It’s time to give the FAIR TAX a fair hearing Nothing in our government is remotely as corrupt as the Income Tax Code.

Home  »  Fair Tax  »  It’s time to give the FAIR TAX a fair hearing
Print This Post Print This Post
Apr 10, 2016 No Comments ›› admin

By Lynn Woolley

Nothing in our government is remotely as corrupt as the Income Tax Code.

Since we created it over one hundred years ago, politicians have used it to sell favors to the rich and powerful. The Code is so complex that even the IRS doesn’t understand it. Mike Huckabee wanted to replace the Tax Code with something called the Fair Tax – a 23 percent national sales tax with a prebate for cost-of-living expenses.

Mike Huckabee on-air. (Photo: New York Daily News)

Mike Huckabee on-air. (Photo: New York Daily News)

But if Congress can’t sell favors, and politicians like President Obama and Lois Lerner can’t use the IRS to punish enemies, then the Status Quo would take a hit. Remember, Hillary Clinton and Bernie Sanders see the IRS as a tool to rake in more taxes. Donald Trump hasn’t said anything about it. Ted Cruz promises to abolish it. If you really want to live in a country where taxes are simple and easy to understand, this should be an issue for you.

Video: Mike Huckabee makes the case for the Fair Tax

Debating the Fair Tax fairly.

There is no perfect tax system. But what we have now is a mess, used by government to control us, and to confiscate our money. No one understands it. It is, in effect, a monster that has spawned a gigantic bureaucracy and a national police force that, someday, may come knocking on your door.

The Fair Tax is simple.

It starts with a 23 percent tax on new goods and services. It is not based on the immoral idea of taxiing what we earn, but the fairer concept of taxing what we consume. It encourages growth, eliminates the need for a tax return, and generally frees the taxpayers from having to log mileage or save receipts. Life under the Fair Tax is much simpler, much fairer and much freer.

Those who promote the Status Quo have a thousand horror stories to tell you about how bad life would be in under the Fair Tax. I have a million horror stories to tell you about how bad life is under the current Income Tax Code.

Huckabee and Cruz are onto something.

It is sad that Huckabee got nowhere with his support of the Fair Tax. He is a rare politician that is willing to return power to the people in that manner. Cruz, while not outright supporting the Fair Tax wants to abolish the IRS. The Fair Tax is easier way.

Video: Sen. Ted Cruz explains to a rally how he would abolish the IRS

Imagine no more Lois Lerners to intimate conservative groups. No more Nixonian enemies lists – because the IRS is the weapon of choice and it would be gone.

At the time I wrote my 2003 book “Clear Moral Objectives,” the annual cost of IRS and tax compliance was $250 billion. It’s much worse now. With the Fair Tax, that money goes back into the economy. Right now, it goes into the pockets of tax lawyers and accountants. But the Status Quo holds a powerful spell over many people.

Video: The IRS as a political weapon – 5/22/13 – Lois Lerner, the Director of the IRS Exempt Organizations division pleaded the Fifth Amendment during testimony before the House Oversight and Government Reform Committee

Arguing the merits of the Fair Tax.

What follows is an email I sent to a friend who believes the Fair Tax would be detrimental to the economy. He believes it would cause a depression. I, on the other hand, believe it would cause the economy to skyrocket. Here is part of the exchange:

I just pulled out the two books I have on the subject and reread parts of them.

One is “The Fair Tax Solution” by Ken Hoagland. The other is “Fair Tax – The Truth” by Neal Boortz and (Congressman) John Linder.

You’re right about the prebate. It’s goes to all as a replacement for the meat-headed tax credits that congressmen buy and sell in the current Tax Code. The current code doles out about $465 billion more, but to selected classes that the government chooses. That’s why the Fair Tax is fair.

The tax is embedded. If you buy a $100 toaster, $23 goes to the government. It’s not $77 + 23%. It’s $23 out of each $100 spent. Note that the current tax code has a similar embedded cost that is not apparent at the cash register. Under the Tax Code about 33 cents comes out of every dollar spent. So the Fair Tax puts more money into people’s hands BEFORE you get to the billions of savings from not having to file returns.

Regarding the studies that show people would stop spending — that’s just silly. Boortz wasn’t able to find these studies and he denies they exist. Even if they do, each paycheck would be considerably larger because there’s no withholding. People would correctly realize that they have a lot more money to spend.

You can stop worrying about the mortgage deduction. First, there is no need for one under the Fair Tax because nobody would be paying income taxes. Second, the Fair Tax would only apply to new homes. 75% or more of home sales are for existing homes. Only those people who itemize get to deduct mortgage interest anyway — so again, the Fair Tax is more fair. Theoretically, home costs might even go down.

Under the idiotic Tax Code, I have to save receipts and plan and wonder if I’ve left money on the table when I file my return. Businesses weigh every decision based on tax avoidance.

Regarding this excerpt from Wikipedia:

As defined in the proposed legislation, the tax rate is 23% for the first year. This percentage is based on the total amount paid including the tax ($23 out of every $100 spent in total). This would be equivalent to a 30% traditional U.S. sales tax($23 on top of every $77 spent—$100 total).

This is a misleading graph or even a lie. The math does not work that way because the Fair Tax is included in the cost; it is NOT an add-on. With an add-on, you multiply the pre-tax cost by the percentage. In an embedded tax, you subtract the percentage form the final cost.

Get your calculator out.

On the $100 toaster: it would cost $77 with no tax. ($77 + $23 tax = $100.) That is a 23% percent tax, not a 30% tax. You go DOWN with the math, not UP.

That is to say: $100 – 23% = $77.

In the advertising business, we constantly explain this to clients.

If I buy a newspaper ad for $500, I add a 15% commission. Here’s how I get there: I add 17.65% to the cost of the ad.

$500 + 17.65% = $588.25. But what I really added was 15%:

$588.25 – 15% = $500.

That is the way it works, and the IRS uses the same type of calculation.

Remember, we dig deep to get at those truths.

I wish you would look at ways to improve the Status Quo rather than constantly defending it. The fact that we have as much tax avoidance as we do indicates a problem with fairness. The Fair Tax is not perfect, but is FAR superior to the unfair, complex, mess we have now that has been caused by a corrupt system. Congress doesn’t want to give up its perks, and so Huckabee — the only well-known politician who seeks reform (other than Cruz) — gets nowhere.

Ted Cruz would likely get no support – but he would try to abolish the IRS.

Obama gave us nationalized healthcare as his big legacy item. He did it without any support from Republicans. What would happen in Cruz was elected and (perhaps) put Huckabee in change of putting together a Fair Tax campaign?

FairTax_Facts_492x277

NO DEMOCRATS WOULD SUPPORT IT. Democrats LOVE the IRS. They like to tax and spend and the IRS is the prefect vehicle. But Republicans like the Code too. They can use it to bring in contributions from their rich supporters kind of like Hillary does.

So it would take a grassroots movement. It can be done. The Democrats got their healthcare bill. If only the Republicans would get behind the Fair Tax. If only.

Meanwhile, as I write this, April 15th is 5 days away. Good luck!

lynn@BeLogical.com

Tagged with: , , , , , , , , , , , ,

Leave a Reply

You must be logged in to post a comment.

%d bloggers like this: