The Most Un-fair Tax vs. the Best Tax
The word fair when used in the ‘Fair Tax’ is truly an autoantonym or a contronym, i.e. the exact opposite of the meaning you would expect for the word ‘fair.’ Why? It is really very simple when you actually think about it.
In a Fair Tax (consumption tax) system poor and middle class folks will continue having to ‘spend’ all or most of their incomes for necessities to get by paying ‘consumption’ taxes in doing so. The same consumption taxes for necessities spent by the better off to extremely wealthy would represent a very disproportionately low percentage of their overall income going to taxes, all the rest of their money being tax free for investments. Sweet for them.
So if you are better off to extremely wealthy naturally seeking the least percentage of your income going to taxes, and really don’t give a hoot about ‘fairness’ or your fellow man’s possible plight, this so-called ‘fair’ tax is your kind of deal.
THE FAIR TAX PITCH
The pitch for a fair tax is that it would become our one and only means of taxation. Because it would replace all other taxes as well as replacing the much hated exemptions that feed the wealthy and most unfairly allows crony mega sized international profitable companies such as GE and Amazon to not pay any taxes at all and some profitable companies can pay even less than 0% from time to time, believe it or not.
Fortune magazine’s Eric Sherman’s article April 11, 2019 ‘How These Fortune 500 Companies (Legally) Paid $0 In Taxes Last Year’ reported: “Of the Fortune 500 companies that have already filed their 2018 taxes, 60 were profitable and yet avoided all federal income tax, according to an ITEP analysis released on Thursday. The total U.S. income of the 60—which ITEP reports included such names as Amazon, Chevron, General Motors, Delta, Halliburton, and IBM—was more than $79 billion and the effective tax rate was -5%. On the average, they got tax refunds.
“In a previous ITEF study of 258 Fortune 500 companies that were profitable in every year from 2008 to 2015, 18 of them paid no federal income tax in any of those years. According to ITEP, 2018 saw the second-largest corporate income tax reduction, with only 2009 showing a bigger fall.”
So as good salesmen should, the promoters of the Fair Tax launch into a litany of what is rightfully to be criticized and damned: The long list of ‘They Never Saw A Tax They Didn’t Like And Couldn’t Justify,‘ and everything you ever heard of in tax escaping loopholes and more. So after the proper set up of generating all that bad taste in your mouth, the simple presentation of a one and only consumption (sales) tax replacing everything else sounds beyond palatable to sounding absolutely delicious. ‘Simplicity’…. just for us in La La Land. However, to realist, it really is most unfair and we must think hard about that big sedative pill we are being asked to swallow. See: ‘20 Big Fair Tax Pros and Cons’
Everything financial really is all about one word. Percentages. Again, this sales tax system based on consumption called the Fair Fax truly is atrociously unfair to those that must spend most everything they make on consumption and the wealthy do not.
To my point about percentages, one of my heroes, Thomas Sowell, in his book ‘The Vision of the Anointed,’ states:
“Contrary to the notion that deficits have reduced tax receipts by the federal government, those receipts in fact reached new record highs during the Reagan administration. Every year of that administration saw the federal government collect more money than in any year of any previous administration in history. By the last year the Reagan administration in 1988, the federal government collected over 391 billion more than during any year of the Carter administration – in percentage terms, the government took in 76% more that year than it had ever collected in any year of any other administration. The idea that tax cuts -for the rich or otherwise – were responsible for the deficit flies in the face of these easily obtainable statistics. Spending increases simply outstripped the rising volume of tax receipts, even though hundreds of billions of dollars more were pouring into Washington than ever before. Of course there is no amount of money that cannot be overspent.
“As for ‘the rich,’ even if we accept the popular definition of them as people currently above some given income level, those in the top income brackets paid larger sums of money after the Reagan tax rate cuts than before. They even paid a higher percentage of all the taxes paid in the country, according to a report of the House Ways and Means Committee, controlled by Democrats. What bothered the liberals was that “the rich” paid a smaller percentage of their rising incomes than before. But whatever the metaphysics of ‘fairness,’ revisionist history can be checked against hard data – and it fails that test.”
