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A proper gander at the FairTax

 A recent debate topic on Facebook's Politics poll was whether you supported Mike Huckabee's FairTax plan. The FairTax is a splendid example for examining language and economics. Let's not mince words: The FairTax is not fair. It is an ugly euphemism designed to receive support. Eliminate the IRS and replace it with a simpler tax code that is fair? Sure! exclaim many. No! I say. Let the IRS die and the rest of the tax code with it. Here are three responses to common arguments regarding the FairTax.

  • The FairTax is not "fair"; there's nothing fair about taxation — what would be called theft if any private individual were standing between you and your purchase extracting a benevolent 23 percent. As Murray Rothbard noted about the FairTax, it's essentially a "pay to live" tax: You must relinquish 23% of your purchase, whether it be a plasma television or a Thanksgiving turkey. The FairTax says this: The government must be involved in every purchase you make; there is no privacy between consumer and provider.

  • The FairTax is not "simplification." The IRS may be gone, but another bureacracy is put in its place. The idea behind eliminating the IRS, as Ron Paul argues, is not because it's complex or confusing, but because it is illegitimate. The federal government should be reduced, not tinkered with. The elimination of the IRS, with nothing to replace it, forces the federal government to behave constitutionally because it cannot extort payment from every individual to finance the myriad federal functions not authorized by the Constitution.

  • The FairTax is finally fair to rich people! No more progressive taxation under the ugly income tax — a tax that penalizes you for being more productive. And this is why some people oppose the FairTax; it is because now the rich are taxed as the poor are. The rich must relinquish more! they say. And how much more? And who is rich? Who determines these arbitrary constructions? What obligates the "rich" man to give to the "poor" man? There is no norm to establish this creed, which is why it has no answer and no substance.

As all popular federal governments do, the national sales tax (i.e., the FairTax) will grow over time. What is the harm in 1% more? And then another 1 percent? It must be noted: the proposed 23% is to cover current expenditures. What happens, as we've unfortunately seen over the past centuries, when the federal government spends more? The sales tax must be increased proportionately. Who determines the correct percentage? And is the sales tax on top of already existing state sales tax and "sin taxes," e.g., cigarettes?

 The FairTax must be rejected for what it is: A farce. There is no simple, no just tax. Repeal them all!

Published Wed, Jan 23 2008 5:37 PM by thedo


# A proper gander at the FairTax@ Wednesday, January 23, 2008 6:25 PM

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# re: A proper gander at the FairTax@ Wednesday, January 23, 2008 6:42 PM

The government requires funding in order to operate.  Eliminating the IRS would be awesome, because they're nothing short of evil, but the fact is that SOMETHING would have to compensate for lost income to the government.

I'm aware of the research suggesting that the income tax produced a very small portion of income for the government, but as the most highly visible congress and the American populace will expect a replacement 'visible' tax to take it's place.

by Adam

# re: A proper gander at the FairTax@ Thursday, January 24, 2008 6:19 PM

The chap above me said, "The government requires funding in order to operate". Be that as it may, if theft is required for it's operation, then it shouldn't operate. Perhaps if government were a for-profit organization, then it's scope would be limited by it's successes. For instance, if it used only the money it gained from state lottery's, and the charges for state utilities, and make toll highways. That way the people who use the services are the ones actually paying for them, and the government doesn't grow to be the evil behemoth that ours (in the US) has become.

by Brandon

by Brandon

# re: A proper gander at the FairTax@ Friday, January 25, 2008 10:57 AM

Brandon said: "...if theft is required for it's operation, then it shouldn't operate."

and I say: AMEN, brother!

I want to make my own decisions for what I do with the compensation I receive for my work. If I make unwise decisions then I will have to clean up my own mess - but I will learn from it and get better at making wise decisions. I don't want the government to deprive me of this learning process - the process which will make me a responsible member of society instead of a leach on society.

The FairTax is an "ugly euphemism" designed to prey on people's ignorance for nothing but political expedience. This article clearly points that out. Great article!

# re: A proper gander at the FairTax@ Wednesday, April 30, 2008 1:17 PM

Well as I agree that all taxes are bad you have to ask yourself what is better. we could forever go around arguing the case for really small or no government but until that day comes why not fight for something better.

"What is the harm in 1% more? And then another 1 percent?"

I see this as almost a fact but would this not give us an easier tool to find government. As they raise and raise the rate it would be all to easy to show the people what government is doing.

Also people would feel it everyday when they go and buy something. No longer would taxes be hidden with corporate taxes as all corporate taxes would cease. So all taxes are felt at every transaction. Therefore people would feel it more.

One more note. I would tend to think people would save more as well considering whenever you buy something you get hit with a 23% tax with ever purchase so people might not spend it so much forcing people to save.

What do you think?

by acejoca

# re: A proper gander at the FairTax@ Thursday, July 24, 2008 9:37 AM

I agree with acejoca in that I think the FairTax would be better than what we have now for the reasons acejoca lists and more. The tax would be imposed when retail transactions are made and thus the American people would have a choice about what they are taxed on because they can choose what to buy. Also, criminals who are not taxed at all right now (because they don't report their income) would be paying taxes when they purchase retail items.

I think that these reasons make the FairTax better than what we have now. Do they make the FairTax the best solution? No. However, you have to start somewhere and the FairTax could be a place to start.

by Matthew

# re: A proper gander at the FairTax@ Thursday, July 24, 2008 12:18 PM

the 23% fairtax rate is lower than the current government taking 40%-50% from the working class because the 23% assumes that the rich do not do any loopholes.

The fairtax rate would go up to 50% if the rich do loopholes like they currently do.

"No longer would taxes be hidden with corporate taxes as all corporate taxes would cease."

Corporate taxes are leveraged after the employee expenses are paid, so corporate taxes does not have a huge effect of the hidden tax.

"Also, criminals who are not taxed at all right now"

What are these "criminals?" Are you anti-agorist?

by re: A proper gander at the FairTax

# re: A proper gander at the FairTax@ Wednesday, February 3, 2010 4:55 PM

Also, this was not mentioned: As everyone here probably knows, a trade is one saying what you are offering to me is more valuable than what I am offering you, and vice versa. So by putting money into the economy, you are helping others out. Why be penalized for a good deed. Also, one man's business may be a service requiring the purchase of only one item every now and then and he makes $100,000 a year or less. Another man may do concrete work, and have to pay for steaks to set up, wood for forms, concrete, sealer, stamps, color, and labor. All of these things will be taxed. He may make $500,000 on papers at the end of a year, but only takes home less than the man making $100,000, and is being taxed a lot more than he is and penalized for helping society and the economy. All taxation is unfair; there should be no government to fund anyway, especially one that forcefully takes our money. "Government is the negation of liberty"- Mises.