fair Tax makes taxes do just that. The current tax system is so much more than a system to raise money to fund the government. It is a way to shape society the way that you want it. If you want more of something, just make the tax law such that it is a tax advantage to do something. Shortly after that, there is a lot of money chasing that idea. Even if the idea makes no economic sense, the money goes where the taxes say it will.
I fully support the Fair Tax. Every person that cares about the United States should support the Fair Tax. To find out more, go to fairtax.org. The more you know, the better you can answer the questions people have about the Fair Tax. Many people are afraid of something new. If they investigated the Fair Tax they would be supporters as well. They are probably misinformed by people that know little about the Fair Tax and then write an article about the Fair Tax that is full of mistakes. People use these articles filled with mistakes and try to use them to combat the ideas in the real Fair Tax.