There's something about the phrase "fair tax" that
sounds mighty like an oxymoron to me, since I am not sure who
I worked 41 years under the IRS system and I didn't like it
any more than the rest of you working people do. Every
year the forms got more and more complex. Finally, the
last year I was required to report taxes (the last year I had
work-generated income) was 1997 and around March, 1998, I had a
professional preparer do my taxes.
My income is solely from Social Security. Medicare
takes $50 a month, and I belong to a Medicare HMO with
prescription benefits. Every year, the HMO costs rise more
than the amount by which my Social Security goes up. I
believe this is called negative income growth, but it might be
merely reduced purchasing power. At the same time, we have
soaring inflation in the necessity areas of food, energy and
Since I no longer pay income taxes, the IRS is of no concern
to me other than as a matter of principle. In 1973, I
filed a peculiar but honest income tax return. I also
pulled an audit by the IRS. All the records and
explanations were there. The IRS sent me a letter saying
the matter was closed and that is the last I heard from them.
Taking home every cent you earn in your paycheck sounds like
a magnificent plan. Some call it Fair Tax or True Tax
Reform. It is founded upon two pillars: first, get
rid of the IRS and the embedded (hidden) taxes we pay on goods
and services to support them. Second, all taxes would be
obtained through a national sales tax and go directly to the
United States Treasury, a tax that seems to vary in percentage
from one proponent's article to another. The theory is
that taxes are paid by those who consume the goods and services,
much like the gasoline tax is used to build the roads traveled
on by gasoline-powered vehicles.
The reports I have read indicate that goods have a 22%
embedded tax to cover the cost of upkeep of the IRS. It
would appear that this is the "ad valorem" tax that is
attached to goods as they move from raw material to finished
products, thus acquiring an added value as they progress to the
final stage of readiness for market. Vendors supposedly
would reduce their prices if this tax were removed because there
would be no IRS under the Fair Tax system. Frankly, I have
my doubts. It is my experience that vendors reduce prices
not because they get a tax break or any other form of reduction
that would increase their own profitability. Vendors
reduce prices solely because of competition!
Believe me, I am no advocate of the IRS. Neither am I
an advocate of a "fair tax" that isn't as fair as it
appears to be, or would entail a different type of government
For instance, those of us who are on Social Security and
whose total incomes are under $25,000 a year (and I'm way
under!) pay no income taxes at all. Under the "fair
tax" program one of two things would occur: either we
would suddenly have a 22% tax on the basic necessities of life
that we don't have now, or those of us who are below a
certain level of income would be exempt from the national sales
tax (would this require a new government agency or expansion of
an existing one to give us a "Pauper's Card")?
Thank you, I prefer to have a modicum of dignity even in an
impecunious state caused by pre-retirement age disability!
And I can't have 22% national sales tax added to my basics such
as food, utilities, medicines, or even my internet connection,
which is my major contact with the outside world. My spine
may be fractured, but thus far my brain is not.
Would all Social Security recipients be given a tax-exempt
card for basic necessities? That wouldn't be too bad an
idea if the nation were to go to a "fair tax" program
involving a national sales tax. Those who draw Social
Security and have investment income, trust fund income,
dividends, or rents would be higher consumers of goods and
services and thus incur taxes on far more than just basic needs.
But if we go to a Pauper's Card, expect some discrimination
lawsuits based on about 30 things I can think of right now,
especially from those who also play the race card.
The reason the IRS is in a mess is because the
representatives we, the people, elected to represent us did a
poor job of protecting our interests. Some, indeed, have
such an agenda for big government that the IRS is a very handy
tool for them. This makes rebellion against the IRS
understandable, particularly since there is controversy over the
legality of the 16th amendment and whether it was ever
However, as long as government exists, there will be
corruption somewhere. What starts out to be a specific
percentage national sales tax, whether 1% or 22%, doesn't need
to stop at that rate if our representatives decide to raise it.
And if they raise it, as they have raised income taxes in the
past, what do the people in general have as a defense?
Complaining? Revolution? Something in between?
Voting the bums out doesn't seem to have worked ... new bums
came in to replace them.
Another way to get rid of the IRS is if we elect a slew of
Greenies who would take everyone's money ... each and every cent
of it ... and pay each and every one of us a government stipend
of say $50,000 a year regardless of whether we work or loaf.
We would have rapid "progress" to: no taxes, no IRS,
no vote, no freedom.
Maybe the best place to start tax reform is just to let
President Bush get his tax cut passed. More spendable
income will be spent on goods and services, stimulating the
economy. And the cry will go forth that it benefits the
wealthiest one percent. (SIGH)
Now ... explain once more why "fair tax" isn't an
Ourselves: A Citizen's Guide to the Great Debate over Tax Reform
by Joel Slemrod, Jon M. Bakija
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A Force More Powerful: A
Century of Nonviolent Conflict
by Peter Ackerman, Jack DuVall
Atlas Shrug? The Economic Consequences of Taxing the Rich
by Joel Slemrod
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The IRS v. The People
by Jack Kemp (Editor), Ken Blackwell (Editor), Rush Limbaugh
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