– Ludwig von Mises

Why do you eggheads ignore the simple fact that the underground economy continues to get a free ride under the current convoluted income tax system that would otherwise be contributing to the general fund if the Fair Tax was in place? Now I know, the drug dealers and the prostitutes aren’t going to remit 23% of their profit from their illegal activities to the federal government. When they purchase goods at the retail level with the above described profits, they will be paying the 23% inclusive tax just like everybody else. Ditto for everybody else purchasing new goods at the retail level in this nation whether or not they are here legally.

Your diatribe points out the imperfections of the Fair Tax as a collection system. Big deal. It’s not a perfect system and neither is the current income tax system. The Fair Tax is a much better, much simpler method to collect revenue to run the federal government. Here’s a few things I can do without if we switched to The Fair Tax: Keeping records of all the money I spend during the year to qualify for this deduction or that deduction. Buying $80.00 worth of software each year to make sure I can comply with the convoluted tax code and pay my fair share. Keeping records of how I invest my money to comply with the tax code. Hanging on to such records for 7+ years in case I’m audited in order to prove my innocence.

Thanks again for being part of the problem and not part of the solution.

While the federal government will still need to be funded by some form of tax, it is our responsibility to yank our senators and representatives out of office if they continue to spend like drunken sailors.

By forcing the government to implement a uniform consumption tax across the board without allowing exceptions or entitlements, it gives them less power to corrupt the system.

The biggest omission in this blog is what eliminating the income tax will do for this economy. Having no taxes on goods until the retail sale will have most of our off shore businesses coming back home. Right behind them will be foreign businesses stampeeding to this country because it will be a tax haven from their own countries. The only unemployment we will have is the people too lazy or sick to work.

The second biggest omission is that the number of people funding the government will become much larger. It won’t be just income earners. Everyone will be contributing. Even visitors from other countries and yes, even the illegal immigrants that are here now. When more people pay, everyone pays less.

The current system punishes our economy. The Fairtax will stimulate our economy. We will have the fastest growing economy in the world… until the others catch on and do the same.

It’s a shame you concede the principle. In that case there can be no argument about taxation. The government has a right to everything of yours including your body and your mind. It’s merely a matter of how much they decide to let you keep and how they calculate it.

Apart from the lack of principle FT is a poor idea. The theory is bad. It really is worth the time to find out what has already occurred in other jurisdictions when these sorts of taxation schemes are introduced. The compliance costs are high. Other taxes are not removed. The take increases over time. The govt receives a windfall of information about every activity in the economy and eventually about every person. “Perceptions” about limiting tax and limiting government are NOT ALTERED WHATSOEVER (how could they be when the scheme remains, pay or else?- exactly as with any and all tax). The people comply, pay the new imposts and go on to comply and comply and comply (as Stalin noted, you can “Squeeze them until the pips squeak”). These are the things that ACTUALLY DO OCCUR. Happens each and every time. So why persevere with FT when you already have ample evidence of what WILL happen? Promoting FT is wrong.

A few years back in Sydney a group of twenty men and a few under age boys as well (all from a particular cultural minority) dragged two young women off to a secluded building and over the course of several hours tortured & pack raped them. They even called up their friends by cell phone and invited them over to take part; some did. When these thugs were eventually captured by the police investigators, they claimed that what they had done was justified. The women were not dressed correctly. They had asked for it and deserved their ordeal. It was a “punishment by God”. The point here being that in that building, at that time, the rapists were in the majority (28 – 2). Most people present at the time (along with their families and relatives it would seem) actually considered the activities ocurring were OK and correct. They agreed with what was happening. Did that make it right? The answer, of course, is no. Taking a democratic vote is not the way to determine right or wrong, good or evil. It never has been.

Whether the great mass of people accept tax theft or not is irrelevant. The truth or morality of an issue can’t be established and validated by social metaphysics.

Tax, like rape, is a wrong. In effect all the FT proponents are achieving is to argue how the violation should occur; front or back.

