A Word About Taxes

A friend of mine and I were discussing tax policy a year or so ago, and I remarked that sales taxes are inherently regressive. With my own particular view on social justice, I disapprove very strongly of regressive taxes. I realize that some conservatives have very different views about progressive taxes, but no one but the most injust could possibly approve of a regressive tax.

When I first heard of the Fair Tax, it sounded to me like a deceptive label for a regressive tax plan. Frankly, it could have been a shifting of the tax burden from the wealthiest earners to the middle and lower classes. It could have been exactly the “tax cut for the rich” about which we hear all the time from the Left.

It’s not, though.

I began reading the Fair Tax site, looking for the information that I could use to blast the whole case open. I was sure that I could find something, because, after all, it was based on a sales tax. Sales taxes are regressive. I’m against sales taxes.

I became a believer in the Fair Tax, though.

First of all, there is my belief in the original intent of the Constitution. The Founders rejected the idea of an income tax. In order to tax incomes, we had to pass the 16th Amendment to the Constitution. We can have an income tax, but that doesn’t mean that it’s a good idea. Alexander Hamilton wrote about the merits of such taxes in “The Federalist Paper” No. 21.

One of the problems with the income tax system is that it’s full of loopholes, exemptions, tax credits, and such. We have people who lobby the government to make sure that their industries get exemptions and credits … which means that we pay people to listen to lobbyists, then we pay for people to manage those taxes and make sure that those exemptions are handled correctly.

The IRS is a multi-billion-dollar agency, which we can shut down. There are hundreds of billions of dollars spent every year in preparing income taxes, to say nothing of how annoying those stinking forms are. What if we just paid our taxes at the grocery store?

Of course, I looked at this and I was ready to fight … those who earn a ton of money are able to save some. Those who make very little, and live paycheck to paycheck, spend it all. This is why sales taxes are regressive.

If your state has a 7% sales tax, and you spend your entire income, you’re paying a 7% tax. If you spend only three-quarters of your income, then you’re only paying 5.25%. If you only spend half of your income, you’re paying 3.5%. That’s regressive and terrible.

Which is where the real brilliance of the Fair Tax is. A system of “prebates” will send funds to families that help make sure that there is an allowance for necessities.

I looked for the flaw in this plan, the one that would show that it was as bad as any other tax reform plan.

There isn’t one.

I didn’t go to FairTax.org simply looking for information. I didn’t go there with an open mind, trying to decide whether I liked what they had to say.

I went, knowing that these were my enemies, and I was looking for the weak spot in the armor. I was wrong. Within a few hours, I was a convert. The Fair Tax is properly named,  and it’s the program that we need to fix the bureaucracy and expenses of the modern tax system.

When I heard Mike Huckabee talking about the Fair Tax, it piqued my interest. A faithful Baptist minister and a supporter of the Fair Tax … he’s been my guy ever since.

If you haven’t checked it out, you need to look at this information.

You owe it to yourself to be properly informed.