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By Dorothy Anne Seese


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There's something about the phrase "fair tax" that sounds mighty like an oxymoron to me, since I am not sure who defines "fair."

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 medicines.

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 control.

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.

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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 appropriately ratified.

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 oxymoron?

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Dorothy Anne Seese, 2001, All rights reserved.

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