TOWARD A BEST WORLD – THE BEST TAX
THE SINGLE RATE FLAT INCOME TAX IS REAL FAIRNESS
I am a big fan of what I consider to be the most absolute fair tax there could be. In a perfect world, a single rate, flat income tax with no deductions, no exemptions, and sorry, not even non-profits escape it, PERIOD!!! Everybody pays and pays the same percentage, eliminating manipulation to lower levels and possible tax havens because after all everyone benefits from what those taxes should be used for. The operative word there is the word ‘should.’ Our government should not be paying for way too much that is uncalled for in our Constitution!
Reportedly, a Tennessee farmer named Horatio Bunce schooled the legendary David ‘Davey’ Crockett when Crockett was serving as a U.S. Representative, during a chance meeting, “The power of collecting and disbursing money at pleasure is the most dangerous power that can be entrusted to man. The people have delegated to Congress, by the Constitution, the power to do certain things. To do these, it is authorized to collect and pay moneys, and for nothing else. Everything beyond this is usurpation, and a violation of the Constitution.” – Read Article I, Section 8 of our U.S. Constitution.
COMPLEXITIES AND MANIPULATION
The reason for the single rate is to eliminate the seed of manipulation by both politicians and tax payers which has heretofore sprouted and produced the growth of our tax system like a giant growth of jungle in a rich atmosphere of the right soil, likened to our successful capitalist system, watered by the hunger of freedom and too richly fertilized from machinations and spreading of more seeds by politicians with abject power constantly contriving heartfelt expressed reasons to subsidize, micro-manage markets, manipulate money, create crony schemes, contrive complex programs with nefarious agendas, guarantees and minimum wages, with no end to legal plunder. This ability by Congress to manipulate and establish manipulation must end if we are to ever right our ship of a free capitalist system run by the laws of our wonderful Constitution. Also, matters run most smoothly when they run most simply.
Carly Fiorina said on Fox News Sunday, 11-29-2015 that “The complexity of our government’s 73,000 page tax code favors the big, the powerful, the wealthy, and the well connected. It’s called crony capitalism. Republicans have engaged in it as well as Democrats. The reason it never gets reformed is because everybody’s ox is going to get gored. Every politician, every lobbyist, every accountant, every lawyer. If you level the playing field by simplifying the tax code then you help the small, the powerless and the middleclass.” Mrs. Fiorina said that her fundamental design philosophy is to lower every rate and close every loophole.
Of course, after drastically sweeping away all that manipulation, a new single rate flat tax percentage will have to be way too high since about all promoters of the flat tax advocate that many people won’t pay anything if they are below a specified income level. Do you suppose they have an interest in that voting bloc’s support at the polls? Manipulation again. And if not a single rate, but multiple rates, there we go again into manipulation. The bottom line is we all use and we all should pay equally which a single rate flat tax accomplishes.
Now bear in mind, that gone would be all the federal consumption taxes like Gasoline, Inheritance, Cigarette, Insurance Premium, Alcoholic Beverage, Luxury, Blueberry (believe it or not), CDL License, Compressed Natural Gas, Ammunition, Aircraft Jet Fuel, Aircraft Excise, Medicare, and the list seems endless.
A CASE IN POINT: 20 mostly Baltic nations, including Russia, after the breakup of the former Soviet Union all went to the Flat Tax system with great enthusiasm originally and I remember reading that poor people liked paying their fair share and liked particularly that they were paying the same percentage as millionaires. The success of these nations various rates has had mixed results since 1981, most largely because politics once again interceded into the original concepts, subsequently some countries today are adding additional taxes on their way to going backwards. See: ‘A Brief Guide to the Flat Tax’ and ‘Countries or Jurisdictions with a Flat Tax as of March 2015.’
