UPDATE: Claire Wolfe reports that current employees will also have to apply for government permission to keep their jobs.
Recently, I wrote about how immigration hysteria being used as an excuse for rise of a US police state.
Here, Mark Yannone documents some of the proposed mechanics of this connection are being put together. Like me, Yannone believes that the Trojan horse of a fraudulent “fair” tax will also be a key building block of this disturbing development. This guy, this guy, or maybe this one could easily be the perfect candidate to put the finishing touches on a domestic system of fascism.
Makes a lot of sense, except for this picture of ol’ Kris Kristofferson. What’s he got to do with it?
Stop the Experiment
by Mark Yannone
Half in jest, I’ve long referred to employment regulation as government’s attempt to make employment illegal. Legislation like the Comprehensive Immigration Reform Act of 2006 makes the federal government’s desire for complete control over our lives more evident than ever.
By ignoring existing immigration law for years, the law enforcement failure—in conjunction with welfare programs and other socialist policies—has helped to produce conditions that make Soviet-style control of its citizens a more palatable “solution” to the government-engineered problems associated with illegal immigration.
Is this draconian legislation the last straw for those who assert their inalienable right to earn a living without government interference? Maybe . . . if it were rigorously enforced. But it could never be fully enforced as long as we have cash. So, once again, Americans will have to surrender more freedom for the sake of the success of a government program. When our money is 100 percent digital, enforcement will be fairly easy, except where barter is used. Barter will include what was previously considered legitimate money: gold and silver coins. Of course, such transactions will have to be outlawed, but they won’t stop. Barterers who are discovered will lose their assets and what remains of their freedom to teach the rest of us that such behavior is ill-advised.
The final step in the system will be the implementation of the world’s most controlling system of taxation, currently referred to as the FairTax, a 30 percent national sales tax that will require everyone to receive a monthly living allowance from the federal government, transferred electronically into their bank accounts (as long as the citizen remains compliant).
The economy in such a government-controlled society cannot thrive. As it deteriorates, law enforcement will grow increasingly difficult and expensive, so the measures used will become extreme. Given the history of mankind, we can expect these enforcement tools to include labor camps and extermination. And if you think that can’t happen in our system of government then you must have missed the National Security and Homeland Security Presidential Directive from the White House.
The world is a living laboratory. The experiments outlined here have already been performed, and the results were all negative. They don’t need to be repeated, and you don’t need to continue to live as a lab rat.
Immigration Bill to Collect American Info
by Elliott West, Editor
Raleigh Chronicle
May 18, 2007WASHINGTON DC – Although a new immigration bill that was passed by the United State Senate last year chiefly addresses illegal immigration, some components of the bill will definitely benefit the Internal Revenue Service and other government agencies by tracking all sources of wages and compensation by American workers, even those who are legally American citizens.
The Immigration Bill Status
The controversial Comprehensive Immigration Reform Act of 2006 was already passed by the Senate in late April of 2006 and another version of the bill could soon be voted on by the full Congress if a deal is reached among legislators.
Senators Ted Kennedy (D-MA) and John McCain (R-AZ) announced on May 17 that a Senate agreement to push the bill again had been reached, after efforts last year failed. Both NC Senator Richard Burr (R) and Elizabeth Dole (R) voted against the much-debated bill last year.
The then-Republican controlled House did not follow up on the Senate version passed last year, since many opposed the illegal immigrant amnesty provisions of the bill. Some political pundits say the immigration reform act will be hard pressed to gain passage in the House again this year despite a change in party control.
It should be noted that if members of the House and Senate modify the bill through a compromise, some text of the final bill passed by both houses may change.
Mandatory Registration
However, as it stands, the bill would make it illegal to hire anyone for any work in the US for paid wages, unless both the worker and employer complete the new registration requirements, including providing the employee’s work history for the past five years even if they are American citizens each time they apply for a job.
“It is unlawful for an employer . . . to hire, or to recruit or refer for a fee, for employment in the United States an individual unless such employer meets the requirements of subsections (c) and (d),” says the bill referring to the new document rules and “electronic verification” systems.
The new $400 million “employment verification” component of the extensive bill would add new electronic registration requirements for all American citizens who do work for compensation and even American employers as well.
As it stands, the new bill would require all employers to “register” with the federal government and report the data for new employees to the government within three days of hiring them.
As such, the bill would fill in one of the last gaps in the government’s tracking of wages, by making it a potential criminal or civil offense not to inform the government that a worker is receiving compensation of some sort, under the rubric of national security.
According to Section 274A of the version of the bill passed by the Senate in 2006, no employer would be exempt from having to register with the government and also having to verify the status of each of their new employees. The new requirements would go into effect 18 months after the electronic verification system has been created.
“The Secretary shall require all employers in the United States to participate in the System,” says the text of the bill.
Collecting Data on US Workers
Although future details may change, even hiring your neighbor’s kid Johnny to mow your lawn could become a long and detailed process, and if you didn’t follow the rules, you could get a knock at your door from Homeland Security.
First, you would have to register as a employer under the program and then call a 1-800 number with several items of information about the potential new employee (even if they have proper ID or an American passport).
Each time an employer hires someone, they would have to phone in (1) their own EIN or social security number if they are an individual, (2) the social security number of the new employee, (3) the state of birth of the new employee, (4) the EIN number or social security number of every single place the new employee has worked in the last five years, (5) and the date of birth and address for the potential new employee.
Then you’ll need to wait up to 10 days to receive an answer about whether or not Johnny is approved for work in the US.
Be sure to save the authorization codes given to you by the government if he is approved and also save all of the paperwork for three years or you could have to pay a large fine.
Even if you hired him for only one day’s worth of work, you’ll need to save his application forms and approval codes for at least one year, says the bill.
And don’t forget, under the new proposals, be prepared to give Johnny your own social security number so that he can use it the next time he applies for a job—he’ll need it under the new law for the next five years each time he applies for a job.
That provision will certainly help the government in making sure that they know not only where he worked this year, but everywhere else he has worked too.
Hopefully, no one that you hire will steal your identity in the process even though they have your social security number.
All of the information is to be housed in a database created by the Social Security Administration that will be shared with the Department of Homeland Security, which has the authority to initiate investigations into all employers who don’t participate in the system, including those who pay Johnny to mow their lawn.
The Department of Homeland Security can receive “taxpayer identity information of each person [from a report which] . . . contains evidence of such person’s failure to register and participate in the Electronic Employment Verification System.”
As such, they can initiate an investigation into any person who doesn’t comply with the mandatory electronic reporting system whether they are an employer or employee.
In a similar version of the bill seen in 2005, Homeland Security would have been able to investigate any employee unlucky enough to have two different companies call in with the same social security number. However, it seems that in the new version, it was realized that some people actually have more than one job as that text has been eliminated.
