So it is tax season right? Everyone’s favorite time of year. Naturally I have been thinking a bit about taxes, and taxation as a whole. And I picked up a cop of “The Fair Tax Book: Saying goodbye to the income tax and the IRS†by Neal Boortz and John Linder.
The “Fair Tax†plan is not a new thing to me, I have been intrigued with the idea since I first heard about it in the late 90’s, but it had been a passing interest up until recently this is the first serious attention I have paid to it.
The Fair Tax, at it’s most basic idea, is to do away with the income tax and replace it with a national retail sales tax. Obviously there are some details to it that are a bit more complicated, but not by much, it is a small book and relatively thorough. Personally I am enamored with the idea, and not just because I paid my accountant $225 this year to find out that I owe Uncle Sam another $2000 on top of what Sandy and I have already paid him. I am enamored with the idea on at least 4 fronts:
First, the income tax is ideologically flawed. It is a disincentive to work, success, and savings, and it is easily manipulated (as has been done in my lifetime) to place a disproportionate amount of the tax burden on the poor and middle class – to say nothing of stoke the fires of class warfare.
Second, because the Fair Tax only taxes retail sales of new goods and services – it will encourage the use of, and create a thriving market for used, yet serviceable goods. Something our disposable society is desperately in need of. Admittedly this is an ecological more than an economic one.
Third, it is next to impossible for government to conceal the amount of taxes assessed when the tax is assessed as a sales tax instead of an income tax. When a person pays sales tax – it is very easy for them to tell you not only exactly how much tax they paid in dollars and cents, but they are also easily able to tell you what percentage of the price paid was for tax. This is not at all true when it comes to income tax. Don’t believe me? Ask someone you know, maybe yourself, how much they paid in income tax this year. Ask what percentage of their income is paid in tax. It is a safe bet that they don’t know. Many people think that the government is giving them money – instead of just refunding a portion of what they collected. Do you know how much you paid in tax last year? Do you even know how to figure it out? Would you like to?
Fourth, the Fair tax is entirely voluntary. Don’t want to pay taxes? Want to save for retirement instead? Simple – don’t buy new goods or services. With income tax – you pay the tax up front – no choice.
Seriously however – I recommend this text to ANYONE who can vote and cares about how much money they have in their wallet – to say nothing of those who are concerned for the financial welfare of our nation. It is a short read, and an accessible text, Not at all tedious or boring, despite the subject. Not all people will agree that the fair tax is a wonderful idea, who’s time is neigh (though I would be skeptical of anyone who opposed the idea) but everyone, particularly Americans, should read it.
That means you.
