Thursday, January 22, 2009
The People Who Count Approve
Fidel Castro has announced that he believes in Barack Obama. He likes Obama's ideas and hopes that the new president carries them out. I'm really glad, because if there's anyone who I want to see approve of my president's ideas, it's a brutal socialist dictator who locks dissidents in jail and whose people only have running water a day or two every week.
Wednesday, January 21, 2009
Let's All Just Get Along for this Hopeful Time of Change
Israel, showing a degree of graciousness I greatly admire (and most people in their situation wouldn't show), has agreed to a ceasefire with Hamas and withdrawn all troops from Gaza. They want to give President Obama peace to start working with. That is truly amazing of them; most other countries (including ours), when faced with an enemy that swears to exterminate every man, woman, and child, would not agree to peace just so another country's leader was a breaking-in period.
It won't last a week.
Hamas has never, ever honored an Israeli ceasefire. In fact, historically, when Israel offers peace, Hamas (or Hezbollah, or any other Palestinian terrorist group) has mocked what they see as weakness by hitting harder. If Israel attacks the terrorists who murder their civilians, the terrorists hit back because Israel is a vicious racist state. If Israel concedes to the terrorists, they still hit back because Israel is weak and can be bullied.
And the disgusting part of it is the blowhards in this country and many others who insist that Israel is a racist, imperialist, apartheid state. Take Annie Lennox, who saw, "as a mother," the "nightmarish sights" of Gaza neighborhoods burning under Israeli strikes. Apparently she didn't notice "as a mother" that for three months prior, Israeli neighborhoods had been burning under Hamas rocket attacks, and thus couldn't possibly appreciate that most people, faced with constant bombardment for three months (during a ceasefire agreement), would have long since commenced a full-scale war.
So while I admire Israel's magnanimity more than I can really say, I don't believe it will work. You cannot reason with an enemy that swears to "strangle the last Jew with the entrails of the last Zionist." You can't win them over with kindness. And Americans need to realize that and stop condemning the IDF's efforts to protect the innocent civilians of Israel.
It won't last a week.
Hamas has never, ever honored an Israeli ceasefire. In fact, historically, when Israel offers peace, Hamas (or Hezbollah, or any other Palestinian terrorist group) has mocked what they see as weakness by hitting harder. If Israel attacks the terrorists who murder their civilians, the terrorists hit back because Israel is a vicious racist state. If Israel concedes to the terrorists, they still hit back because Israel is weak and can be bullied.
And the disgusting part of it is the blowhards in this country and many others who insist that Israel is a racist, imperialist, apartheid state. Take Annie Lennox, who saw, "as a mother," the "nightmarish sights" of Gaza neighborhoods burning under Israeli strikes. Apparently she didn't notice "as a mother" that for three months prior, Israeli neighborhoods had been burning under Hamas rocket attacks, and thus couldn't possibly appreciate that most people, faced with constant bombardment for three months (during a ceasefire agreement), would have long since commenced a full-scale war.
So while I admire Israel's magnanimity more than I can really say, I don't believe it will work. You cannot reason with an enemy that swears to "strangle the last Jew with the entrails of the last Zionist." You can't win them over with kindness. And Americans need to realize that and stop condemning the IDF's efforts to protect the innocent civilians of Israel.
Because the IRS Isn't Screwed Up Enough
Let's put someone in charge of the Treasury who hires illegal immigrants and "forgot" to pay taxes for five years. After all, the most successful police departments are run by serial murderers.
Or not.
Why don't you try what this moron's done: don't pay your taxes for five years, then when the IRS shows up at your door tell them it was an honest mistake, you're sorry--now you want to run the whole department. But before you do that, make sure you get enough soap-on-a-rope for about ten years, so Bubba gets as few opportunities as possible.
The Senate weasels are saying we have to confirm Geithner now, it's a crisis and we don't have time to find a qualified candidate that isn't also a felon. What a load of crap. Because it is a crisis, we shouldn't hurry up and pick someone, we should make absolutely sure we have the best person for the job. And the best person to run the freaking IRS should probably be somebody who pays their taxes. Just a thought.
Or not.
Why don't you try what this moron's done: don't pay your taxes for five years, then when the IRS shows up at your door tell them it was an honest mistake, you're sorry--now you want to run the whole department. But before you do that, make sure you get enough soap-on-a-rope for about ten years, so Bubba gets as few opportunities as possible.