Talofa!

Sione

The majority of rapists do not consider rape as a wrong either- certainly not while they are in the middle of undertaking such.

Interesting that you identify my position as “extreme” (whatever that is supposed to mean). I do consider the promotion of rape or theft to be unreasonable, just as I consider those very actions to be terrible wrongs. Surely you’re not of the opinion that I should compromise and accept such evils albeit on a limited, regulated basis?

This issue comes down to a matter of principle. As long as the core principle is avoided (that tax is theft), all that is being undertaken is a wee bit of fiddling around the edges of the situation. Unless and until the principle is applied nothing worthwhile is to be achieved. All that you are doing is attempting to alter the time and place and exact method of the commission of the crime (the tax or the rapes), nothing more than that.

By avoiding principle you have conceeded the argument already. You will never stop a rapist unless you act on principle (as has been occurring in Sydney where these thugs are being chased down and removed from the scene for decades). Similarly you will not stop theft unless you act on principle. Ditto taxation.

In the case of the FT nonsense the principle that “tax is theft” has been evaded entirely. The FT people are promoting the notion that FT is a better way to steal. In reality that’s about all there is to FT and that’s about all that’s being discussed. How does this nonsense demonstrate to ANYBODY that taxation of a form of theft? It doesn’t. FT is theft.

It is unreasonable to expect anyone could come to the understanding of the nature of tax as a type of theft from FT promotions.
People will not “see the core classic liberal philosophy again” as the result of the FT evasion of it and of one of its core principes.

Meanwhile, I draw your attention to the reality of what occurs when schemes like FT are implemented. Places like New Zealand (do you even know where that is?) have tried all this stuff already. Go there and take a look for yourself. The results are not at all good for freedom. In the end you get more collectivism instead.

There is a saying; “What’s bad in practice is bad in theory.” FT is a really bad practice. Don’t be applying it to the USA. You’ll be responsible for hurting many innocent people.

Sione

PS: I am not a member of a political party.

The magnificent idea of redesigning a tax system has been promoted and implemented before- more than once. Why can’t you North American tax obsessives seek out other places where such this has already occurred and learn something?

Here is one small example.

During the 1980s in a little country called New Zealand (it’s near Australia and no, the Harbour bridge does not cross the Tasman harbour to join Australia with New Zealand) the government restructured its taxation system. A new Labour government under the then Prime Minister David Lange and his Minister of Finance, Roger Douglas, introduced a sales or consumption tax similar in many respects to the “Fair Tax” (what a dishonest title, as if tax can ever be fair- who was the dirt low liar who came up with that moniker?).

There was a big promotion about how it was going to be more efficient, how people would pay less, how other product specific taxes and regulations would be eliminated, how income tax would be reduced, how much easier compliance would be and how everyone would benefit- paying less but getting more. Yes, a miracle!

What actually occurred since then is that more new laws and regulations were indeed introduced. The new tax (GST) which started at 10% was raised to 12.5% (an act which started off a recession at the time). Income tax has been raised. Product specific taxes remained and in some cases were increased (gasoline and imported Japanese cars for example). New types of impost, charges and taxes have been introduced and raised. There is tax on tax. The government take is UP. They steal more money than ever.

An important issue that is rarely discussed is the collection and collation of information that a tax of this sort enables. Thousands of new staff to implement and administer the GST system were employed. New software and computers were purchased. Much important and sensitive information collected. Every aspect of private business is able to be derived or obtained. There aint no privacy.

FT will not result in an improved situation for US citizens and residents. To believe so is foolishness indeed. These ideas have been tried previously and they do not work out as promoted or wished for. FT proponents have a lovely wee faith but it is arbitrary and based on little more than wishes. Real evidence demonstrates the futility of their position (unless of course what they are really working for is bigger, more intrusive taxation).

What FT fetishists ought to consider is PRINCIPLE. Tax is theft. Start from there. The way to go is to campaign to remove existing taxes and NOT to promote yet another new one.

