The Fair Tax Blogburst
As I see it, the main problem with the Income Tax is that it is virtually impossible to enforce completely and fairly. Compliance with the Income Tax depends on taxpayer truthfulness, which 
generally is motivated either by a) good character, or b) fear of an IRS audit. With the FairTax, the tax is collected when the money is spent, from everyone, with greatly reduced opportunities for non-compliance by the public.
For instance, what about the criminal element in our country? Have you ever heard of the Mafia? Or the drug dealer? Do you think that these people report 100% of their income? Of course not! They get out of paying a huge percentage of their actual tax bill by the simple expedient of not reporting all of their income. But these same individuals still have to pay utility bills, purchase prescription drugs, visit doctors, and buy food. And if they believe in the "high life" of new cars, fancy clothes and jewelry, and new homes, they’re going to pay more than "Joe Six-pack" who chooses to drive a used car, or purchase a home that’s not brand new.
And it’s not just individuals who are managing to avoid paying taxes these days. Everyone in America has heard of the rush to move American companies "offshore", whether in whole or in part. Think about it — have you ever seen an American-flagged commercial vessel? Oh sure, we’ve got our warships, but what about commercial boats that carry cargo or cruise passengers? Most of these are flying the flag of Liberia or Panama — low-tax nations.
In the mid-1950s, about 33% of all income taxes collected were paid by American corporations. Today that number is down to approximately 10%. From "The FairTax Book" by Boortz and Linder:
"That plunge is a major factor in our recent soaring deficits. Indeed, international corporations are essentially "voluntary" taxpayers today, paying only that amount in taxes that they believe will avoid attracting embarrassing news coverage. These corporations believe that our draconian tax structures make their actions necessary. The OFCs [offshore financial centers, or banks - TD] make their plans feasible" [Emphasis added - TD]
Boortz and Linder make the point that if we eliminated all taxes on capital and labor, (which the FairTax does), the United States would become the world’s tax haven.
We have the most stable economy, the most liquid and trusted markets, and the highest rates of labor productivity in the world — and the trillions of dollars in those OFCs would flow back home to the United States for the very reason they found themselves offshore to start with.
And we’re not just talking about American businesses coming home, we’re talking about wooing corporations based in other countries into America. Think of the economic benefits! More productivity, lower unemployment, higher wages, and all occurring within a tax system that allows you at least partly to choose whether to pay taxes! Buy it new, pay a tax, buy it used and don’t!
The FairTax Blogburst is jointly produced by Terry of The Right Track Blog and Jonathan of Publius Rendezvous. If you would like to host the weekly postings on your blog, please e-mail Terry. You will be added to our mailing list and blogroll.
TD
Sphere: Related Content
Email this post
1 Comment »
RSS feed for comments on this post.
Stumble It!
Loading ...
As a constitutional “conservative” and one who has faith in the wisdom of our founding fathers plan, our Constitution, I find it difficult to confront supporters of H.R. 25, especially when they are under the impression H.R. 25 would advance conservative ideals and principles. Unfortunately, just like the people were conned when they supported the adoption of the 16th Amendment, H.R. 25 is another con job proposal which would benefit folks in government, just like the income tax now does, and would actually tighten the iron fist of government over the production of America’s businesses, industries or labor!
If you think you are not being conned, then take the time to study, with an open mind, the following
MESSAGE TO FAIR TAX RALLY PARTICIPANTS
Let me also point out that many of the ring leaders which crafted a balanced budget amendment in the 1980’s are the same crowd which now proposes a legislative line item veto power for the president. What do both proposals have in common and how do they tie into tax reform? Both proposals are sold to the people as a method to force fiscal discipline upon Congress. But, the proposed balanced budget amendment was filled with loopholes to allow Congress to continued in its reckless spending and borrowing, and, the proposed line-item-veto now being promoted likewise does squat to force or encourage fiscal discipline upon Congress___ the objective of this crowd is nothing more than creating an illusion that they are fiscal conservatives and different than their opposing political rivals They are not different and are very, very dangerous enemies to a freedom loving society!
Now, how does H.R. 25 tie into the line item veto and the balanced budget amendment? Surprise! H.R. 25 is being sold as a “conservative” idea, but is an illusion of fiscal conservatism, and, as documented in the above MESSAGE TO FAIR TAX RALLY PARTICIPANTS, would actually subjugate one of the most important rules agree to by our founding fathers which was designed to force fiscal discipline upon Congress; force Congress to extinguish deficits created by reckless spending and borrowing; and, our founding fathers rule, if followed today would also make every member of Congress immediately accountable to their state governor and legislature should they engage in reckless pork spending and borrowing! For details see: Our Line-Item-Veto con artists in Congress
Regards,
JWK, founder
American Constitutional Research Service