The Senate weasels are saying we have to confirm Geithner now, it's a crisis and we don't have time to find a qualified candidate that isn't also a felon. What a load of crap. Because it is a crisis, we shouldn't hurry up and pick someone, we should make absolutely sure we have the best person for the job. And the best person to run the freaking IRS should probably be somebody who pays their taxes. Just a thought.
I'm So Glad Race Doesn't Matter Anymore
Yes, the historic inauguration of Barack Obama has finally proven that race is irrelevant. Or, you know, not.
Some jackass reporter on MSNBC, the day before the inauguration, was talking about how powerful Obama's speech at the Lincoln Memorial was. He said that the image of a black man speaking in front of the Lincoln Memorial was so unbelievably poignant. That's right, moron; any time a black person speaks at the Lincoln Memorial it's an echo of Martin Luther King. After all, all black men in positions of power are basically the same, right? Good God. That's pretty much the exact opposite of what Dr. King spoke about on the steps of the Lincoln Memorial. He envisioned a future where it wouldn't matter what skin tone the speaker had. If anyone stands on the steps of the Lincoln Memorial, and says something that affirms American values, cheer. But don't cheer for "the image of a black man on the steps of the Lincoln Memorial."
Then there was Reverend Lowery. Let's all pray for an America where "black won't be told to get back, brown can stick around, yellow can be mellow, the red man can get ahead, man, and white can finally embrace what's right." What a load of garbage. The fact that you're giving the closing prayer for new president Barack Obama pretty much shows that black isn't being told to get back. And what exactly do you mean "white can finally embrace what's right"? You think we're all riding around in our Klan hoods? News flash: it's not 1935 anymore. It's not 1965 anymore. To the overwhelming majority of the white who can't embrace right, race means nothing at all. You know who's keeping racial tension alive in this country? It's leaders like Jesse Jackson who have very lucrative careers based on claiming "minority victimhood." And they know as soon as they admit how much progress has been made, their tone of moral superiority and long suffering--and the millions they rake in with that image--is gone. And it's people like you, Reverend. What possible purpose could that statement have served, other than to divide and incite tension? I've got news for you: I don't give a crap what color Barack Obama, or anyone else, is. I care that every single one of Obama's policies goes against everything I believe, and that's why I didn't support him.
I worked on Election Day in a tiny precinct of under eight hundred people. At least four walked in and asked a poll worker what the black man's name is. They couldn't be bothered learning the man's name, let alone what he stood for. All they know is that he's black. And that's all that mattered to them. And I'm sure there were at least a few who knew Obama's name, and that he was black, but couldn't have told you anything else. I don't know a single person who voted against Obama just so a black man wouldn't get in the White House; I apparently met at least four who voted for him just so a black man would. That is quite possibly the most asinine thing I've ever heard of.
I know someone else who just named their child "Messiah Obama." Others in the public circle have described him as great Biblical figures ranging from Joshua to the Apostle Paul. Many more compare him to Kennedy, Lincoln, even Washington. Leave aside the obvious--Washington definitely did not think that "spreading the wealth around is good for everyone," Kennedy urged people to "ask not what your country can do for you"--has Barack Obama actually done anything yet? I mean, his speeches seem lofty and articulate, and you can compare his speeches to those of figures like Lincoln or Kennedy. But he's been president all of thirty-one hours. He has not accomplished anything yet, beyond getting elected! Shouldn't we wait to see if his accomplishments live up to JFK's or Lincoln's before we call him a new Lincoln? Aside from the fact that he's the first black president (or 44th white president, since he has an equal claim on that), he has not done anything significant yet! He hasn't even, as his supporters contend, united the country. His total number of votes was almost exactly the same as George Bush got in 2004, and that was hardly a unification of the country. If a white candidate with the same level of experience and accomplishments got elected, it would be a nail-biting experience as we wait to see if he's up to the job. But Obama gets elected, he's the next Lincoln, the next Washington, the Second Coming of Christ!
So don't tell me this proves race doesn't matter. Sadly, it does nothing of the sort. It doesn't matter to me. I voted against Obama because of his policies, not his skin tone, and despite disagreeing with him I wish him well and will pray for him daily. Unfortunately, many of his supporters, and certainly the race-baiting pastor he chose, seem hung up on the black president, not the President of the United States. And I'm sorry to see that.