An analogy. Should one oppose the pack rape of young Australian women by lebbo thugs from Western Sydney, one does not proceed by campaiging for regulations to confine the rapes to Sunday’s between 7:00am and 9:00pm, such rapes not to be visible to the public, nor to take place near or upon Sydney beaches or train stations. One does not proceed along such a path with the rather naieve hope that by incremental steps the raping can gradually be lessened and come under control. One proceeds as the Sydney-siders have done. Catch and imprison the rapists.

In conclusion: FT is an unprincipled idea. Best to realise it’s been tried elsewhere and didn’t work as promoted. Spend your energies elsewhere. This thing aint worth consideration.

Si

First, I reserve the term censorship for government policies.

Second, the Mises Institute doesn’t have to publish your article and there may be reasons other than the intent to suppress opposing viewpoints for their not publishing it. Example #1, they can’t publish everything that is submitted to them. Example #2, they may honestly consider a particular article to be of poor quality.

Finally, it seems to me that there are plenty of pro-Fair Tax comments on this blog. Hardly evidence of suppression or censorship. Can’t Jeff Tucker express his own opinion in a blog comment without being accused of intent to suppress?

We’ll – The FairTax website is dedicated to promoting the FairTax. The Mises Institute, in my view, is for the discussion of classic liberal philosophy, libertarianism, and liberty. They have different purposes Mr. Vance and I would expect the Mises Institute to further the discussion on these topics and not limit itself to idealogical positions with no practical solution or advancement of these principals.

We’re discussing tax reform (not tax cuts) which would hopefully result in a reduction / or limit government growth and result in reduced taxes. The argument which is discussed in Mr. Mastromarco paper. The FairTax would certainly result in reduced tax burden per several studies. It is important to separate the two (tax reform / tax cuts) as it is unlikely to be done together.

Such discussion is the longest running debate in our circles – incrementalism. You seem to believe publication of an incremental approach not worthy of the Mises Institute. Voluntary taxation is the only immediate solution as you might say. However, this is not a solution – it is an immediate pipe dream. You might as well be writing fiction. Don’t get me wrong – I have not given up and I want many of the same things. However, I live in a world called reality. This world says we need to have incremental steps to achive such ideas. I’d expect the Mises Institute to be more then a one sided attack dog.

Again, if the Federal Reserve Act of 1913 was repealed 1 January 2007, what happens next? What is your plan following the repeal?

To all Libertarians, if you didn’t know it existed, read The Fair Tax Book by Boortz and decide for yourself if the FairTax is worth supporting. When Mr. Vance hypothesizes regarding The FairTax, that doesn’t make it fact. Again, read and decide for yourself…

EW

It is easy to see from a reading of Boortz’s book that the Fair Tax is a step in the direction that Libertarians want to go. The main criticisms of the Fair Tax are because it won’t eliminate taxes, it won’t shrink the Federal government to a 1789 level, and it sends a check to every household every month. Eliminating taxes and a 1789 government are not going to happen anytime soon, and no movement in that direction will ever happen without the Fair Tax. But since the Fair Tax doesn’t take us all there in one fell swoop, it is a “fraud”. Give me a break.

The Libertarian Party will never be a major player on the American scene because they do not know how to win. They are not patient, they are not willing to focus on “let’s get what we can now, and work on the rest later”, they are not willing to compromise, they are not willing to form alliances to gain enough support to actually win. So they remain a fringe player on the national scene and will never win anything.

Libertarians pursue everything on their agenda with the same priority, and anything that doesn’t give them everything they want now is of the enemy. It doesn’t matter how outlandish or unsupported by the mainstream of America, it must be adopted today. A plan that only gives a little taste of what Libertarians support so Americans will want more is not good enough.

When I try to talk to folks about a smaller government, a cheaper government, I get the “So, a Libertarian, huh? Yeah, legalize drugs…cool, dude.” I say, “Yeah, but that’s not important. How much America has fallen prey to what the Founding Fathers tried to protect us from is what is important.” But all my friend is thinking about is Libertarians and legalizing drugs.