Of course, the government will only use the information for its intended purpose—to stop illegal workers from getting jobs.
“The System shall collect and maintain only the minimum data necessary to facilitate the successful operation of the System,” says the bill’s text.
However, as stated earlier, a provision in the bill indicates that other branches of the government may benefit from the new database as well.
“Nothing . . . may be construed to limit the collection, maintenance, or use of data by the Commissioner of Internal Revenue or the Commissioner of Social Security as provided by law,” says the proposed law.
As seen before in Washington, DC, there may be collection of data for a stated purpose—in this case to fight illegal immigration—but it seems evident that the opportunity to collect data on US citizens is not going to be passed up.
If the bill passes, the most basic and private personal information about where American citizens work, their work history, their birthdays, and social security numbers will be called in to the government every time they apply for a job.
[Source]
pauliecannoli
Miche
Stuart Richards
bostonteapartygoer
mattdharris
deaconstruck
Less
ponggod
Todd Andrew Barnett
Jim Davidson
Peter Orvetti
Mike Seebeck
aynrkey
sgreffenius
It is pure ignorance to imply that the FairTax would in any way shape or form be a more controlling system of taxation than the current system under which we struggle.
And by the way, the family consumption allowance is not a living allowance, it is a rebate given in advance for the taxes every American with a social security number will pay as they purchase the basic necessities of life.
The only pure ignorance is not to read the links that I provided showing it is more controlling. My log history shows that you did not read them.
It doesn’t matter what you call putting all compliant subjects who cooperate with the regime SS system and cartel banking on a system which has them egularly receive regime check. It still remains exactly what it is.
Please read the links included, and the links included in those, before replying.
I count myself as a libertarian, but also as a supporter of the FairTax over against our current tax system. Any taxation may indeed be theft, but income taxation is particularly odious, because it makes us slaves, or serfs at best; it says, in effect, that the gov’t owns x% of our labor.
And of course less taxation is better than something “revenue neutral”. But the fact stands that we’re distinctly in the minority, and those in power believe in taxation. They’re not going to make a change which will (immediately) cut their funding. “Revenue neutrality” is thus *necessary* to make the change palatable to them.
But this puts us in a better position, because it brings the cost of gov’t into everyone’s daily view. We all know that with the current system most people only glimpse how much the gov’t allows them to keep once a year. Indeed, many people actually think they’re getting a bonus from the gov’t when they receive their rebate, instead of realizing they’re only recovering–without interest!–the ‘excess’ money the gov’t had preemptively seized from them over the previous year. But when all of that essentially hidden taxation is replaced with a sales tax, people will see day after day how big a chunk of their money the gov’t is costing them. And they won’t like what they’re seeing. That’s where we’ll find the political pressure to cut the cost. Naturally, converting everyone to libertarianism would be best, but that’s not going to happen; if we can get the gov’t out of our personal financial decisions, that’s a good enough start for now.
As for the entanglement of the “prebate”, I think we’d be better off then too than we are now. As it is, we’re required to tell the gov’t a huge amount about us: what we make, where we work, what we’re invested in, etc., all of which they check up on and hold us accountable for. But with the “prebate” all we *really* need to divulge is how big our household is, so that we get the full amount credited to us. It’s like a yearly census, relatively painless and much less intrusive.
Of course, Social[ist] Security would still exist, so that administration would still need to be informed about our income level to determine our benefits, but all its funding would also come from the sales tax, so no more withholding. And surely breaking that direct linkage would make it easier to reform too, ending the “lockbox” farce and revealing it for the welfare and income redistribution program it has been all along.
The FairTax isn’t perfect by any means from a libertarian perspective, but compared to where we are now, it’s goodness all around. IMO.
Which is of course why the prebate is such a great idea.
I’m not sure how many of the articles I linked previously you read, so I’ll repost them here.
The FAIRTAX:
A TROJAN HORSE FOR AMERICA?
By Claire Wolfe & Aaron Zelman
“Abolish the IRS!”
Read
responses to this article!
Read
the entire article or follow these links to sections of the article.
What
does the FairTax do?
We’re
likely to end up with both a national sales tax and an income tax.
The
rate of a national sales tax would be colossal.
Inflation
will kill you.
The
FairTax is monumentally unfair to retiring Baby Boomers.
The
national sales tax is subject to manipulation in even more direct ways
than the income tax has been.
The
tax will be used to track your entire financial life.
A
national sales tax will create a huge black market.
The
national sales tax will give government another reason to make cash
purchases illegal.
This
tax is designed to put every single American household on welfare.
Some
religious people will be penalized.
The
economy would very likely collapse.
You’ll
pay a higher sum for your new home.
Countering
the “FairTaxer’s” claims:
Claim
#1: Goods would be cheaper.
Claim
#2: A national sales tax would create jobs and support American manufacturing.
Claim
#3: Ordinary Americans would be freed from record-keeping and tax filing.
Claim
#4: A national sales tax is simpler than the income tax.
Advocates
of the national sales tax are naive – or believe that we are.
Why
is this article coming from a gun-rights group?
What
type of tax do we propose instead?
Full
text of dialog with AFT
Chuck
Muth: Flat vs Fair Tax
Jim
Cox: What’s Offensive in the Boortz FairTax Book
‘Progressive
Libertarianism,’ by Susan Hogarth
There’s
No Such Thing as a Fair Tax, by Laurence Vance
Dear
Congressman
by Laurence Vance
The Fraudulent Tax
by Laurence Vance
So goes the cry.
And who could disagree? The income tax is unAmerican in the most profound
way, punishing people for being successful. The tax code is vast and incomprehensible.
The agency that enforces it is universally loathed.
Yes, let’s abolish
the IRS. And the income tax.
Unfortunately,
the statement that usually comes next begins, “And replace it with …” And
there a new round of troubles begin.
Over time, proposals
have included replacing the graduated income tax with a flat tax, a VAT (value
added tax), or some form of consumption tax. For several years now, the buzz
has been growing for a national sales tax. While other “abolish the IRS” reforms
have languished, the national sales tax has, as they say, developed legs.
The most durable
proposal for a national sales tax – called the FairTax – is promoted by an
organization called Americans for Fair Taxation (AFT) (http://www.fairtax.org).
A bill to implement that tax (H.R. 25; Senate Bill 1943)(1) was introduced
in Congress early in the 108th Congress. The so-called “Fair Tax Act” has
54 co-sponsors as of this writing, plus the outspoken support of both Speaker
of the House Dennis Hastert and House Majority Leader Tom DeLay. President
George W. Bush expressed cautious support for the act (http://www.georgewbush.com/News/Read.aspx?ID=3422)
in response to a pre-screened questioner at one of his campaign events. In
his acceptance speech at the 2004 Republican Party convention, Bush strongly
advocated a total revamp of the U.S. tax system. Although he made no specific
proposal, his language was similar to that of the FairTaxers. And at the moment,
the FairTax is the only serious tax-revamp proposal on the Congressional table.
