Reasons Why the
Actually, I think most of these reasons apply to ANY form of income-based taxation (including the FLAT Income Tax).
1) It allows over 1/3 of all Americans to escape paying Federal taxes altogether, either because they don’t report earned income correctly or they hire tax accountants to help them jump through tax loopholes. And who pays an average of 30% higher taxes because of all this tax evasion; all us working saps who dutifully pay our Federal taxes!
It forces all Americans to shell out close to 20% in
totally wasted overhead just to maintain the system. Taxpayers pay
approximately $2.5 TRILLION in Federal taxes and tax compliance (tax preparers,
lawyers, time spent filing returns, etc). The U.S. Treasury collects
approximately $2.0 TRILLION in actual taxes. That’s $500 BILLION American
taxpayers pay that gain us absolutely NOTHING and adds not 1 cent to the
It GUARANTEES that Social Security and Medicare will
4) It in effect institutes the policy that illegal activities are TAX EXEMPT (same as charitable institutions). It is a fact that drug-dealers and other criminals DO NOT report their income. It is a fact that Federal taxes are only paid on reported income. Thus, it as a FACT that no taxes are collected off criminal activities. Sounds like tax exempt status to me.
It inflates the prices of ALL goods and services sold
6) It institutes the unjustness of confiscating money directly from our paycheck and then forcing us to spend time and money to try and get a little of our own money back.
7) It effectively hides government taxation rates. No American knows how much tax they pay the Federal government. How could we? There are Federal Income Taxes, FICA Taxes, significant but hard-to-identify Corporate Taxes in everything we buy and compliance costs out the ‘wazoo’. When the Federal Government wants more it can tweak any of dozens of tax ‘buckets’ and we don’t even notice.
8) It severely punishes Americans at the lower economic levels, in effect establishing a serfdom tax to keep them ‘down’. The ONLY income-based tax that is in the least progressive is the Individual Income Tax, which accounts for 36% of our tax bill. FICA (Social Security and Medicare) taxes are paid at the same rate up to $92,000/year, at which point that rate goes DOWN. American consumers pay 100% of ALL Corporate Income Taxes as part of the price of everything we buy, and we all agree that the poorer you are the higher percentage of your income has to go to buying essentials.
9) It is in direct opposition to the wishes of our Founding Fathers. Direct Federal taxation was expressly forbidden in The Constitution. In 1913, the Congress misled the American people into ratifying the 16th Amendment, which was in effect a blank check for Federal spending and abuse.
10) It puts American business at a severe disadvantage regarding foreign competition. Their products always cost more to produce (due to taxes). They focus tremendous energies on TAX decisions rather than BUSINESS decisions. The hypocrisy of crying about a ‘level playing field’ is incredible when our Government systematically tilts the ‘field’ against American business via the Tax Code.
The leading candidate proposal for completely REPLACING the Federal Tax System is the Fair Tax, introduced in the House of Representatives as HR25. Opponents (mostly politicians, tax lobbyists and criminals) are scared to death of it and will lie about it all day.
The Fair Tax WILL
1. Get America back more in line with the ideals the Constitution originally laid out; that taxes should be levied against voluntary expenditures that any citizen makes by his or her own choices.
2. Directly address the negative consequences Americans have had to endure as a result of Income Taxes.
First let’s define the TWO (2) general rules that make up the entire proposal (to replace 60,000 pages of Tax Code). And I urge anyone who thinks I’m misrepresenting these TWO (2) rules to find in HR25 where I am wrong and please let me know.
Rule 1: 23% of the cost of all new, retail products and services will go to the U.S. Treasury as a National Retail Sales Tax. What is NOT considered a retail purchase? Used items, businesses expenses, investment expenses, educational expenses and basically anything not CONSUMED by an individual consumer.
The main impact of this aspect of the FairTax is that YOU decide through your own choices when you pay Federal taxes, rather than the IRS confiscating 20 – 30% of your paycheck as under the current system. And everyone who decides to consume at the retail level pays this tax, whether they are poor or wealthy, an illegal alien, or a criminal.
Rule 2: The fair tax is FAR more progressive than the current system because every American is in effect forgiven the first 100% of all sales tax attributed to poverty-level spending. Simple math guarantees that effective tax rates that now range from 15% to 35% will FALL DRAMATICALLY into a 0% to 23% range. Every American is treated the same. No loopholes, no special tax breaks.
No American would pay a dime in Federal taxes for the ‘privilege’ of maintaining a poverty-level lifestyle. That should be considered IMMORAL. To live the American Dream is voluntary; we should pay our taxes on that choice. To live at poverty-level should NEVER be considered the American Dream; we should not tax those unfortunates.
See Income Tax Evils to see why The FairTax is so desperately needed to address the inefficient stupidity of the U.S. Income Tax Code.