Some jackass reporter on MSNBC, the day before the inauguration, was talking about how powerful Obama's speech at the Lincoln Memorial was. He said that the image of a black man speaking in front of the Lincoln Memorial was so unbelievably poignant. That's right, moron; any time a black person speaks at the Lincoln Memorial it's an echo of Martin Luther King. After all, all black men in positions of power are basically the same, right? Good God. That's pretty much the exact opposite of what Dr. King spoke about on the steps of the Lincoln Memorial. He envisioned a future where it wouldn't matter what skin tone the speaker had. If anyone stands on the steps of the Lincoln Memorial, and says something that affirms American values, cheer. But don't cheer for "the image of a black man on the steps of the Lincoln Memorial."
Then there was Reverend Lowery. Let's all pray for an America where "black won't be told to get back, brown can stick around, yellow can be mellow, the red man can get ahead, man, and white can finally embrace what's right." What a load of garbage. The fact that you're giving the closing prayer for new president Barack Obama pretty much shows that black isn't being told to get back. And what exactly do you mean "white can finally embrace what's right"? You think we're all riding around in our Klan hoods? News flash: it's not 1935 anymore. It's not 1965 anymore. To the overwhelming majority of the white who can't embrace right, race means nothing at all. You know who's keeping racial tension alive in this country? It's leaders like Jesse Jackson who have very lucrative careers based on claiming "minority victimhood." And they know as soon as they admit how much progress has been made, their tone of moral superiority and long suffering--and the millions they rake in with that image--is gone. And it's people like you, Reverend. What possible purpose could that statement have served, other than to divide and incite tension? I've got news for you: I don't give a crap what color Barack Obama, or anyone else, is. I care that every single one of Obama's policies goes against everything I believe, and that's why I didn't support him.
I worked on Election Day in a tiny precinct of under eight hundred people. At least four walked in and asked a poll worker what the black man's name is. They couldn't be bothered learning the man's name, let alone what he stood for. All they know is that he's black. And that's all that mattered to them. And I'm sure there were at least a few who knew Obama's name, and that he was black, but couldn't have told you anything else. I don't know a single person who voted against Obama just so a black man wouldn't get in the White House; I apparently met at least four who voted for him just so a black man would. That is quite possibly the most asinine thing I've ever heard of.
I know someone else who just named their child "Messiah Obama." Others in the public circle have described him as great Biblical figures ranging from Joshua to the Apostle Paul. Many more compare him to Kennedy, Lincoln, even Washington. Leave aside the obvious--Washington definitely did not think that "spreading the wealth around is good for everyone," Kennedy urged people to "ask not what your country can do for you"--has Barack Obama actually done anything yet? I mean, his speeches seem lofty and articulate, and you can compare his speeches to those of figures like Lincoln or Kennedy. But he's been president all of thirty-one hours. He has not accomplished anything yet, beyond getting elected! Shouldn't we wait to see if his accomplishments live up to JFK's or Lincoln's before we call him a new Lincoln? Aside from the fact that he's the first black president (or 44th white president, since he has an equal claim on that), he has not done anything significant yet! He hasn't even, as his supporters contend, united the country. His total number of votes was almost exactly the same as George Bush got in 2004, and that was hardly a unification of the country. If a white candidate with the same level of experience and accomplishments got elected, it would be a nail-biting experience as we wait to see if he's up to the job. But Obama gets elected, he's the next Lincoln, the next Washington, the Second Coming of Christ!
So don't tell me this proves race doesn't matter. Sadly, it does nothing of the sort. It doesn't matter to me. I voted against Obama because of his policies, not his skin tone, and despite disagreeing with him I wish him well and will pray for him daily. Unfortunately, many of his supporters, and certainly the race-baiting pastor he chose, seem hung up on the black president, not the President of the United States. And I'm sorry to see that.
An Epic Win for Freedom
We understand that the government has always had eminent domain powers. In very limited circumstances, they can confiscate private property for public use. The stupid American people thought public use meant roads, hospitals, etc. Not so. A town in Connecticut decided that the increased tax revenue from, say, a shiny new 5-star hotel, constitutes public use. It seized the land of dozens of homeowners--who had refused to sell their land to the hotel developer--and gave it to the hotel. The citizens didn't like that very much, so they took the town to court. Eventually they made it to the Supreme Kangaroo Court, which ruled 5-4 in favor of allowing the town to continue.
So not only can the government seize your land when an important road needs to be built, it can seize your land whenever some developer wants to build there and you don't want to move.
Where's the win? Several months after the ruling was passed, Logan Darrow Clemens, a businessman from California, filed a petition to build a hotel on the property of Supreme Court Justice David Souter, who ruled in favor of the government. He's planning on calling it Lost Liberty Hotel, with the Just Desserts Cafe and a museum dedicated to the erosion of freedom and expansion of federal power. That's a freaking American hero right there. The government starts eroding your rights, you use their own harmful laws to spit in their face. And it's a win-win situation. Either the hotel goes through, in which case he's made his statement; or it doesn't, and he's got an equal-protection appeal. Absolutely genius.