Finally, many,
many ordinary freedom-loving people, weary of the present outrageous system,
are cheering the FairTax as a great improvement.
But it’s not.
The FairTax is
not only not an improvement. We believe it’s UnFair, dangerous, and
a disaster in the making. You think nothing could be worse than the graduated
income tax? We can virtually guarantee you that, after five years of the FairTax,
you’d be looking back with nostalgia on the days when Americans had to put
up only with the IRS and the income tax.
What
does the FairTax do?
The misnamed FairTax
is a national sales tax. Under the act promoted by AFT and now being considered
by Congress, the federal government would impose a tax on all new goods
and all services at the retail level. Proponents claim the tax would initially
be 23 percent, but the federal government would actually add 30 percent
to the cost of nearly everything you buy. (We’ll explain the disparity below.)
The IRS would
be abolished, effective three years after passage of national sales tax legislation.
The sales tax would replace both the income tax and the FICA payroll tax.
Gift and estate taxes would go, under the provisions of H.R. 25. That’s the
good part. (But don’t count on it – as we’ll also see below.)
The new tax would
be levied on food, clothing, medicine, all services, newly constructed homes
– everything except used items. Then every U.S. household would receive
a check from the federal government each month, based on the number of Social
Security card holders in each family. This check would supposedly compensate
each of us for the tax we pay on necessities.
Under current
projections, an individual (married or single) would get $178 per month or
$2141 per year. For every child or dependent the household would get an additional
$61 per month or $732 per year. Therefore a family of two adults and two children
would receive payments from the federal government of $5,746 per year or $478.83
per month supposedly to compensate them for taxes payed on necessities.
Proponents point
out that the sales tax is simple and highly visible, so Congress won’t have
such an easy time imposing hidden taxes. And they call it self-limiting: If
taxes get too high, people simply stop buying. A tax increase might thus actually
result in a revenue decrease for the federal government.
The following
are some of the reasons we firmly believe the FairTax would be a disaster
for our freedom and our economic well-being. Some of these “unintended consequences”
of the national sales tax are verifiable facts or solid certainties based
on historical experience. Others are our projections, based on our knowledge
of history, the devious ways and means of government, and on technologies
and trends that are now developing. These trends may, and probably will, intersect
with the “FairTax” in ways that tax proponents would simply rather not consider.
Here is what we
expect:
We’re
likely to end up with both a national sales tax and an income tax. Even
if legislation required abolition of the income tax (as HR 25 does), a “national
crisis” would soon cause the income tax to be “temporarily re-instated” and
the Internal Revenue Service would remain in our lives on an “emergency basis”
that never ended.
Likelihood: High
probability.
When we posed
this issue to Dr. Karen Walby, research director for AFT, she responded in
part, “The income tax code would be abolished. Not in my wildest dreams can
I see the members of Congress being able to agree on a new income tax code.
The current Internal Revenue Code, regulations, and IRS rulings amount to
60,000 pages. Not one person in this country understands all of it.”
Unfortunately,
Dr. Walby’s statement contains two elements that are common to too many “FairTax”
arguments: some verbal sleight-of-hand and a lot of naivete. Although she
correctly notes that the income tax portions of the Internal Revenue
code would be abolished by H.R. 25, she implies that the entire tax code is
scheduled for abolition. That is untrue. H.R. 25 is loaded with amendments
to the Internal Revenue Code (including new forms of punishment for tax evasion),
but it abolishes only a portion of the enormous, incomprehensible tax code.
Also, it would not be necessary for Congress to re-invent a new, complex,
controversial income tax code. All they’d have to do is write a few lines
reinstating the existing tax code and retaining the IRS.
Furthermore, even
if the income tax does truly go away (an outcome devoutly to be wished) bureaucracies
never simply disappear. It took nearly 30 years for Congress to have the courage
to disband the ridiculous U.S. tea-tasting board. When Prohibition ended in
the early 1930s, the federal government’s booze-busting apparatus was almost
immediately put to work creating and enforcing America’s first war on drugs.
That’s history. And that’s the reality of how Washington works. Those savage
tax auditors and armed tax enforcers won’t be put out in the streets to get
honest jobs; they’ll continue to be employed – most likely as sales tax enforcers.
The
rate of a national sales tax would be colossal. Remember, even the proponents
admit they’d need a 23 percent tax rate to fund the current size of
the federal government. However, they are starting out their new “fair” tax
system with highly deceptive language.
H.R. 25, Section
101(b)(1) states “FOR 2005- In the calendar year 2005, the rate of tax is
23 percent of the gross payments for the taxable property or service.” Note
the phrase “of the gross payment.”
Here’s how it
works: You buy a candy bar for a total price, including tax, of $1.30. One
dollar of that price pays for the candy bar, $.30 goes to the federal government.
One dollar purchase
+ $.30 in tax sounds like 30 percent to you and me (and to every state that
currently has a sales tax). But the “FairTaxers” don’t calculate it that way.
They say: $1.30 total price. $.30 = 23 percent of $1.30, therefore the tax
is 23 percent.
Many critics have
pointed out that this is a deceptive way to calculate a sales tax. AFT rebuts
the critics by saying (we paraphrase for simplicity), “If you made $1.30 in
income and paid $.30 of it in tax, you’d call it a 23 percent tax rate.” The
23 percent figure is what AFT refers to as the “tax inclusive” rate.
But a sales tax
is not an income tax, and when we see national sales tax advocates and uncritical
journalists promoting the 23 percent figure without giving the underlying
explanation, we can only think that some very thick wool is being pulled over
people’s eyes.
It gets worse.
A 1998 analysis by the William Gale of the Brookings Institute calculates
that in reality (to pay all current government expenditures while also compensating
for such factors as tax evasion), the national sales tax might have to run
as high as 67 percent. AFT disputes that high figure. But they do not
dispute that their initial “23 percent” tax rate would actually be achieved
by adding 30 percent to the purchase price of goods.
Bruce Bartlett
a senior fellow for the National Center for Policy Analysis, slams the 23
percent claim, also, saying it’s too low even to cover current government
spending. He writes in the National Review:
Once again, although
the FairTaxers dispute most of Bartlett’s claims on their website, they make
no attempt to refute the basic fact: their “23 percent” is really 30 percent,
under the rosiest possible scenario.
Likelihood of
the tax actually being more than 23 percent: Certainty.
