There is a sharp contrast between the world of the current tax code and the one that the FairTax will bring about. While it is important to examine the ideas behind and the ideals that embody each plan we must never lose sight of what we are trying to change. The current tax code is one we have grown used to since its inception in 1913. Its growth and expansion seem logical to us only because that is all it has been doing the past 99 years. The scope of its reach is never questioned because it has existed for decades. We never question as to why there must be a gross and net pay. We do not waste time wondering why our taxes have to be reconciled. We have been taught that government is too large and unwieldy to keep its own books and that we must do our part to help it. So it comes as a shock to people that a system exists, on paper and in Congress, which will do away with these age old assumptions and practices. Generations have spent their lives knowing only a confiscatory tax system that perceives all income as property of the state first and allowed into the hands of citizens. But how do we know if it is time to change tradition? Can we say that the tax code is evil when 99 years’ worth of leaders have examined it and kept it? Or has it just now overstayed its welcome? That is a question for the American people to decide and to highlight the differences we should examine the impact on Americans brought about by both systems.
The first easily realized aspect of our current tax code is that it is complicated. It is this complexity that has a profound impact on the daily lives of Americans. You see, this complexity is more than a mere nuisance. A basic system of taxing income was set up in 400 pages in 1913. Through time that code has grown to cover over 70,000 pages in code, regulations and tax court rulings. Yes, the tax code has its own separate court system. The instruction booklet for the 1040 alone is 189 pages long. The current tax code itself runs an estimated 3.8 million words. It is more than four times longer than the entire works of Shakespeare. The Bard used 900,000 words to artfully cover the breadth and depth of human emotion and experience. A tax system that needs four times that amount has other objectives in mind than revenue. In fact our system has turned into a method for social engineering. Anyone with a rudimentary knowledge of current political discourse will realize that our tax code has been used with a political purpose to split our nation into bitterly divided classes based on income. Not only is the income division used to hamper political debate, it masks the real issue. Our tax code is the progenitor of some troubling discussions around this country. Some people discuss the very real marriage penalty and if they should forego what is an institution to human civilization older than the idea of democracy itself. The tax code actually discourages this act in a stunning show of social reorganization that only finds itself at the edge of the tax debate. Couples also discuss whether or not both should work so that they are not punished by entering a higher tax bracket. People comprehend that this system penalizes success in such a way that promotions and raises can lead to a negative outcome. That is the definition of a backwards system. The tax code even incentivizes what cars to buy which can change markets and alter business plans. The government is using this overly complicated tax code to circumnavigate the Constitution and enter into areas never intended by its framers. And what has this code wrought? Its extensive reach and complicated methods have not brought us enough revenue to close an ever widening deficit. In fact, with all of the news about the debt crisis in Greece and Spain it is overlooked that America has a debt that exceeds the Eurozone and U.K. combined. It is now time to ask what the purpose of this tax code is. It cannot even collect revenue that even the most uninitiated would think necessary. The IRS has in the not too distant past allowed corporate bribes to be tax deductible. Another more recent case involves a basketball player deducting his fines from the NBA from his taxes. Lamar Odom was allowed to deduct $12,000 in fines for poor conduct from his 2007 return. As a Mavericks fan I find this even more insufferable. The problems listed here do not even take into account: the regressive payroll tax, the double tax embedded in products by the corporate tax, the incentive for businesses to leave the country and take their jobs with them due to a hostile tax environment, the multiple tax of social security income, the overwhelming cost of time, money and manpower to comply with an unknowable tax code, and the inherent disrespect and malice the code has for our founding document. What redeeming quality exists within it? Why continue down a road away from prosperity? What reason could possibly exist to keep this disheveled mess that breeds dishonesty, discord, and disarray? Some would postulate that the reason we do not change is that as bad as the code is there is no alternative. Luckily they could not be more wrong.
The FairTax would mark the end of Tax Day. April 15, or in this case the 17, would be just another day on the calendar. No more rushing to the post office or postponing figuring your taxes. Filing an extension would be a thing of the past. You would no longer have to save receipts or papers for tax purposes or look at a deducted paycheck. Gross pay would become take home pay and investments could be retrieved without taxes removed. There would no longer be tax brackets and corporations could finally move back to America and bring their jobs with them. The obsession with income would be removed from Washington and allow them to focus on the real needs of our society, of which there are many. The FairTax is a consumption tax, only met when purchasing a new item at the final point of sale. Your income would be your own and you could spend it as you see fit. The tax cost added to the products are mostly offset with the elimination of the currently 35% corporate tax, not to mention the $148 billion in compliance costs for big businesses alone. What we would see in the world after FairTax is one stripped of much of its complexity. Without an overbearing burdensome list of ever-growing regulations the free market will finally be allowed to flex its muscles a little. This increased competition should drive down the price of products while maximizing their quality and availability. We have tried extensive government intrusion and have seen little to no benefit for hundreds of billions of dollars of “investment”. Whether that is measured in failed green companies or an ineffective stimulus, the proof lies with the citizen and not centralized authority. Giving more people back their own money is the avenue toward success. This is realized by both parties. The Republicans have a strong sense of supply-side economics usually embodied by the example of President Reagan. The Democrats also show signs of this in a payroll tax holiday and behind the explanations of statements regarding the economic need for more unemployment checks. The basic idea is a recognition that if the citizen obtained more of his own property and income the more prosperous society will be as a result.
It is not a difficult idea to understand and has enough proof behind it to warrant much more use. If that is the case then why is there such resistance to it? The tax code has been and will continue to be used as a system of control if kept in its current state. The only issues standing in our way are the politicians that are willingly using it toward this purpose. They exist in both parties and in many areas. The alternative reality of the FairTax is attainable if only we are to act. In an election year such as this one it is imperative we use our constitutionally given right to vote our conscience and use our voice. The possibility of the FairTax is directly tied to the energy of its grassroots efforts. It will require more than email evangelism. It will require more than arm chair politicking. This is more than an effort, it is a cause. One worthy of our best efforts and attention. The two scenarios described above are very real and possible. One we know all too well and one that we seek to attain. Will our generation break a cycle almost a century long? That is a question to be answered by the American people. They are responsible for some of the greatest triumphs of mankind. It is the ingenuity of American citizens that brought the world rushing into this new millennium at break neck speed, it revolutionized industries and created wholly new ones, it taught man to fly and planted his foot on the moon. We have proven to history that man is better off ruling himself than having someone rule over him. Let us take up the banner of liberty again and show the world how an economy should truly be run. Without centralized authority but with control given to each individual citizen. Americans have given so much to the world, why doubt us now?