So not only can the government seize your land when an important road needs to be built, it can seize your land whenever some developer wants to build there and you don't want to move.
Where's the win? Several months after the ruling was passed, Logan Darrow Clemens, a businessman from California, filed a petition to build a hotel on the property of Supreme Court Justice David Souter, who ruled in favor of the government. He's planning on calling it Lost Liberty Hotel, with the Just Desserts Cafe and a museum dedicated to the erosion of freedom and expansion of federal power. That's a freaking American hero right there. The government starts eroding your rights, you use their own harmful laws to spit in their face. And it's a win-win situation. Either the hotel goes through, in which case he's made his statement; or it doesn't, and he's got an equal-protection appeal. Absolutely genius.
A Change We Really Need
There's a bill that's been kicked around the House for about ten years. It's only got about 50 cosponsors so far. which is a far cry from the 220 it needs to pass. A lot of people don't know about this bill, and a lot of the people who have heard of it have been misinformed. What's bad about that is that this may be the single most important bill of at least the least forty years--H.R. 1025, the FairTax Act.
I don't know how much you've heard about the FairTax, but I'm going to start from the assumption that you know nothing, because it's easiest to explain from the bottom up. Currently, embedded in the price of everything you buy, is a federal tax. You don't know this, because the federal government doesn't tax your purchases directly. However, it taxes the capital and payroll of every entity involved in the production of whatever it is you're buying. Those entities factor those taxes into the price of the goods they're selling--so, whenever you buy something, 22 percent of the price goes to pay federal taxes. The FairTax would completely eliminate all federal income, payroll, capital, and estate taxes. It would replace them with a national 23% sales tax, to be embedded in the price exactly like the embedded taxes now. The tax on your purchases would not increase (well, by 1% of the total price, but not by any significant measure), but the taxes on your paycheck would disappear, leaving more money in your pocket.
Sound too good to be true? It's not. Everybody wins.
Under the current tax code, while the poor are exempt from income taxes--and many actually get refunds on the income taxes they don't pay--those poor with jobs are still hit with payroll taxes, often as high as income taxes. The FairTax eliminates that. Any potential changes in the price of goods won't significantly affect the poor either. See, part of the FairTax Act includes a provision that a credit be granted to every American--regardless of income--up to the poverty line for their family size. For example, a family of four is calculated to need about $2,000 a month to afford basic necessities like food and clothing (not designer clothing, mind you, but enough so that the kids aren't naked in the street). Under the FairTax, that family of four would receive almost $500 a month--enough to cover the tax on their basic necessities. If you buy beyond what you basically need, you will be taxed--if not, you won't. (And I don't care how poor you are, if you can buy the iPod you can pay the tax on it.)
Americans who make enough money to be hit with income taxes--most of whom also pay punitively high payroll taxes--will have all of their income available. Next time you get paid, pay close attention to how much the government took out for Medicare, Social Security, and income tax. Imagine what you could do with that extra money. I know for me, federal taxes typically run about $80 a month (during school when I'm part-time) and $150 (over the summer). If the FairTax passes, I could take that $80 and spend it, and the feds still get their hands on it; I could invest it; I could put it toward retirement or grad school. It's a lot harder to invest and save when the feds confiscate a quarter of your income right off the bat.
The current tax code punishes the wealthy. While a few people are wealthy for no reason, most of them got there by hard work. In the process, they created millions of jobs. Say you've got a CEO who makes $20 million. His lowest-paid employee makes $20,000. You can scream that it's not fair the CEO makes 1,000 times as much as the lowest-paid employee...or you can see it as, if that CEO weren't operating this company, the job wouldn't be there and the lowest-paid employee (and a few hundred similarly paid employess) would be making nothing at all (which last I checked would be a bad thing). But under the current tax code, those successful, job-creating wealthy people are being punished for their success. The income tax rate for people who make over $197,000 per year is 38%. On top of that, they have payroll tax (another 8%), capital gains taxes (about 35% of the company's capital)...and they're now being threatened with another tax hike from the Obama administration. Put yourself in those (ridiculously expensive Italian) shoes. If the government already confiscates half your income and a third of your company's capital, and then the incoming vice-president says if you don't give more you're not patriotic...well, Ireland's 12% capital tax is starting to look mighty attractive, isn't it? And when the wealthy move their assets to other places with lower taxes, who loses? The millions of people who work in jobs the government just taxed into relocation. By punishing the wealthy, you eventually punish the poor...and why, exactly, should success be punished in the first place?