In the 2004 election, with high negatives for both candidates, the Libertarians had a chance, for perhaps the first time, to really gain on the two major political parties. How did they do? Their rabid ant-war rhetoric, using some of the same quotes about America that Osama Bin Laden used, alienated so many that here in North Carolina Libertarians lost their ballot access. A friend of mine said they did poorly because they have grown so comfortable being out of the mainstream for so long that they didn’t really want to move into the mainstream.

So the Fair Tax doesn’t really mean that you get to keep 100% of your paycheck? Ok, you’re right. There will still be state witholding, unless the state adopts its version of the Fair Tax. So what? Is that technicality so vitally important, or are we just pole vaulting over mouse turds while Rome burns (to really mix my metaphors)?

The Fair Tax will certainly go a lot farther in helping us to see how big government has grown, more so than anything else in existence or on the horizon. That visibility should help us to be more careful about what we let our government do to us. If we don’t (“We’ll end up with both a sales tax and an income tax!”), then shame on us.

The Fair Tax will energize us more in exercising care about what government does, and let us see how much government costs because it will shout at us every time we buy a loaf of bread. Will the Flat Tax do that? Will anything from the President’s Commission do that? All of them keep the income tax, they keep the IRS with its Big Brother intrusions and powers, and they hide what the government costs. But let’s call the Fair Tax a fraud because it doesn’t eliminate taxes – what a brilliant strategy for getting where Libertarians all say they want to go.

No matter what else it does or doesn’t do, it does stop the income tax. And for that alone I would pay a lot. I yearn for the day when no one in the federal government knows or cares how much I make. Bring on the Fair Tax – it’s the only plan that does that.

If the Federal Reserve Act of 1913 was repealed 1 January 2007, what happens next? What is the plan following the repeal?

EW

The FairTax does not call for a reduction in the size of the Federal Government, and makes the claim that it will simply be a system that gets the same output in tax dollars as our present income taxes, etc. do. It is a shift in how taxes are collected, rather than a true, substantial reduction in the size of our government.

Of course, I would love to keep all of my paycheck, as well as enjoy some of the other benefits, but as a libertarian I cannot support this initiative for several reasons. Your reference to looking for improvements rather than a ‘pie in the sky’ reminds me of part of Rothbard’s concluding chapter in his book “For a New Liberty”:

Are We “Utopians”?

In the field of strategic thinking, it behooves libertarians to heed the lessons of the Marxists, because they have been thinking about strategy for radical social change longer than any other group. Thus, the Marxists see two critically important strategic fallacies that “deviate” from the proper path: one they call “left-wing sectarianism”; the other, and oppos­ing, deviation is “right-wing opportunism.” The critics of libertarian “extremist” principles are the analog of the Marxian “right-wing oppor­tunists.” The major problem with the opportunists is that by confining themselves strictly to gradual and “practical” programs, programs that stand a good chance of immediate adoption, they are in grave danger of completely losing sight of the ultimate objective, the libertarian goal. He who confines himself to calling for a two percent reduction in taxes helps to bury the ultimate goal of abolition of taxation altogether. By concentrating on the immediate means, he helps liquidate the ultimate goal, and therefore the point of being a libertarian in the first place. If libertarians refuse to hold aloft the banner of the pure principle, of the ultimate goal, who will? The answer is no one, hence another major source of defection from the ranks in recent years has been the erroneous path of opportunism.

Recent movements among libertarians have called for a restraint on our radicalism, if only to achieve practical and immediate results for our efforts. But it is precisely this attitude that most harms liberty in the long run.

I have to ask the question: is the Fair Tax, whatever its benefits, more of a diversion or more of a help? I think, unfortunately, that it’s the former, not the latter.

Why hack at the branches, in talking about Tax Reform? Why not strike the Root? Get behind the repeal of The Federal Reserve Act of 1913.

Then, it may make some sense to dicuss the level, and the system of collection, thereby, of Taxes that should be raised.