Inflation
will kill you. For decades, the income tax gradually crept up as government-caused
inflation pushed Americans into higher and higher tax brackets. This outrage
caused horrific hardship before Congress was finally forced to index the income
tax to the inflation rate (meaning that if your income goes up with the inflation
rate, your tax rate doesn’t). There is no indexing with the sales tax. As
goods become more expensive, you have only two choices: pay more in taxes
or do without the things you need.
Given the U.S.
government’s eternal spending spree, the mounting deficits, and a national
debt whose true long-term obligations run into the tens of trillions, it’s
a virtual certainty that the federal government will inflate the currency
in an attempt to keep Medicare and Social Security afloat and to keep its
fiscal house of cards from collapsing. As your food, clothing, vehicles, and
medical care get more and more expensive, you’ll pay more and more and more
sales tax.
Consider just
one example. You’ve been saving to buy a new house. That house now costs $260,000
(which is already 10 times what your parents would have paid for an identical
house in 1968). Your “FairTax” on that home will already be a whopping $78,000,
for a total purchase price of $338,000. Then government printing presses go
into high gear. While you’re still saving up for your down-payment, double-digit
inflation takes over and the price of your house zooms 20 percent in one year.
The house now costs $312,000. Your “FairTax” on that house is now $93,600
for a total purchase price of $405,600. And you have to wait another year
to buy it. And if inflation continues to go up, your hopes recede even further.
(And all this is without mentioning the increased mortgage interest you’ll
have to pay over the decades to cover both the government-caused inflation
and the government-benefiting tax.)
AFT never mentions
the effects of inflation and always insists simply that prices of all American-made
goods (presumably including house prices) will drop once the income tax ceases
to be an underlying factor in the cost of goods.
Likelihood of
inflation boosting the sales tax: Certainty
The
FairTax is monumentally unfair to retiring Baby Boomers. People who have
paid 1/4 or 1/3 of their income in taxes for 40 years will now have to pay
an equally high tax on all the after tax income they’ve managed to
put aside for their retirement. Every time Boomers buy anything with their
lifelong savings, they’ll be double taxed.
Likelihood: Certainty
Once again, we
asked Dr. Walby about this double taxing. She wrote:
The response about
IRSs and 401ks is true as far as it goes. But this doesn’t answer the question
about savings in general. Your regular savings account, your CDs and other
forms of savings which are not tax-deferred (as IRAs and 401ks are) will
be double taxed.
In fact, we suspect
that this (along with the ability to profit from inflation) is a prime motivation
for the tax change, from Congress’ perspective. Politicians know that retiring
Boomers are soon to be paying less in taxes on their reduced incomes. They
want their cut to continue!
The
national sales tax is subject to manipulation in even more direct ways than
the income tax has been. Let’s say that Congress or some powerful regulatory
agency decides that fatty foods or sugar or potato chips are bad for you –
wham! Suddenly there might a 200 percent tax on those items.
Government won’t
have to ban firearms; they’ll just place a 500 percent sales tax on them.
Or a 1,000 percent sales tax on ammunition. Cigarettes? Imported clothing?
“Gas-guzzling” SUVs? Given the wonders of the computer age, the eternal greed
of government, and the unquenchable meddling of social engineers, we’ll soon
have custom tax levels for them all, constantly calculated and adjusted by
computer.
FairTaxers talk
about the tax being self-limiting; when it gets too high, people stop buying.
While they praise the limiting effect that might have on government, they
ignore the damage that a too-high tax might have on the unfortunate industries
or individuals that get hit with it – a problem that’s built into the tax
even in its initial form, and which becomes Draconian once politicians realize
they can use the sales tax as a club or a threat.
Likelihood: Probable.
The
tax will be used to track your entire financial life. While H.R. 25 does
not contain any requirement that every purchase be linked to an individual’s
ID, the trend toward tracking every purchase is growing. We expect that eventually,
your “national ID cash card” will be required when you buy anything. Or giant
databases will combine the records of your credit cards, store loyalty cards,
radio-frequency ID tags on merchandise, government ID, etc. into one vast
set of interlinked records, immediately accessible to – and subject to manipulation
by – government agencies.
Therefore, the
national sales tax will eventually be used to track – and manipulate – what
we purchase. Instead of merely being profiled by Wal-Mart or Safeway, your
buying habits will be available in detail to the Department of Homeland Security,
the Department of Health and Human Services, the FBI, the Bureau of Alcohol
Tobacco Firearms and Explosives, university researchers – you name it.
The government
will then decree that it has a vital interest in knowing exactly who is buying
too much unhealthy food, the “wrong” kinds or amounts of medicine, ammunition,
or unapproved reading matter. Your purchases could lead to criminal investigations
(for buying unapproved books or contributing to the “wrong” charities), denial
of insurance (for buying unhealthy foods, firearms, or cigarettes), suspension
of your drivers license (for buying too much liquor), and other arbitrary
bureaucratic punishments. Such investigations and prohibitions are already
underway in America. The national sales tax can make them much easier by creating
a federal database of all purchases in real time, linked to the identity of
the purchaser.
Katherine Albrecht
of the consumer-privacy group CASPIAN
points out one way in which the social engineering and people-tracking aspects
of the national sales tax might go together: As databases come to hold more
information on each individual American, the tax could be manipulated to fit
the person, rather than the item: “A welfare mother puts her RFID-enabled
ID card under the scanner (or waves her RFID-chip implanted hand across the
scanner) and the system says, ‘Oh, you’re a person who’s taxed at the one
percent rate.’” On the other hand, a person with a $100,000 salary flashes
his card or waves his chipped hand and the system recognizes someone who’s
“rich” enough to be taxed at the 50 percent rate.
If Albrecht turns
out to be right, that would also, of course, lead to the new “crime” in which
low-taxed individuals purchased items for high-taxed individuals. Again, in
fairness we must assure you that nothing in the current legislation calls
for purchase tracking or custom taxing. (In fact, the FairTaxers appear to
believe seriously that the tax will always remain absolutely flat and neutral.)
We’re just remembering our history, being realistic about the methods of government,
and heeding Lyndon Johnson’s words at the top of this article.
Likelihood: High
probability (of tracking); possibility (of custom tax rates for individuals).
A
national sales tax will create a huge black market. A punitive sales tax
on everything you buy will lead to enormous black markets. You’ll soon see
gang violence and vast new prisons being built to house the millions of people
illegally trading DVDs, cigarettes, canned foods, TV sets, and clothing. This
will be true even if the underlying prices of goods drop – as the FairTaxers
assure us will happen. If people can evade a 30+ percent tax – they will.
Even if the price of items is 20 or 25 percent lower than today (a claim we’ll
examine in a moment) people will still want – and go after – their 30 percent
black-market discount.
Although the tax
is initially only to apply to services and new items, here’s another
projection: Swap meets, farmers’ markets, gun shows, and garage sales will
automatically come to be considered prime places for black market activity.
