Economic Slavery, Our Income Tax, and The FairTax Fix

by Keith Reynolds

Economic slavery is the condition where people are forced to work (giving up time and / or money), not for their individual wants or needs, but for their master’s sole benefit.

Economic slavery example 1: Taxing income generally, along with corporate welfare tax credits, is a system of economic slavery. To be fair; at best, corporate welfare tax credits are used like band-aids to lower the burden of taxes against income in order to keep from losing certain jobs overseas; at worst, they represent a coercive government to change purchasing behavior, as well as line the pockets of powerful business men closest to those in power. When Politicians take money from our wallets and gives it to powerful business men, they set up systems of crony capitalism where success is less dependent on how good one can produce a product at prices people are willing to pay, to a condition where success depends more on the relationship to those in power. Economic slavery through crony capitalism limits and denies real opportunity to the masses.

The FairTax fixes the problem of corporate welfare tax credits by removing all taxes against productivity. In doing so, it also eliminates any need for corporate tax credits to lower the burden of taxes against productivity. The FairTax having no bias on who manufactures a product or service, improves American companies competitiveness in both domestic and international markets. The Fairtax returns America to a more free free-market, where success depends more on how good companies make a product at prices people are willing to pay. True free-market competition and reducing systems of crony capitalism benefit American consumers.

Economic slavery example 2: The complexity of our income tax has created an industry that costs Americans over $431 billion annually and growing. It cost Americans every time we have our individual taxes prepared and indirectly when we purchase a product from a business that paid tax accountants and lawyers. Averaging $431 billion over 310 million Americans, is nearly $1,400 for every for every man, woman, and child. The huge burden of preparing taxes is yet another example of economic slavery, resulting in poor compliance to an unnecessarily complex and nearly impossible to understand tax code whose design is to cement power to politicians and lobbyists.

The FairTax fixes the problem of tax code complexity by replacing nearly 70,000 pages with a 134 page bill. It also reduces the number of tax filers by roughly 85% from the present approximate 150 million. Determining how much tax to remit is as simple as 23% of a businesses gross retail sales. The FairTax rebate untaxes every family’s poverty level spending, making the FairTax progressive on consumption, while eliminating any need to exempt specific items or create several different tax rates. Both a single broad based national retail tax and the poverty level rebate work together synergistically to keep the FairTax simple and cost Americans less, so that they can spend their time and money on things they really want, or build their businesses; producing more of those products people actually want.

Economic slavery example 3: Our income tax embeds the cost of taxes into each stage of production. Taxing income forces companies to pay banks more than necessary with larger loans in order to pay the cost of income taxes embedded in every purchases of materials, supplies, and equipment, as well as building new manufacturing facilities. Corporate income, capital gains, payroll and unemployment tax costs are also embedded in bank interest rates. They raise the rates companies have to pay on their loans. The cost of larger loans and higher rate are passed onto consumers, forcing them to spend more of their time or money unnecessarily, and as such represents yet another example of economic slavery.

The FairTax fix removes the cost of production taxes from business purchases. Instead, collecting taxes at the end; simplifying cash flow. If a company sees an increase in demand, it could build a new manufacturing facility for up to 23% less upfront, and not wait for income tax deductions to take effect. Businesses would not need to borrow as much, and the loan rates would reflect the elimination of embedded production tax costs.

Systems of economic slavery takes two hits against the peoples quality of life. Firstly; it leaves individuals with less capital to be spent on things they really want. Secondly; it diverts a limited human resource (time) from producing things people do want, into producing things people don’t want. And where production of things of real value is suppressed, it results in higher prices on those things people do want.

Abraham Lincoln quote:

We all declare for liberty; but in using the same word we do not all mean the same thing. With some the word liberty may mean for each man to do as he pleases with himself, and the product of his labor; while with others, the same word may mean for some men to do as they please with other men, and the product of other men’s labor. Here are two, not only different, but incompatible things, called by the same name – liberty. And it follows that each of the things is, by the respective parties, called by two different and incompatible names – liberty and tyranny.

President Lincoln may have been discussing slavery and the ownership of men by other men in his day, but what he said then, is applicable ages before and after him as slavery takes on many different forms. Let’s end the types of slavery induced solely though taxing income, and free Americans to produce to a more free, free-market.

I'm the grandson of an Underwood and have been mapping my Underwood Family Tree for a couple years now.

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Posted in Income Tax, Tax Reform
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