As long as the FedRes is free to control our currency we’ll never acheive any purchase, no matter if our purchases or incomes are taxed.

And, EW, with this: “That type of solution will never be accepted from our elected leaders or the lobbyist who use that leverage against us, the tax payer.” kind of thinking, you may as well retire from the battlefield of Ideas, and the pursuit of Liberty.

Every argument against the fair tax on this site is either a factual misrepresentation, or a pie in the sky “do away with all taxes” comment.

The benefits of the fair tax are right in front of your face if you could just take off the blinders and give the idae a chance.

While the fair tax isn’t perfect, it does fix many of the problems that we currentl have in place.

Mike B

If you dislike the FairTax, please provide solutions instead of repeal this, repeal that, and repeal FairTax. That type of solution will never be accepted from our elected leaders or the lobbyist who use that leverage against us, the tax payer.

Taxes are a reality and a necessity, not only for all these crazy social programs we have instituted, as we fight a far greater adversary than any in history….the terrorist. He is a foe who hides among us and strikes after years of hiding, studying, planning, and practicing. Funding those who kill these bastards is fine by me. So replacing, instead of repealing altogether, the current system with a consumption tax on all new goods and services is a great idea. God bless those men and women (as I am one of them).

So…why the FairTax? I choose this plan because:

•The FairTax eliminates the individual income tax
•The FairTax eliminates the payroll income tax
•The FairTax eliminates the estate tax and the gift tax
•The FairTax eliminates capital gains taxes
•The FairTax eliminates the alternative minimum tax
•The FairTax eliminates the self-employment tax
•The FairTax eliminates the corporate income tax
•The FairTax allows you to keep 100 percent of your paycheck, pension, and Social Security payments
•The FairTax frees up the time wasted on filling out cumbersome IRS forms
•The FairTax wipes out the income tax code and shuts down the IRS
•The FairTax makes taxation of income unconstitutional by repealing the 16th Amendment
•The FairTax exempts all taxpayers from federal taxation up to the poverty level, through a monthly rebate
•The FairTax ensures that all Americans pay their fair share of taxes (rich have more money, they spend more, and buy more new goods and services than the poor)
•The FairTax dramatically lowers tax rates for low-income and middle-income Americans (like myself)
•The FairTax enables families to save more for home ownership, education, and retirement
•The FairTax protects and ensures the funding of Social Security and Medicare
•The FairTax leaves unchanged the amount of money raised by the federal government
•The FairTax makes American products more competitive overseas
•The FairTax ensure that the 12 million plus illegal population pay some type of tax

Of course, these are but a few of the solutions the FairTax provides Americans. So, why not the FairTax? What other idea or system provides this amount of comprehensive tax reform and benefits? Actually, there are none. Until a better solution is offered, my family and I support Americans for Fair Taxation (http://fairtax.org/index.htm).

EW

H.J.RES.14
Title: Proposing an amendment to the Constitution of the United States relative to abolishing personal income, estate, and gift taxes and prohibiting the United States Government from engaging in business in competition with its citizens.
Sponsor: Rep Paul, Ron [TX-14] (introduced 1/26/2005) Cosponsors (2)
Latest Major Action: 3/2/2005 Referred to House subcommittee. Status: Referred to the Subcommittee on the Constitution. COSPONSORS(2), ALPHABETICAL [followed by Cosponsors withdrawn]: (Sort: by date)

Rep Flake, Jeff [AZ-6] – 1/26/2005
Rep Miller, Jeff [FL-1] – 4/26/2005

Wow … two whole co-sponsors. Since the President has stated that he would only consider any revenue neutral tax reform proposals and the Democrats have indicated that they will reinstate Paygo rules as one of their first orders of business, how do you propose getting this enacted?

It would appear that with only two co-sponsors, virtually unanimous opposition by the Democrats, as well as a majority of Republicans in congress, plus the President, this is a very challenging undertaking (to say the least).

Please share your strategy with us.