I mentioned Ireland. When the rest of Europe was taxing businesses at a rate between 40 and 50%, Ireland slashed their capital tax to 12. Ireland now has the fastest-growing economy in Europe and one of the fastest in the world. It's cheaper to do business there, so more businesses go. If Ireland's economy exploded from dropping capital taxes to 12, what would happen if America cut them to 0? An economic explosion unlike any seen since the Industrial Revolution. And isn't this the best time for it? If unemployment is at its highest in decades, and the economy is in worse shape than it's been since the Great Depression, wouldn't this be an absolutely great time for unprecedented economic expansion?
The FairTax would not reduce the government's revenue. It would, in fact, increase it. Think about it. Every year, millions of tourists come here from other countries. Their income, of course, is made in their home country, and we can't tax them for it here. But they do spend here. And if the feds collected taxes on everything foreign visitors purchased, their revenue would spike sharply. Then there's the underground economy. People who make money illegally--drug dealers, prostitutes, illegal immigrants, etc.--obviously don't report their incomes at all. Then there are people--like waiters or strippers--who make most of their money in cash tips and can easily underreport by thousands of dollars their actual income. All of those people can escape the income tax. But since they spend their money on the free market, they cannot avoid the FairTax. A drug dealer doesn't report their income--but they pay for everything from bread to cars just like everyone else (well, almost--very few other people walk into a car lot with rolls of $20 bills), and even if they make money illegally the FairTax will collect their share. Another thing to consider is that the estimated cost every year of Americans trying to comply with the tax code (at last count over 47,000 pages long) is over $400 billion--spent on everything from individuals going to H&R Block to corporations hiring tax lawyers to double-check the books. Think how much good that money could do in the market. This country could do a lot with an extra $400 billion.
The FairTax is simple. There's no 47,000 pages to remember. H.R. 1025 is only 133 pages long. You want an honest assessment of how complex the tax code is? IRS bureaucrats tested their employees by calling their own support line with a serious question. In over 60% of the cases, the IRS support employee answered wrongly or said some variation of "I don't know, let me get a supervisor." Can you imagine if 60% of police officers couldn't answer a question about traffic laws?
The FairTax will help secure the border. See, the prebate credit--the one that covers taxes on poverty-level spending--can only be sent to people who are registered as citizens or legal guest workers. Illegal immigrants will still pay the FairTax, because they will still buy things. But they won't get a credit to cover their basic expenses. Guest workers, on the other hand, who come here legally, announce their presence, and may eventually become citizens, will pay the FairTax and receive the benefits of paying it. That alone will not stop illegal immigration--but it does make it harder for those who ignore our laws to make a living off our system.
Unlike the income tax, the FairTax's tax base is much mroe stable. See, income tax only hits income. The FairTax is based on spending. And spending comes not just from income but from savings and credit. When some catastrophic event--like 9/11 or Bailout Madness--wipes out a lot of income, spending takes a dip--but nowhere near as sharp as the one income takes, because people use their savings and credit to continue buying things. Tax records bear this out again and again.
Under the current system, America is one of the only countries that taxes goods produced in the country, rather than those sold in the country. This puts imports at a huge advantage. They have no real tax burden in their home country--which is smart enough not to tax exports--and because the goods were produced elsewhere, they have no real tax burden in America either. Our goods, on the other hand, are taxed here--then taxed again when they're sold in another country. Why on earth does anyone think it's a good idea to put our goods at a 20 to 40% disadvantage in the world market?
The FairTax has no deductions. That may sound bad, but here's why it's not. Tax deductions are never "free rides." They are intended to encourage or coerce people into doing what the government wants. And who comes up with tax deductions? K Street lobbyists hoping to game the system. Environmental lobby pressures a representative? Now there's a tax break for hybrids. (I don't know if there actually is, that's hypothetical.) Government wants to make sure your kids are under their direct supervision from the age of four (thanks to the horrendous system of compulsory government education)? Tax break for your children in government schools. Do you really want the government to be able to guide your behavior with tax credits? It's like leading a cat around with a catnip mouse; since cats don't respond well to commands or physical coercion, hold up a catnip mouse (or tax credit) and pull it one way or the other, and the cat will follow.