Either the tax will eventually be extended to used items, or all such free
markets will eventually be heavily regulated and patrolled – or banned outright
as havens for the new anti-sales tax criminals and resisters.
Likelihood: Certainty
(of black markets); high probability (of regulating used and private sales)
AFT persistently
denies any possibility of black markets developing. When we raised the issue
Dr. Walby responded:
Again, that’s
true as far as it goes. But merely because one form of tax “avoision” goes
away doesn’t automatically mean no tax avoision is possible. People who are
motivated to keep their own money will always invent thousands of clever ways
to do so; we’re astonished at the FairTaxers’ naivete in assuming there will
be no black marketeering.
And remember –
to whatever extent some people manage to keep more of their own money through
black-market purchases, those who buy on the legal (taxed) market will end
up paying higher taxes to feed the insatiable federal government.
The
national sales tax will give government another reason to make cash purchases
illegal. Because buying with cash will make it easier to evade the sales
tax, taxing authorities will quickly conclude that buying with cash is a sure
indicator of criminal activity. The federal government has already classed
all large cash transactions (in some cases, that means amounts as low as $750)
as “suspicious.” Expect cash purchases of all sorts eventually to become criminal
under the sales tax regime. After all, as government and the media will soon
tell us, “It used to be that big drug dealers and crooked businessmen evaded
taxes on large purchases. But now millions of Americans are cheating their
countrymen every day by evading tax on billions of small, but cumulatively
huge, purchases of milk, coffee, CDs, and tee-shirts!”
Cash purchases,
of course, will also make it more difficult for government social engineers
and corporate marketers to make sure your buying habits meet their standards.
Cash purchases make it harder to tell whether you’re guilty of eating too
much butter, consuming too much beer, or owning too many guns. That will be
yet another reason to make all purchases trackable. But the excuse given will
be to prevent the terrible crime of sales tax evasion.
Likelihood: High
probability.
This
tax is designed to put every single American household on welfare. The
FairTax is regressive – that is, the poorer you are, the more you pay, proportional
to your income. Sponsors of the new tax have come up with the worst possible
solution for making it more “fair.” They want to put every single American
household on the dole.
Instead of simply
not taxing staple items like food, health care, transportation, or clothing,
they want the federal government to send each of us a check every single month.
Think of the dependence this would create. It’s very hard to imagine a “limited
government” — which many of the FairTaxers say they want – buying the loyalty
of every American household with a monthly government payment of $478.83 –
or any other substantial amount.
Likelihood: Fact;
it’s built into H.R. 25.
If everything
else about the FairTax proposal were simply wonderful, we would oppose it
because it creates universal dependence on a government check (or direct bank
deposit) each and every month. Yet once again, AFT doesn’t even want to look
at the effects of such dependency. When we raised the question, Dr. Walby
responded only:
But the “rebate”
isn’t similar to the earned income tax credit because it’s intended to go,
month after month, to every American household. If the intent was really
to avoid taxing essential spending to place less burden on the poor, one could
simply not levy the sales tax on stable items like food, medicine,
school supplies, or clothing.
Some
religious people will be penalized. The monthly rebate check is to be
paid by the Social Security Administration, based on the number of SSN holders
in a household. Tens of thousands of Americans (for instance, the Amish, or
those who believe the SSN is the biblical Mark of the Beast) do not have social
security numbers. Therefore, they would have to pay the heavy national sales
tax without being compensated in any way. When we asked AFT how their proposal
addressed this inequity, their reply was one sentence long: “There is no requirement
that any individual apply for the rebate.”
In other words,
tough luck.
A working-class
religious family of four, forced to absorb $478.83 more than its neighbors
for basic expenses each month simply to remain true to its faith, would have
considerable incentive to make its purchases on the black market or otherwise
go underground to survive.
The
economy would very likely collapse. Just before the FairTax went into
effect, the economy would boom as Americans raced out to buy cars, electronic
gear, or even to stock up on food. They would not believe that prices on everything
would drop the very next day, or the very next week, after the sales tax was
imposed. Their spending would reflect their quite rational fear that prices
would simply jump 30 percent.
The day the tax
went into effect, the American economy would collapse. Eventually, the economy
would restabilize, and some prices would drop, as AFT claim. But some industries
producing high-ticket items, like the automobile industry, furniture manufacture,
or construction, might never recover – even if removal of the income tax did
allow prices to drop and Americans to keep more of their paychecks.
Likelihood: Probable.
You’ll
pay a higher sum for your new home. If the tax passes as written, new
homes would suddenly become 30 percent more expensive than existing ones (because
all new construction, but not existing homes, would be subject to the tax).
Two homes could sit side-by-side – each with four bedrooms, two baths, and
comparable features – and one would cost $50,000 or $100,000 more than the
other, simply because it was being marketed by its builder, rather than a
resident.
No one would want
new homes. Construction would dry up. The lack of new homes and the price
differential between new and existing ones would in turn create demand for
existing homes and push their prices up. Eventually, Congress might feel compelled
to save the construction and building materials industries by imposing the
sales tax on “used” homes, as well. Or the upward thrust of “used” home prices
might, by comparison, make new homes desirable again. Housing markets would
eventually stabilize, but only after traumatic disruption.
Oh, and that tax
applies to your remodeling supplies, too.
This process of
constantly adjusting the tax in vain attempts to undo such unintended consequences
will take place all across the economy – and go on for decades.
Likelihood: Probable
(disruption of the housing market); high probability (tinkering with the tax
in panicky attempts to fix unintended consequences)(3).
Countering
the “FairTaxers” claims
AFT makes dozens
of claims that are backed by only the most sketchy evidence. We don’t have
space to refute them all. But here are four examples of dubious claims and
the realities behind them.
Claim
#1: Goods would be cheaper. Proponents of the new tax say that their claimed
23+ percent tax rate wouldn’t be so painful because goods would be cheaper.
Without an income tax, businesses could charge less for the items they manufacture.
Maybe. And in
a truly free market, even likely. But in our real world and our managed economy,
this is far from assured. First of all, even if the income tax were repealed,
the price of imported goods would have no reason to drop – and think about
the huge percentage of our vehicles, electronics, clothing, and other goods
that are now manufactured overseas (again, more on that in a moment).
Second, there
is simply no guarantee that manufacturers would lower prices – or that the
government would resist the temptation to continue placing various punitive
taxes on makers of goods – which would force up their underlying cost. The
income tax is hardly the only tax the government uses to make our goods more
expensive.
And what about
products and services whose prices are already set (or “supported”) by the
government? Americans already pay three times the typical world rate for sugar,
for instance, solely because of government price supports. Neither the income
tax nor free markets have anything to do with it. Would powerful industries
with high-paid lobbyists urge the federal government or state governments
to set their prices considerably lower? Not likely.