OUR NEED FOR ENLIGHTENMENT
I believe that caring Americans would enthusiastically get behind the right effort once they understand the facts and means to an end. The problem is, how we inform them, with the treasonous, socialist media doing all they can to not support such endeavors while actually “denying liberal bias, brushing off viewers and painting their detractors as wild-eyed ideologues?” – As Bernard Goldberg states in his book ‘Arrogance, Rescuing America from the Media Elite.
Monumental insight and courage need to find pathways to Americans’ hearts where their noble insights and motives can reign again. Citizens need to awaken to the need to study the Constitution, the issues, inform others and cull and replace violators of our Constitution with real patriots. Then eliminate whole bureaucracies, agencies and millions of overpaid unnecessary government workers. Their removal and the subsequent removal of most of the strangling regulations with which these government mills have been choking the life out of our commerce will stimulate our economy like never before, creating real jobs for the former government workers and former tax accountants. This is not folly but fact. The only matters holding back our job hiring commerce today are strangulating taxes and regulations. Nothing else.
We can continue down this road of insane unconstitutional manipulative taxation and regulative socialism until we are busted just like the Roman Empire as sure as all businesses have to close their doors when profitability is gone. Or we can smell the coffee and right our ship. This is not a party thing. It is a Constitution thing and a patriotic thing!
Once again, I must state that I believe the most heinous of crimes is the violation of the public trust and the violation of the sacred oath to our Constitution that all elected officials make. They are elected to follow the Constitution, for their states and their citizens, not lobbyists for special interests.
‘THE LAW’ Quoting Frederic Bastiat from his book ‘The Law’: “Legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole — with their common aim of legal plunder — constitute socialism.
“No legal plunder: This is the principle of justice, peace, order, stability, harmony, and logic. Until the day of my death, I shall proclaim this principle with all the force of my lungs (which alas! is all too inadequate).” Try to imagine a regulation of labor imposed by force that is not a violation of liberty; a transfer of wealth imposed by force that is not a violation of property. If you cannot reconcile these contradictions, then you must conclude that the law cannot organize labor and industry without organizing injustice.
“Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.
“If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?
“It seems to me that this is theoretically right, for whatever the question under discussion — whether religious, philosophical, political, or economic; whether it concerns prosperity, morality, equality, right, justice, progress, responsibility, cooperation, property, labor, trade, capital, wages, taxes, population, finance, or government — at whatever point on the scientific horizon I begin my researches, I invariably reach this one conclusion: The solution to the problems of human relationships is to be found in liberty.” – Unquote from Frederic Bastiat
AMERICA MUST BE RESTORED
To restore America back in line with the original tenets of our Constitution we must first accept one absolute fact. Socialism fails and capitalism succeeds. Simple as that.
The late, not so great Soviet Union’s socialist citizens experienced a life of guarantees for all the necessities of life, meager as it was: Education, Home (make that apartment,) Job, Medical Care & Retirement. Literally everything was decided on and taken care of by government. Missing, however, was one basic ingredient to make it all work.
Work. Work that would have provided the money that would have come from taxes had Government Controls not squashed the environment for entrepreneurs and investors to thrive. Government magic was an illusion.
What has made America run is vibrant business in the free marketplace of a capitalist system. Productivity and its subsequent profit are absolutely necessary for our success as a nation.
True freedom is pure capitalism. Capitalism is the freedom to win at starting a business or investment and cannot and must not provide ‘subsidized’ guarantees for those that attain less. Failure is a lesson learned well and one moves on, strengthened from the experience. One can strive to achieve all he wants or adjust to what levels of accomplishment he attains. Businesses accountably making a profit, subsequently creating commerce and providing jobs are the root sources of all governments’ funding. A growing economy that creates more tax paying employees will bring in more revenue than higher tax rates and new taxes which conversely hurt us.