The current federal tax system encourages spending and discourages planning for the future. Investments and savings can be taxed. Spending cannot. The FairTax reverses that. You see the results of spending beyond your means everywhere. By not taxing savings and taxing spending significantly, the FairTax provides a benefit to responsibility (or, I should say, an immediate benefit to responsibility--responsiblity has always had long-term benefits). That's good for everyone. And before you accuse me of hypocrisy, it's not the same principle as the government promoting desired behavior with tax breaks. See, the FairTax doesn't punish spenders to encourage saving--the tax on purchased goods does not increase. The only change in the tax on goods is where it comes from. Right now, every business involved pays the taxes to the government--then you pay the business' share of the taxes, in addition to their materials and labor. Under the FairTax, you pay the government directly, which may seem like a tax hike--but you're already paying the taxes, you just don't see it. The FairTax doesn't tax spenders any more than the income tax (in fact, less, because you don't have taxes automatically withheld). It just stops taxing savers and investors. It's not a way for government to entice people to save, but a way to stop enticing people not to save. And that's good.
The FairTax also encourages people to become politically aware and active. That's a good thing. An apathetic, unaware populace--the dumb masses or sheeple--is easy pickings for power-hungry political hacks. (Even worse is an unaware populace that is nonetheless quite enthusiastic about something--witness the four people who came in my precinct on election day asking what the black man's name was, because they wanted to vote for him.) When you never get the money the government confiscates, it's hard to feel passionate about it. Be honest, even if you read the taxes on your pay stub, you normally think of your take-home pay as your salary. But when every time you buy something, it says on the receipt "23% FairTax....$4.98" or whatever, you start really feeling how much money is being taken by the government. And then you might get a little more upset when you hear about the forty-seventh public works project in West Virginia named after Robert Byrd and paid for with federal taxpayers' money (the count as of 2006 was over thirty, including the Robert C. Byrd Locks and Dam, the Byrd Aerospace Tech Center, the Robert C. Byrd Green Bank Telescope, the Robert C. Byrd Visitor Center at Harper's Ferry National Park, the Robert C. Byrd Federal Courthouse, the statue of Robert C. Byrd in said courthouse, the Robert C. Byrd Clinical Addition to the Veterans' Hospital, etc.).
I lied to you earlier. I said everybody wins. There is a group of people who lose. The lobbyists who want tax policy to coerce desired behavior. The politicians who use tax policy to exercise power over their constituents. The hacks like Robert C. Byrd who count on an apathetic people not to notice he's appropriated over $200 million of your money to name a bunch of crap after himself. The credit card companies who want you to spend money you don't have, so they can hold a sword over your head for decades. The drug lords who collect benefits like welfare and Medicaid without contributing a dime to the system. The foreign countries whose economies have been killing ours because of the simple fact that they understand you can't tax the successful into oblivion. Those are the only people who benefit from not implementing the FairTax. Do you want the political class and the illegal-income class to win? Or do you want the rest of America to win?
I don't know how much you've heard about the FairTax, but I'm going to start from the assumption that you know nothing, because it's easiest to explain from the bottom up. Currently, embedded in the price of everything you buy, is a federal tax. You don't know this, because the federal government doesn't tax your purchases directly. However, it taxes the capital and payroll of every entity involved in the production of whatever it is you're buying. Those entities factor those taxes into the price of the goods they're selling--so, whenever you buy something, 22 percent of the price goes to pay federal taxes. The FairTax would completely eliminate all federal income, payroll, capital, and estate taxes. It would replace them with a national 23% sales tax, to be embedded in the price exactly like the embedded taxes now. The tax on your purchases would not increase (well, by 1% of the total price, but not by any significant measure), but the taxes on your paycheck would disappear, leaving more money in your pocket.
Sound too good to be true? It's not. Everybody wins.
Under the current tax code, while the poor are exempt from income taxes--and many actually get refunds on the income taxes they don't pay--those poor with jobs are still hit with payroll taxes, often as high as income taxes. The FairTax eliminates that. Any potential changes in the price of goods won't significantly affect the poor either. See, part of the FairTax Act includes a provision that a credit be granted to every American--regardless of income--up to the poverty line for their family size. For example, a family of four is calculated to need about $2,000 a month to afford basic necessities like food and clothing (not designer clothing, mind you, but enough so that the kids aren't naked in the street). Under the FairTax, that family of four would receive almost $500 a month--enough to cover the tax on their basic necessities. If you buy beyond what you basically need, you will be taxed--if not, you won't. (And I don't care how poor you are, if you can buy the iPod you can pay the tax on it.)
