My Fair Tax
Today is tax day: that wonderful day of the year when on threat of imprisonment hard working Americans everywhere are all forced to fork over some predetermined portion of their income. Lucky for me I don't really have an income to tax, so I don't actually care. But if I was pulling down something more than the 2 grand I made as a waiter last summer, I think I'd be pretty pissed off. While we get schools, roads, and rec centers in the exchange, something about tax day just doesn't feel quite right. Don't get me wrong, I am not the unabomber anarcho-capitalist type--though some people have excused me of this level of extremism. I do accept the need for government on some level. I just don't think any sane person could assert that the winding maze of IRS protocol represents the most effective means of collecting taxes. Americans pay 250 billion dollars every year in preparation for filing their personal income, all in the hopes that they can exploit the wording of some antiquated bill and save a buck or two.This is a system that rewards trickery and deception, a system that rewards the stashing of assets off-shore in made up micro-nations.
So what's the answer? My personal favorite solution is called the Fair Tax. The Fair Tax would repeal the federal income tax in favor of a national sale tax at a rate of 23%. Essentially, individuals would be taxed on their consumption as opposed to their income. All citizens would receive a “pre-bate”, meaning everyone would get a refund for their first 20,000 dollars of spending. This would make the Fair Tax a progressive tax, with the rich paying more than the poor. Importantly, goods would only be taxed at their final stop, meaning that all investment, savings, and charitable giving would be tax free expenditures. This change in the incentive structure would undoubtedly lead to an unparalleled expansion of the US economy. Foreign companies would move their headquarters to the good ole US of A in the hopes of cashing in on this favorable tax structure.
Studies have shown that the implementation of the Fair Tax would result in the same level of tax revenue for the federal government, meaning you liberals could maintain all those entitlement programs that assuage your guilt so effectively. One of the reasons revenue neutrality would be possible is that the Fair Tax would be able to tax black market industries that currently avoid taxation by virtue of their extralegal status. Even your local drug dealer would have pay Uncle Sam his cut when he buys 24 inch rims. Even prostitutes have to by those stilettos and fishnet stockings somewhere, right?
In the end though, the Fair Tax is only one solution. While you may disagree with the Fair Tax on specifics, I think we can all agree that something has to change. Every April 15th is a painful reminder that our tax code is painfully inefficient and woefully complex. Changing the tax code, now that's some change I can believe in. Come on Obama get to work...