Prices of domestic
goods and services may certainly fall a bit. Some may fall substantially.
But overall, we predict that the after-national-sales-tax price of
goods (including the tax) will be higher than the after-income-tax price of
goods. And once again we need to consider the worst case: what happens if
we end up with both the national sales tax and the income tax?
Likelihood of
goods remaining more expensive than the FairTaxers claim: High probability.
Claim
#2: A national sales tax would create jobs and support American manufacturing.
At first, this seems counterintuitive. A tax that boosts the price of
all consumer goods by 30 percent (or more) would help manufacturers? Well,
yes, after the U.S. economy recovered from the probable post-tax crash, in
the long run the national sales tax actually might boost certain American
industries.
What the FairTaxers
don’t tell you is that it would do so by making one enormous class of goods
cost 30 percent more than competing goods. Here’s the plan: imported products,
which would not benefit by the planned repeal of the income tax, would suddenly
be that much more expensive than their domestic counterparts.
That would be
the big advantage gained by U.S. manufacturing – and no doubt many people
reading this article are all for that. “Buy American!” they cry. “Quit sending
our jobs overseas!”
Yet placing a
30 percent or higher penalty on foreign goods essentially forces us to carry
U.S. companies on our backs – even when they’re less efficient, less innovative,
or produce poorer goods. Competition from overseas has often forced American
manufacturers to improve their products (as Japanese autos did in the 1970s).
Without competition, companies become complacent and sloppy – and their customers
are the ones who ultimately suffer.
And again …
what happens if the price of American goods don’t drop? Or if we still end
up with the income tax on top of the sales tax?
Likelihood: Probable.
Claim
#3: Ordinary Americans would be freed from record-keeping and tax filing.
Initially – if indeed Congress were to abolish the income tax – this might
be true. But not in the long run! Again, look at what the actual legislation
says.
From HR 25 Section
101(d):
In other words,
you, not the seller, are liable for the sales tax. Dr. Walby maintains
that once you’ve received your receipt from a business, you’re off the hook.
According to her, the businesses will (not may, but will) be audited periodically
to make sure they’re charging and paying the tax. If they are, fine. If they’re
not, it’s the business, not you, that will be in trouble.
We believe her
when she explains that this is how the law is intended to work. We
simply don’t believe this is the way the law will work in the long
run. No, when a business is caught not charging sales tax, eventually the
federal government will seek to make criminals out of business customers –
who are, after all, “conspirators” in tax evasion, black marketeering, and
racketeering.
You’ll have to
have a receipt to prove you bought that can of beans, that computer, or that
car “legally.” Lose your receipt and you could be required to pay that 30+
percent tax all over again – plus penalties and interest.
Worse, using the
precedent of the drug war and the income tax, we’d be presumed guilty until
we proved ourselves innocent. Or, under the legal fiction now used to perpetrate
civil forfeiture, our property would be considered guilty if we had no receipts
for it. Without due process, it could be confiscated.
Since current
paper receipts are easy to forge, an ever-escalating federal program would
have to be dedicated to designing – and eternally re-designing forge-resistant
store receipts, which private businesses would be forced to adopt under penalty
of law. New federal crimes would be created for receipt forgers or possession
of forged receipts. Being found in possession of an item originally purchased
by a relative or acquaintance could conceivably become a crime, if the tax
is extended to used goods.
Yes, these are
projections and they sound draconian. Nothing in the above several paragraphs
is written into the current bill. But remember Lyndon Johnson’s warning. And
remember the way government works.
Likelihood: Certainty
in the long run (of paperwork for citizens); High probability (of Draconian
punishments and controls for failure to keep receipts and other records
Claim
#4: A national sales tax is simpler than the income tax.
David Gross (6), an
alert critic of both the present and proposed tax system writes:
As we’ve noted
above, the possibilities for using a national sales tax as a social engineering
tool or as a carrot/stick for corporations are plentiful. To hungry politicians
those temptations will prove irresistible. No matter how a “pure” a national
sales tax is initially, it will soon become as complex, punitive, and manipulative
as any other mega-billion dollar cash cow.
Anyone who believes
a national sales tax would never be used for social engineering, or that it
would never be used to favor one industry over another, or that it would never
be jacked up even more sky-high that it’s already proposed to be, or that
it would never be used to persecute ordinary Americans, or that it would never
lead to black markets, is simply naive about the ways of government and ignorant
of history.
Read the “Fair
Tax Act” for yourself. You’ll discover there’s absolutely nothing simple about
the legislation. Already – before the inevitable decades of amending and tinkering
– H.R. 25 is an enormously complex proposal that contains gems like these:
Yes, that’s right.
That last provision is for an income tax and it’s included in legislation
that claims to “abolish the income tax.” And those are only a sample of the
pitfalls and landmines you’ll find within this terrible legislation. Read
it. Then re-think whatever favorable attitudes you may have had toward it.
(4)
Likelihood: Dead
solid certainty (of complexity and punishments)
Advocates
of the national sales tax are naive – or believe that we are.
Virtually all
of the assumptions promoted by AFT are based on the rosiest possible projections.
That there will be zero tax evasion. That all new goods and services will
always be taxed equally, without social engineering or other political manipulation.
That the base price of new goods will drop 22 percent across the board in
the first year (and the price of all services will drop by 25 percent in the
same period). That “compliance costs” under the new tax bureaucracy will be
lower than those under the existing tax system.
They totally ignore,
or breezily dismiss, the jolting disruptions to the economy that imposition
of their plan will cause. They pretend there will be no black markets. Despite
the clear statement of tax liability in the proposed law, they claim Americans
will be forever free of paperwork. They simply don’t deal at all with all
the obvious implications for citizen tracking inherent in a national sales
tax.
They assume that
the IRS and a raft of long-time taxes will simply go away, despite every clue
that history and the nature of bureaucracy has to offer.
They rightly call
all income taxes a “tool of tyranny.” The FairTax, they say, “dramatically
changes the basis for taxation by eliminating the root of the problem: Taxing
income.” But taxing income isn’t the root of the problem – although indeed
the income tax is a horrible Marxist system. The root of the problem is a
government unchecked, a government that believes it has an inherent right
to some government-defined percentage of our property, our time, our very
lives. These starry-eyed tax advocated fail to see – or hope we fail to see
– that other forms of taxation can easily fill that same role.
Above all, they
make the stupidest possible assumption – or they ask us to. They assume that
the federal government will not grow, that it will not get more greedy, that
it will not consume an ever larger share of everything Americans produce.
Why
is this article coming from a gun-rights group?
Jews for the Preservation
of Firearms Ownership (of which one of the co-authors is executive director)
is a Second Amendment educational foundation, not an economic think tank.
So why is this article coming from us?