Americans who make enough money to be hit with income taxes--most of whom also pay punitively high payroll taxes--will have all of their income available. Next time you get paid, pay close attention to how much the government took out for Medicare, Social Security, and income tax. Imagine what you could do with that extra money. I know for me, federal taxes typically run about $80 a month (during school when I'm part-time) and $150 (over the summer). If the FairTax passes, I could take that $80 and spend it, and the feds still get their hands on it; I could invest it; I could put it toward retirement or grad school. It's a lot harder to invest and save when the feds confiscate a quarter of your income right off the bat.
The current tax code punishes the wealthy. While a few people are wealthy for no reason, most of them got there by hard work. In the process, they created millions of jobs. Say you've got a CEO who makes $20 million. His lowest-paid employee makes $20,000. You can scream that it's not fair the CEO makes 1,000 times as much as the lowest-paid employee...or you can see it as, if that CEO weren't operating this company, the job wouldn't be there and the lowest-paid employee (and a few hundred similarly paid employess) would be making nothing at all (which last I checked would be a bad thing). But under the current tax code, those successful, job-creating wealthy people are being punished for their success. The income tax rate for people who make over $197,000 per year is 38%. On top of that, they have payroll tax (another 8%), capital gains taxes (about 35% of the company's capital)...and they're now being threatened with another tax hike from the Obama administration. Put yourself in those (ridiculously expensive Italian) shoes. If the government already confiscates half your income and a third of your company's capital, and then the incoming vice-president says if you don't give more you're not patriotic...well, Ireland's 12% capital tax is starting to look mighty attractive, isn't it? And when the wealthy move their assets to other places with lower taxes, who loses? The millions of people who work in jobs the government just taxed into relocation. By punishing the wealthy, you eventually punish the poor...and why, exactly, should success be punished in the first place?
I mentioned Ireland. When the rest of Europe was taxing businesses at a rate between 40 and 50%, Ireland slashed their capital tax to 12. Ireland now has the fastest-growing economy in Europe and one of the fastest in the world. It's cheaper to do business there, so more businesses go. If Ireland's economy exploded from dropping capital taxes to 12, what would happen if America cut them to 0? An economic explosion unlike any seen since the Industrial Revolution. And isn't this the best time for it? If unemployment is at its highest in decades, and the economy is in worse shape than it's been since the Great Depression, wouldn't this be an absolutely great time for unprecedented economic expansion?
The FairTax would not reduce the government's revenue. It would, in fact, increase it. Think about it. Every year, millions of tourists come here from other countries. Their income, of course, is made in their home country, and we can't tax them for it here. But they do spend here. And if the feds collected taxes on everything foreign visitors purchased, their revenue would spike sharply. Then there's the underground economy. People who make money illegally--drug dealers, prostitutes, illegal immigrants, etc.--obviously don't report their incomes at all. Then there are people--like waiters or strippers--who make most of their money in cash tips and can easily underreport by thousands of dollars their actual income. All of those people can escape the income tax. But since they spend their money on the free market, they cannot avoid the FairTax. A drug dealer doesn't report their income--but they pay for everything from bread to cars just like everyone else (well, almost--very few other people walk into a car lot with rolls of $20 bills), and even if they make money illegally the FairTax will collect their share. Another thing to consider is that the estimated cost every year of Americans trying to comply with the tax code (at last count over 47,000 pages long) is over $400 billion--spent on everything from individuals going to H&R Block to corporations hiring tax lawyers to double-check the books. Think how much good that money could do in the market. This country could do a lot with an extra $400 billion.
The FairTax is simple. There's no 47,000 pages to remember. H.R. 1025 is only 133 pages long. You want an honest assessment of how complex the tax code is? IRS bureaucrats tested their employees by calling their own support line with a serious question. In over 60% of the cases, the IRS support employee answered wrongly or said some variation of "I don't know, let me get a supervisor." Can you imagine if 60% of police officers couldn't answer a question about traffic laws?
The FairTax will help secure the border. See, the prebate credit--the one that covers taxes on poverty-level spending--can only be sent to people who are registered as citizens or legal guest workers. Illegal immigrants will still pay the FairTax, because they will still buy things. But they won't get a credit to cover their basic expenses. Guest workers, on the other hand, who come here legally, announce their presence, and may eventually become citizens, will pay the FairTax and receive the benefits of paying it. That alone will not stop illegal immigration--but it does make it harder for those who ignore our laws to make a living off our system.
