Sunday, April 15, 2007

Just What is FAIR?

It's tax time and every year we start hearing about a reformation of the American tax system, but every year, it appears to just be talk. In reality, I think the fair tax sounds anything but fair, by description. In all "fairness," I've only heard the fair tax discussed on conservative radio, so I do not necessarily have the full picture. What I do have, sounds good on the surface, but . . . This word FAIR is tricky anyway. Some people think all people must receive the same thing to be fair, but some people may not want what someone else has, so to be fair, do they have to accept something they don't want? What would be entailed in this fair tax? How would it change our present economy? Those that support the fair tax say it is the best way to begin to reduce the deficit, so right away, we know it will be a tax increase. The deficit is huge and getting larger, so obviously if it is going to be reduced, more money will be needed. I have heard what is supposed to be an arbitrary figure of 23% on the purchase of goods and that will solve the tax debt, no income tax. But that translates to the purchase price of everything going up nearly 25% and remember with fair tax, there is no refund at the end of the year. Now, I heard that this tax will be so efficient that everyone will be entitled to a monthly or quarterly refund to offset increased groceries and pharmaceutical costs. And the good news about this entitlement? It doesn't matter how much you make, you just have to apply for it. So, this sounds like a great deal for the rich, now doesn't it? It also causes me to question the need for 23% federal sales tax. If everyone is guaranteed a refund, why not just charge less to begin with? Maybe this 23% is just figured too high. I guess my biggest question about this fair tax or federal sales tax has to do with the practical issue of employment. If there is a tax that is calculated at the point of purchase, then what happens to all the tax preparers? And what happens to the hundreds of employees at the IRS and the bureaucrats that enforce the tax laws we have now? What happens to all of these people if the present tax system is dissolved? Who is going to hire an unemployed IRS auditor?
Charge them that are rich in this world, that they be not highminded, nor trust in uncertain riches . . .

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