Two reasons. One:
The tax will be used to attack and limit gun ownership; two, it’s bad for
freedom, and what’s bad for freedom is bad for all gun owners.
It is painfully
obvious to anyone who observes the tactics of the federal government (and
the lobbying groups that buzz around it like flies) that a national sales
tax will be used to attack gun ownership. Already, under the planned
tax, anyone who wants to buy an imported firearm like a Glock or a SIG Sauer
may have to pay 30 percent more than any American equivalent. But the ardent,
and persistent gun prohibitionists in Congress – people like Hillary Clinton,
Charles Schumer, Dianne Feinstein, Caroline McCarthy, and John Kerry – will
never be content with that.
Do you want to
see a 500 percent tax on firearms? A 1,000 percent tax on ammunition? A 200
percent tax on targets, smokeless powder, camouflage clothing, and knives?
Then tell your Congressperson you want a national sales tax.
Our second reason
is that, as horrible as the IRS and the income tax are, the FairTax proposal
is even worse for freedom.
Particularly worrying
is the plan to put every single American household on federal welfare. Many
households will become desperately dependent on government payments to help
them survive the higher price of food, clothing, transportation, health care,
and shelter. Wealthier people will simply see their monthly handout as an
entitlement, a bonus – fun money to help fund their spending sprees.
Either way, a
direct payment from the federal government each month will make people less
inclined to protest injustice, less inclined to make waves, even when waves
are seriously needed. Because people won’t want to risk losing their monthly
“freebie,” they’ll be less inclined to look critically upon the government
– and more inclined to oppose anybody who threatens to cut off their monthly
handout.
It’s all a matter
of perception; in all too many cases, people are going to view their $500
freebies as being more important than the even higher – but incrementally
smaller – amounts they pay out in sales taxes day by day. They’ll say (as
so many do with government handouts now), “I’m entitled. After all, I’m only
getting my own money back.”
And besides, millions
of households will be happily gaming the system – collecting their monthly
handouts while buying tax-free goods on the black market. Big government will
have achieved its ultimate dream: Citizens will like higher taxes.
In the end, as
tyranny tightens its iron grip, Americans will be less inclined to bite the
fist that they believe feeds them – even if they’re actually paying more in
taxes than they do now. All they’ll see is that freedom might threaten their
government payment. And since fewer will be able to buy guns, even those who
want to fight a future tyrant will have a harder time doing so.
Some time ago,
we wrote an article claiming that gun-rights and Social Security couldn’t
co-exist in the long run (http://www.jpfo.org/ssandguns.htm).
We’ll go further now and add that gun-rights and a national sales tax cannot
and will not co-exist in the long run.
We sincerely hope
we’re wrong. But from where we stand, the conclusion seems inescapable: Imposition
of a national sales tax will inflict the same kind of long-term damage to
American society that was earlier inflicted by imposition of the income tax,
the adoption of fiat currency, and life-consuming programs like the New Deal
and the Great Society. And it will be coming at a time when America’s fiscal
health is already too shaky to absorb one more such blow.
What
type of tax do we propose instead?
Now comes the
moment where we’re supposed to propose our alternative. “Be constructive,”
someone will demand. “If you don’t like their proposal, what have you got
to offer that’s better?”
Here’s our alternative:
Nothing.
Ban the income
tax, definitely. Banish it. Disband the Internal Revenue Service and auction
their buildings to the highest bidder. Let all the IRS auditors, clerks, and
armed enforcers get honest jobs.
But don’t replace
the income tax with any tax, of any variety.
The United States
survived until 1913 without an income tax. It survived until World War II
without wage withholding (a federal trick “for the duration of the war” that
increased tax collections enormously).
The income tax
has enabled and encouraged wild governmental spending sprees. And irony of
ironies, the federal government has now gotten so drunk on reckless spending
and its attendant debt that (5) an amount equivalent to all the income
taxes collected west of the Mississippi River accomplishes nothing but
helping pay the interest on that debt! You pay and pay and you’re not even
getting government services for your money. Just paying off debt that should
never have been incurred – and probably wouldn’t have been incurred if Americans
hadn’t been forced to hand over so much money to government.
If you want smaller
government, then don’t spend your time thinking of “better” ways to feed big
government. If you want freedom, don’t fall for ploys that simply enable to
government to find new routes into your pocket and your life.
If you want to
tame the beast of tyranny – starve it into submission. Ban the income tax.
Trash the unFairTax. And put the government back on a leash.
Copyright © Aaron
Zelman 2004. Permission is granted to distribute this article in its entirety,
so long as full copyright information and full contact information is given
for JPFO.
Published by:
Jews For The Preservation of Firearms Ownership, Inc.
P.O. Box 270143
Hartford, WI 53027
Phone (262) 673-9745
Fax: (262) 673-9746 http://www.jpfo.org
What’s Offensive in the Boortz FairTax Book
by Jim Cox
Beyond the proposal for the FairTax itself, the Neal Boortz/John Linder book has even more verbiage to offend libertarians than it does points we can cheer.
The following is a comprehensive recounting of the bad to be found in The FairTax Book:
The book isn’t about reducing taxes or spending but about funding the entirety of current spending levels (2).
The historical example of the 1872 repeal of the income tax is noted, but the lesson that it was done without trading the income tax for a new tax is overlooked (11).
The tax trade in the Ruml plan of 1942 – with the taxpayer taking it on the chin – is recounted, but the lesson of not trusting politicians with such tax trades is ignored (27).
More than an entire chapter is spent celebrating the idea of every household receiving a monthly check from the federal government (79–90).
A reference to “replacing virtually all personal income and corporate taxes” is slipped in, apparently betraying the book’s claim that the national sales tax will replace all of these taxes (82).
There’s a passing reference to politicians who thrive on others’ dependency, but the idea of every household receiving a monthly check from the feds disturbs these authors not at all (88).
The authors seem quite stressed over individuals using things such as Offshore Financial Services and Eurodollar transactions to avoid death taxes and other taxes (99–100).
The authors want the US to become a tax haven for businesses, but bellyache about other countries being such tax havens (100–101).
Part of the FairTaxers’ propaganda that the intended sales tax rate will generate as much revenue as all of the current income-based federal taxes do today is based on three unrealistic assumptions: 1) no increase in black market activities; 2) governments at all levels paying the tax; and 3) no additional exceptions to what is taxed being implemented (106).
It is claimed that businesses will no longer need to keep payroll records (108). Then, inconsistently, the authors state that businesses will in fact report the number of quarters of employment to the Social Security Administration (168), while the FairTax.org website states: “Employers continue to report wages for each employee … for the determination of benefits.” [emphasis added]
The authors believe that when people avoid any taxes it causes an increase in other people’s taxes (4, 93–94) – despite the fact that at other times they tell us politicians will always spend any additional money they receive (136).
