by Max Pruger
Let’s look at this from a completely different perspective. We’re all smart and all have backgrounds that influence our assumptions and judgments. When we start talking about new tax plans, every one of us suddenly turns into a Macro Economist. We start discussing compliance costs, human behavior, cheating, exports, imports, etc but the reality is that we’re not Macro Economists and even if we were, there’s still no guarantee we would be right. So ask yourself, “Is the FairTax better for me.” Take the FairTax challenge and go to FairTax.org/calculator and enter your numbers. Based on the FairTax, as it is written and presented to Congress, you will get a comparison between your current tax burden and the tax burden under the FairTax. These are just the straight numbers, no assumptions on economic growth, job creation, etc. A straight comparison on what you pay today under the Income tax, and what you would pay under the FairTax.
Let’s stop debating Compliance costs. Do you currently care or have any idea what Walmart’s or Joe’s Diner pays in compliance costs. Do you care how much McDonald’s or your next door neighbor fibs when they fill in their income tax? If they cheat, that’s the gov’ts problem.
Let’s stop debating consumer behavior. The FairTax is written as 23% inclusive. That’s what’s currently in the bill. And for the sake of argument, let’s say it’s not 23% but 30%. So what happens? The gov’t raises the rate to 30%. The poverty level is multiplied by 30% now, still making all spending up to the poverty level tax free, and everything above the poverty level is taxed at that rate. Remember it has to be revenue neutral. The gov’t currently takes in 2.2 Trillion. So if the rate is 23% to get to 2.2 Trillion that’s what it is. If it’s 30% then that’s what everyone is paying anyway under the income tax. So the gov’t will have to convince the people that it’s the same thing and raise the rates.
Let’s stop debating if it will hurt the poor or help the rich. Instead, find out if it will help you? The only way the FairTax will pass is if it has broad base support. Let the poor, middle and wealthy enter their numbers and see if they’re better off. If greater than 1/2 the nation is better off then the FT has a chance. If it’s > than 80% then it has a really good chance.
Let’s stop debating the merits of the Prebate. If you don’t like it, then don’t take it. The gov’t is not putting a gun to your head to take any deductions. You don’t want the home mortgage deduction, don’t take it. You don’t want the child tax credit, don’t take it. You want to pay more in income taxes, that’s your right. Same goes with the Prebate, don’t want, don’t take it. Instead pay a flat tax of 23% on every new good or service you buy. That’s your choice, just like it’s someone else’s choice to take it. If they decide to take it, that’s their business. You can also change your mind since you have to sign up for it every year. Don’t like it to start, don’t get it. Decide that it’s good in a few years, then sign up.
The gov’t bureaucrats, lobbyists, special interest do not want the FairTax as it takes away a tremendous amount of their power. The only way this will pass is if a majority of the people demand it. So find out if it’s better for you. If it is, support it. If not, then don’t. Just do this simple thing and worry about yourself. If you just do that and the FairTax passes then it was better for a majority of the people, if it never passes then it wasn’t “better” enough for the majority of the people.