U.S. Tax Code: BROKEN – Time for the Fair Tax!

High Time for the Fair Tax:  Keep Your Entire Paycheck!

 – Everyone Pays His or Her Fair Share
 – Pay Tax Only on What You Spend
 – The IRS is No Longer Necessary

 

Before we examine what is meant by “Fair Tax,” let’s first take a look at why it’s necessary, as well as how it would greatly benefit our nation:

Acording to National Taxpayer Advocate Nina Olsen, “The U.S. Tax System’s most serious problem is the 4-million-word code’s excessive complexity that makes it tough for taxpayers to comply with and difficult for the government to administer.” – Source.

The cost to both individuals and corporations is immense:  $168 Billion in 2010.  Most individuals aren’t equipped to handle it, and many opt out, falling off the grid, or worse, winding up behind bars.  Corporations divert a large chunk of their profits to minimize their tax liability, even to the point of reorganizing themselves around the tax code instead of focusing on productivity.

Our tax code has grown way beyond a leash or muzzle.  It’s become a ball and chain, so much so that most corporations have expanded operations into other countries simply because it’s far cheaper.  Those countries benefit, while Americans lose.

Taxes are are necessary to pay for services common to the community as a whole.  When the burden of taxes becomes too great, however, they are a disservice to the community as a whole.  Then the act of merely calculating the right amount of tax becomes so complicated that it costs a significant portion of a corporation’s or individual net income, the system is broken.  It has become a “parasitic expense,” one that doesn’t contribute anything towards increasing productivity or revenue, or even the welfare of the community as a whole, but instead merely sucks the life blood out of human effort.

Our Constitution mentions the word “tax” six times, four of which are relevant to the Fair Tax concept:

  1. “Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers…” – Article I, Section 2
  2. “The Congress shall have Power To lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States…” – Article I, Section 8
  3. “No Capitation, or other direct Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.” – Article I, Section 9
  4. “No Tax or Duty shall be laid on Articles exported from any State.” – Article I, Section 9.

If you thoroughly examine each provision in the Constitution against what is happening today, you’ll see that personal income tax is NOT Constitutional, regardless of how the Supreme Court twisted their ruling to make it sound otherwise.

If you examine how much people and corporations are actually taxes (net effective), you see there’s plenty of room for the Fair Tax to replace all other taxes and provide the same measure of income to the federal government.

If you consider the cost of implementing the current tax code, you’ll find that the IRS budget of $11.8 billion alone is a mere drop in the bucket compared to how much money people and businesses spend on handing taxes.  When you realize the entire tax industry is parasitic, that is, it doesn’t actually generate wealth at all, but merely shifts it one segment of society to the other, you’ll realize it isn’t healthy at all.  It boils down to a protection racket.  Pay tax people to keep you out of trouble, when the real issue involves such a grossly over-complicated tax code in the first place.

If you examine the federal budget for other parasitic, non-wealth-building waste, you’ll find at least one third of the federal government’s $3.504 trillion is parasitic in nature.  That is, it does little, and adds nothing to the overall health or wealth of our nation.

If we ever did implement the Fair Tax, a mandatory cap would be required.  That’s necessary, given the Congressional tendency to add “just another half a percent…”  Well, that’s 10% in 20 years, so how about a big fat NO and a max at 10%.  If they can’t make do with 10%, they’re not doing their job.  Fire them and give someone else a chance.

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