The FairTax BETA 0.1

Long, long ago, in a land not so far away, a Secretary of the Treasury had dreams of a consumption tax that would fund America’s government and help a thriving America grow even more. Thoughts of the FairTax have been around since before December 12, 1787 when Alexander Hamilton wrote the following as part of the Federalist Papers #21:

There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, “in political arithmetic, two and two do not always make four.” If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country. Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment. Either the value of land, or the number of the people, may serve as a standard. The state of agriculture and the populousness of a country have been considered as nearly connected with each other. And, as a rule, for the purpose intended, numbers, in the view of simplicity and certainty, are entitled to a preference. In every country it is a herculean task to obtain a valuation of the land; in a country imperfectly settled and progressive in improvement, the difficulties are increased almost to impracticability. The expense of an accurate valuation is, in all situations, a formidable objection. In a branch of taxation where no limits to the discretion of the government are to be found in the nature of things, the establishment of a fixed rule, not incompatible with the end, may be attended with fewer inconveniences than to leave that discretion altogether at large.

PUBLIUS

What did he say?

The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources.You control the taxes you pay, and you can pay as little as you want if you keep track of what you spend.

The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions.Spend within your means and you will be taxed accordingly.

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess.One advantage of Consumption Taxes is that they help prevent you from paying too much taxes.

They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue.You cannot purchase more than you make without some form of additional credit or supplemented income.

If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds.If the tax on consumption is too high then people will consume less or find ways to avoid paying them. Side note: economic spending is a great indicator of whether consumption taxes are too high. To increase consumption, decrease taxes.

This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.Consumption taxes are not oppressive like income taxes, and, by nature limit the power of Government. (See! This was common knowledge back in 1787 even.)

Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country.Consumption taxes are considered indirect taxes (and are therefore CONSTITUTIONAL), and must become a major part of the revenue raised in the USA.

I’ll leave the rest to you. I’d love to hear your thoughts on this.

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Posted in FairTax, FairTaxNation, Tax Reform
One comment on “The FairTax BETA 0.1
  1. This is the nice thing about the FairTax: it’s not a new idea. It’s too bad this hasn’t been implemented before. I never thought of it, however, in terms of being able to control how much tax I pay; but the more I think about it, the more I think it makes absolutely perfect sense.

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