The authors celebrate the prospect of broadening the tax base for the unconstitutional Social Security program and bemoan the fact that currently Social Security taxes are not levied on dividends (136–137).
Apparently it is offensive that the IRS would demand that golfer Lee Trevino pay gift taxes on heart surgery he paid for his caddy, but not offensive if he were forced to pay their hefty sales tax on that same surgery (142).
Revealing a near-psychotic level of naïvety, the authors tell us that the kind of abuses suffered under the IRS “simply wouldn’t happen” once the FairTax is implemented (145–146).
In the Q & A, we’re told that questions and objections unanswered in the book itself is why we have talk shows and email and that the Neal Boortz Show is the unofficial clearinghouse for the FairTax. Yet Boortz has avoided answering the objections I have raised (as well as those of others who have contacted me) (148, 179).
The authors attack doubters who point out that the plan calls for a sales tax rate that is 30% of an item’s price, claiming that such critics “never miss a trick.” Yet Boortz and Linder wrongly claim that their misleading, but more appealing, 23%, is the proper figure (152).
To further muddy the waters concerning the intended national sales tax rate the book refers to a $100 item as one priced at $77 with the $23 worth of tax. Once upon a time, one of the touted virtues of the proposal was to bring the tax rate out in the open for the taxpayers…now the intention is to hide the tax within the price as politicians currently do with gasoline prices (152, 154)?
Denying the lessons of marginal analysis, we’re told the deductibility of charitable contributions has no effect on the decision to contribute – in their enthusiasm for this new tax scheme these guys will claim anything to tout the FairTax, it seems (164–165).
In defiance of all common sense, law, and history the authors claim that politicians will only be able to change the tax rate itself, not which items the tax is applied to, once the FairTax becomes law (166).
First, we’re told that the FairTax will apply to all new retail purchases, goods and services alike, then inexplicably we’re told that that your monthly bill for access to the Internet will not be so taxed (77, 170).
The authors expect us to cheer at the prospect of the states’ new-found power in collecting an extra $20 billion on sales of goods through the Internet (171).
We’re told that the FairTax will not apply to education expenses (at least college and other tuition), while nothing is said about home schooling supplies and other such spending. This is based on the idea that education is an “investment.” Of course, this gives away the fact that everyone will be clamoring to have the goods and services they sell officially classified as “investments,” thus unraveling the alleged simplicity of the entire scheme and keeping all those K Street lobbyists in business (171).
The authors call for reaching for the possible. But surely there are better possible goals to reach for than building a movement to institute the FairTax. How about for instance, a movement to limit government to its Constitutional functions (174)?
A virtue claimed for the FairTax is that it was not written by politicians, though of course the final bill will be. The authors claim in contrast that the income tax was written by politicians, though they ignore their own recounting of how the income tax came from the mind of Karl Marx (175, 180).
They have the audacity to state that “income taxes are seized. Consumption taxes are paid.” It’s time to apply the often-stated Boortz challenge: try not paying your [sales] tax and see how voluntary they are (176).
The authors manage to refer to their status-quo-protecting $2.5 trillion take for the feds as “revolutionary legislation” (178).
The cheap shot is taken against those who dissent from this scheme. So let me say that I did not read this book and write this critique because I like shooting down other people’s ideas, or have no ideas of my own. Here are a few alternatives to the FairTax:
*
The Liberty Amendment is supported by the most libertarian/strict constructionist member of Congress, Ron Paul of Texas. The two authors could have written a book called Constitutional Government and developed a following for this amendment – but they didn’t.
*
The Read the Bills Act is a piece of legislation deserving of support; but this hoopla over the FairTax helps to keep people from knowing about it.
*
Walter Williams has proposed a Constitutional Amendment worthy of support, but again, it’s not well known in part due to the energies devoted to the FairTax scheme.
*
Milton Friedman, through the National Tax Limitation Committee, has proposed constitutional changes as well.
*
Harry Browne detailed a way to eliminate all taxes, except the current import duties and excise taxes.
*
The Cato Institute has published its Handbook for Congress now for more than 10 years. The Handbook has hundreds of pages of analysis and literally dozens and dozens of specific policy recommendations and is distributed to all 535 members of the House and Senate each Congressional term.
I can only conclude that neither of our two authors wants Americans to know anything about these – and many other – worthy ideas since they don’t mention them in the book, discuss them on the radio, or tout them on the Internet (179).
With seemingly no shame at all, the authors actually brag of their efforts to fund the current expenses of the grossly bloated federal government (179).
Rising to new levels of silliness the authors tell us the FairTax will have none of the flaws of the current income tax (180).
Yes, America is better than the income tax, as the authors say; but it is also clearly better than the FairTax (180).
And finally, in calling the FairTax movement the “Second American Revolution”(!) the authors apparently believe the American Revolution was not about individual rights and limited government but about a way to fund the British Empire more efficiently, in lieu of a tax on tea (180).
November 10, 2005
Jim Cox is an Associate Professor of Economics at the Lawrenceville Campus of Georgia Perimeter College and author of Minimum Wage, Maximum Damage.
There’s a lot more where those came from, but again I have to say: just follow the links previously provided!
I don’t believe it. As pointed out in the articles above, it will simply be incorporated into the price, as already is being done with gasoline taxes.
Need proof? The tax proponents themselves calculate the rate “tax inclusive”. 23% of the total price, rather than 30% above the non-tax price. Which means the total price is all you will ever see.
The last thing government would allow is exactly what you posit.
See the articles above for why the “Fair Tax” plan if ever implemented in reality would lead to all purchases being tracked to insure compliance.
However, let’s suppose for a moment that we did in fact get the “fair tax” exactly as advertised with no changes. Small businesses would still have to do all that record keeping, individuals supposedly wouldn’t. Would this not be a huge disincentive to starting a business rather than remaining an employee? And if so, is that really what we need?
If this is true, does it not contradict your previous statement directly above? How will the regime know what your income is unless you have to file an income (level) form, much like the income tax form at present, to calculate its level? And if you do, don’t you still have all those same privacy-destroying, annoying record keeping headaches you have now with the income tax?
Another article by Jim Cox from LewRockwell.com
One more by Jim Cox for good measure:
UPDATE: Mark Thornton of the Mises Institute also posted these other articles at LPA activists yahoo group.
The Fair Tax Fraud – Mises Institute
There is No Such Thing as a Fair Tax – Mises Institute
Mises Economics Blog: The FairTax Rally
The Fraudulent Tax – Mises Institute
Mises Economics Blog: The Fair Tax Fraud
Mises Economics Blog: There is No Such Thing as a Fair Tax
Mises Economics Blog: Libertarians for a National Sales Tax?
Mises Economics Blog: Comment on The FairTax Rally
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