Why the (so called) “Fair Tax” is bad for America and goes against everything the Tea Party stands for.
Disclaimer: The following is my own personal opinion and may not agree with opinions of PFA.
I’m going to keep this short and simple because when it comes to fixing our horrible tax code I could rant for hours and I don’t want to subject anyone to that, so as succinct as possible…
The “Fair Tax”, as simply stated as possible replaces the Federal Income tax with a federal sales tax. To some this sounds like a simple way to tax a person, but only because many have accepted that the idea of sales tax in general is acceptable, but here is why this is a horrible idea.
The federal income tax is basically taxing one single transaction each year. This should be simple but it’s been horribly complicated by politicians, so as a solution they want to tax several transactions each day, perhaps dozens each day instead of just one each year. This would require at least 100 fold the amount of work and overhead spent to collect and enforce such a massive monstrosity, also keep in mind that not all states have sales tax so there is nothing “Fair” about forcing them to create a monstrous bureaucracy necessary to collect tax every time a child purchases bubble gum, or you pay the kid next door to cut your grass.
The states that collect sales tax spend a massive amount of money to collect this tax, so we have an overcomplicated Federal tax and a massively over complicated sales tax in many states. We cannot force all states to dump the sales tax idea, but if they did they could reduce the number of transactions from thousands per year to just one, this would be the best solution. Some states actually have tax enforcement agents going to flea markets and community yard sales and demanding detailed record keeping from people as well as auditing every tiny little family owned retail store, counting up all their receipts, etc…
A Flat income tax would be a simple answer, a simple code and if each state wants to tax their people they can add a percentage for the feds to pay to the state. For example, if you make $50k, you pay $5000 to the feds and $1000 to the state, no sales tax, no state income tax, shrink the IRS by 90%, eliminate the need for state income tax and sales tax bureaucracy and the massive overhead it costs to regulate every time money comes in and goes out.
Of course the percentages will need to be adjusted to meet the needs, but after we get rid of all the wasted money in collection and enforcement and the loopholes that allow people to defer tax payments indefinitely, we’ll no longer have to tax people 30, 40 or 50% of their income.
I will violently object to any attempts to force my state to collect sales tax. This would destroy our economy and frankly, if you feel sales tax is a good idea, you’re not thinking clearly.
Taxing every single transaction made no matter how small is the dumbest idea ever and is the reason I moved to a state that was wise enough to not institute a sales tax, so please don’t force us to follow in your unwise footsteps because we should unite around abolishing sales tax, not increasing it and putting the federal government in charge of it.
The “Fair Tax” is anything but fair. We need a simple tax, once a year not many times a day. I have many ideas how to simplify the paying and collecting of taxes like collecting on a persons birthday instead of on april 15th so there is no “busy season” where the IRS is overworked and the rest of the year when they have nothing better to do than harass tax payers. Let them collect year round and after it’s simplified they could operate on a fraction of the staff required now.
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