Unlike the income tax, the FairTax's tax base is much mroe stable. See, income tax only hits income. The FairTax is based on spending. And spending comes not just from income but from savings and credit. When some catastrophic event--like 9/11 or Bailout Madness--wipes out a lot of income, spending takes a dip--but nowhere near as sharp as the one income takes, because people use their savings and credit to continue buying things. Tax records bear this out again and again.
Under the current system, America is one of the only countries that taxes goods produced in the country, rather than those sold in the country. This puts imports at a huge advantage. They have no real tax burden in their home country--which is smart enough not to tax exports--and because the goods were produced elsewhere, they have no real tax burden in America either. Our goods, on the other hand, are taxed here--then taxed again when they're sold in another country. Why on earth does anyone think it's a good idea to put our goods at a 20 to 40% disadvantage in the world market?
The FairTax has no deductions. That may sound bad, but here's why it's not. Tax deductions are never "free rides." They are intended to encourage or coerce people into doing what the government wants. And who comes up with tax deductions? K Street lobbyists hoping to game the system. Environmental lobby pressures a representative? Now there's a tax break for hybrids. (I don't know if there actually is, that's hypothetical.) Government wants to make sure your kids are under their direct supervision from the age of four (thanks to the horrendous system of compulsory government education)? Tax break for your children in government schools. Do you really want the government to be able to guide your behavior with tax credits? It's like leading a cat around with a catnip mouse; since cats don't respond well to commands or physical coercion, hold up a catnip mouse (or tax credit) and pull it one way or the other, and the cat will follow.
The current federal tax system encourages spending and discourages planning for the future. Investments and savings can be taxed. Spending cannot. The FairTax reverses that. You see the results of spending beyond your means everywhere. By not taxing savings and taxing spending significantly, the FairTax provides a benefit to responsibility (or, I should say, an immediate benefit to responsibility--responsiblity has always had long-term benefits). That's good for everyone. And before you accuse me of hypocrisy, it's not the same principle as the government promoting desired behavior with tax breaks. See, the FairTax doesn't punish spenders to encourage saving--the tax on purchased goods does not increase. The only change in the tax on goods is where it comes from. Right now, every business involved pays the taxes to the government--then you pay the business' share of the taxes, in addition to their materials and labor. Under the FairTax, you pay the government directly, which may seem like a tax hike--but you're already paying the taxes, you just don't see it. The FairTax doesn't tax spenders any more than the income tax (in fact, less, because you don't have taxes automatically withheld). It just stops taxing savers and investors. It's not a way for government to entice people to save, but a way to stop enticing people not to save. And that's good.
The FairTax also encourages people to become politically aware and active. That's a good thing. An apathetic, unaware populace--the dumb masses or sheeple--is easy pickings for power-hungry political hacks. (Even worse is an unaware populace that is nonetheless quite enthusiastic about something--witness the four people who came in my precinct on election day asking what the black man's name was, because they wanted to vote for him.) When you never get the money the government confiscates, it's hard to feel passionate about it. Be honest, even if you read the taxes on your pay stub, you normally think of your take-home pay as your salary. But when every time you buy something, it says on the receipt "23% FairTax....$4.98" or whatever, you start really feeling how much money is being taken by the government. And then you might get a little more upset when you hear about the forty-seventh public works project in West Virginia named after Robert Byrd and paid for with federal taxpayers' money (the count as of 2006 was over thirty, including the Robert C. Byrd Locks and Dam, the Byrd Aerospace Tech Center, the Robert C. Byrd Green Bank Telescope, the Robert C. Byrd Visitor Center at Harper's Ferry National Park, the Robert C. Byrd Federal Courthouse, the statue of Robert C. Byrd in said courthouse, the Robert C. Byrd Clinical Addition to the Veterans' Hospital, etc.).
I lied to you earlier. I said everybody wins. There is a group of people who lose. The lobbyists who want tax policy to coerce desired behavior. The politicians who use tax policy to exercise power over their constituents. The hacks like Robert C. Byrd who count on an apathetic people not to notice he's appropriated over $200 million of your money to name a bunch of crap after himself. The credit card companies who want you to spend money you don't have, so they can hold a sword over your head for decades. The drug lords who collect benefits like welfare and Medicaid without contributing a dime to the system. The foreign countries whose economies have been killing ours because of the simple fact that they understand you can't tax the successful into oblivion. Those are the only people who benefit from not implementing the FairTax. Do you want the political class and the illegal-income class to win? Or do you want the rest of America to win?
Subscribe to:
Posts (Atom)