*NEWS*
I have had this blog for a whole one and a half weeks now and am already at three hundred unique views. I am already read worldwide and want to keep growing. Please send links to your friends, DIGG me, facebook me, anything to get the word out. The more people this reaches the more people who can comment and create a better site. This site is here for you, and I want you all to be a part of it. This is a map of all the unique locations I have so far been viewed from.
There is also a new poll located on the side of this blog, please respond to it (will be put up soon as blogger lets me)
*ENDING OF THE NEWS*
Have you figured out what the theme that I am circling around is? Only a few more posts and that theme itself becomes the blog entry.
From our countries humble beginnings to the present we have always had thousands of people who have issues with taxes. They have issues with taxes in any forms; from property taxes to income taxes to sales tax. These objectors have usually kept their protests to vocal forms, but have, at times, erupted in violence - for example, the Whiskey Rebellion. Seeing as one of the major events leading up to the Revolutionary War was the Boston Tea Party we have a long history in this country of not liking taxes. But, in reality, taxes are essential for any society to function, as something is needed to protect the persons and the country as a whole. The issue really comes down to arguing how much is too much, and how much is needed. However, when the issue of where the tax comes from is brought up we, as a country, have vastly different angles and views. Most people, however, seem to accept our current system, that is, income tax subsidized by sales tax and the like. There is, however, a very vocal group of people who think that the idea of income tax is wrong (or even unconstitutional), and feel that all taxes should be done via sales tax, a flat one at that: Fair Taxers, What Really Grinds My Gigantic Notched Wheels.
Nobody likes taxes. We all have issues with spending money out of our checks and pocketbooks for seemingly pointless things. Do we all agree with what the taxes are spent on? Of course not. However, most of us agree that roads, fire fighters, police, schools, libraries, the Internet, etc. are worth the money. So when people start trying to change the way that our tax system works you need to start wondering how they are planning on taking care of said issues. It is hard to accept a new system when we are afraid that what we need to be a running functioning society is on the line. When fair taxers supporters start recommending and talking about their great discovery and idea four main things stick out as a sore thumb - They argue that the income tax is unconstitutional - they use faulty math - they do not explain how this tax will handle inflation or how it handles third-party used transfers (basically, the feasibility of it) - they do not address how regressive this tax actually is.
They argue that the income tax is unconstitutional
Most 'fair tax' supporters will start of their argument by saying that our system needs to change. Now, some will (logically) argue that there are inherent flaws with the IRS and income tax, most will simply argue that the income tax is unconstitutional. Now, last time I checked if something is specifically allowed in the Constitution it is Constitutional. Well, apparently the 'fair taxers' and tax evaders have never heard of the 16th Amendment. Now, even if the 16th had never happened income tax would still be Constitutional. Most will say that the decision Bowers V. Kerbaugh-Empire Co. clearly said that the 16th did not give any new taxing powers by quoting this part of the decision:
“It was not the purpose or effect of that amendment to bring any new subject within the taxing power.”
The problem with this is that they clearly ignore the next line which says:
“Congress already had power to tax all incomes.”
If congress already had this power than there is no way to argue that the Income tax is Unconstitutional.
They use faulty math
If you are new to the concept of the 'fair tax' or want to gets a quick refresher and are wondering what the fair tax is here you go. It is a sales tax that would increase all sales to 30% (they claim 23%, but I will show how fuzzy their math is shortly) and eliminate all income tax. Furthermore, it would give a 'prebate’ that is supposed to cover the cost of living for the year (pays you back the sales tax used that year for ‘needed’ things). Now, let us address the issue of faulty math. Those who present the math on the site believe that sales tax is inclusive (they use the logic that it would be the same type as the current income tax system). Sales tax however, is an exclusive tax, so it is calculated after the final cost, not the initial. That said, here is how it is calculated according to the website:
Final product is $130.00
Tax was $30.00
30 is 23% of 130, ergo 23% sales tax
Common logic shows that $30 is 30% of $100, not the 23% that the ‘fair tax’ group says. The fact that they claim one statistic, and then don’t mention to tell you that that claim is false automatically makes me suspicious of the group.
They do not explain how the tax will handle inflation or how it handles third-party used transfers (basically, the feasibility of it)
While we are on the topic of fuzzy math, let us discuss exactly how we can fund the government with the ‘fair tax’. Currently, the Federal Budget is 2.8 trillion dollars. Our countries current GNP is 11059.3 billion dollars. If we use the 30% tax (the real amount they are taxing), we can see that we only get 3317.79 billion, or 3.31779 trillion. For now, that looks like it is the perfect amount needed to fund our current budget, but what happens if either our government spends more (they are increasing on average .2 trillion a year (meaning 4 years until this is not enough money)) or our country spends less as a people. The current proposal leaves no area for adjustment, and, as it is a Constitutional Amendment will not be able to change it before we go into a deeper debt.
One of the main problems with problems with the fair tax is that it is only a tax on taxable stores and new FULLY PRODUCED items. That said, is it not actually easier to circumvent this system than the current one? Sites like Ebay and Amazon and the like will need to be shut down, as they create a system that circumnavigates the governments income. Suddenly, we start buying used items because they are cheaper. Now, even though the GNP stays roughly the same, the government is making less money because there is no more sales tax. Soon, the government will need to crack down on these “black markets”; they will need to shut down drug rings, flea markets, half-priced books, and renegade sub shops. Soon, the government will need to be spending more money (something we already showed they will not have) to make the money. So, they stop the finished products black market, but why would I buy a full product? If labor is not taxed and unfinished products are not taxed why do I not just buy the parts and pay somebody to put it together. This would probably save me compared to the 30% add on. It becomes quite clear that the fair tax has no way to handle this, and our government would get into far more debt than we already have.
They do not address how regressive this tax is
My last issue with the ‘fair tax’ is what it does exactly. If we charge every person 30% on all items the poor will be charged more than the rest. While the supporters claim that the prebates should take care of this, we all know that will not happen. Already the rebates which are supposed to help those below the poverty level do not provide enough for the family, so why would the rebate. Furthermore, because you would need to deal with inflation and different locations, just to figure out who gets how much in a prebate would be a nightmare and cost more than the IRS does now. That said, this tax is clearly regressive. By having the poor pay roughly 30% of their paycheck on this tax while the rich pay 1% shows the clear disregard for the lower classes that this tax has. Clearly, this tax is not designed to help the lower classes, despite that being one of their main claims.
In the end, I feel that the 'fair tax' is nothing more than a cleverly designed ploy, a Trojan Horse if you will, to get those who have money more, and make those who are poor poorer. This is clearly not a fair tax, in any attempt at defining the word, and it is clearly an example of doublespeak which is intended to make others support it without reason. In the end, any group that specifically lies is worthy of intense scrutiny, and under that gaze, the ‘fair tax’ falls short. While the Income Tax is not the best system, until we get another that can replace it and replace it well, we need to work on fixing it up.
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