If you haven’t seen “UnFair the Movie”, I highly recommend getting the DVD. John Sullivan, the same producer of “2016: Obama’s America” and “Expelled: No Intelligence Allowed”, took the unfair title from the language of the left. Polling shows that Americans respond very favorably to the term unfair. UnFair the movie was released “Michael Moore” style with a great grass roots promotion of this documentary which focuses on the abuses of the IRS.
What we have here is an IRS which is not about revenue but about intimidating and harrassing people and is all powerful controlling our politics, faith and the economy. The current system is not just unfair, it’s immoral. It violates at least four areas of the Constitution. First amendment religious and political expression is violated by the “Johnson Amendment” which seeks to regulate churches and 501c organizations via their tax exemption status. The fourth amendment guarantees the right to privacy- yet we have a totalitarian IRS which says you have 2 weeks to give us all of your personal info for an invasive audit. The Bill of Rights also guarantee the right to a jury trial and innocence until proven guilty. Not with our “friendly neighborhood” tax man which makes you jump through all of their hoops and then you are assumed guilty and have to prove your innocence at great expense to yourself.
While the movie touches on the basics of the Fair Tax(HR 25) as an alternative way to bring in revenue, I want to take a look at how it compares to the current tax system or a flat income tax. There really is no comparison, the Fair Tax blows away the commie inspired tax on the fruits of our labor.
American roots: First of all, a national consumption tax is more compatible with the vision of our Founding Fathers as it is less coercive and has a built in limiter. In Federalist Paper 21, Hamilton notes that if the taxes get too high, people don’t buy the product and revenue drops. On the other hand, the progressive income tax was number 2 on Karl Marx’s communist manifesto and was constitutionally banned by the Founders until 1913 and the 16th amendment which started out as a “soak the rich” flat tax. Karl Marx wanted to redistribute wealth and discourage productivity via the tax system and would be proud of the IRS.
Simplicity: The original flat income tax has evolved into 72,000 pages of confusing codes given by politicians to help their friends and hurt their enemies. The Fair tax is more transparent at 133 pages and would only require about 20 million tax filers while reducing compliance costs by 90% saving the economy 250 billion annually. That’s one trillion injected into our economy over 4 years that could go towards something productive rather than filling out paperwork that will sit in a warehouse.
Fairness: The prebate untaxes the poor and gets rid of regressive payroll taxes and brings trillions from the illegal underground economy into the tax system. It also gets the government out of regulating religion and speech and violating our 4th amendment right to privacy.
Reform: Abolishes the IRS and the 16th Amendment thereby removing crony politicians from the business of picking winners and losers in the economy. Currently corporations which can afford to lobby Congress give themselves huge tax breaks over their small businesses competitors who are hurt by this type of corporate welfare. In addition, it makes our taxes transparent and will help to keep our representatives more accountable as consumers will see how much their government costs them every time they make a new purchase and they will tell their representative to vote NO a lot more often.
Grows the economy: IRS punishes productivity and discourages labor, manufacturing and investment. Under HR25, America becomes the world’s largest tax haven and manufacturers will swarm back to our shores as evidenced by polling of major overseas companies. Investors and corporations will go from being the highest taxed in the world to paying zero taxes. Unbeknownst to Hillary, businesses actually are the only engine creating jobs and making the economy work and they should not be penalized because of their success.
The Fair Tax get’s rid of the 22% embedded income tax costs on all American made products. No more competitive advantage for imports while hurting our exports. By leveling the playing field, American manufacturers would have a renaissance of expansion and it is WTO compliant. If other countries adopt the fair tax first, they will gain a huge advantage and we will have to play catch up.
The time has come for Lois Lerner and the other thugs in the IRS to be abolished and replace that corrupt crony regime with a tax system that will bring America accountability, growth and above all fairness.
If this were instated, I might start my business back up and start paying taxes again.
If HR25 were passed, there would be no taxes on businesses or investment, just on point of sale transactions. It is endorsed by 74 congressmen and UnFair the movie is giving it new momentum. Go out and see it!
Great article, Paul. For clarification, the movie Unfair:Exposing the IRS was shown as a single night event in around 700 theaters nationwide on October 14. The DVD will be released in January. The book of the same title, written by the movie’s writer and producer, Craig Bergman, will be published and available before Christmas.
If you’re going to steal from people, do it in the least economically destructive way. But the fairtax will sadly never pass as a replacement for the income tax. Connected business interests need the tax code as part of the bulwark to keep from having to compete in a free market. The parasite class in turn needs the tax code to siphon off resources from those interests.
The entire economic function of government is to protect capital from the free market, which, if it existed, would tend to disperse capital, and make amassing and maintaining capital solely contingent on providing the consumer with the best and cheapest product or service. That is exactly the scenario that big business and outfits like the Chamber of Communists want to avoid at all costs.
So sadly, no fairtax will eventuate as a replacement for the income tax.
But it will come, as a supplement to the income tax, and with many carved out exceptions of course.
“No one hates capitalism more than capitalists” – Steven Horwitz
Although I agree we need to end the IRS and the current tax system. There is a better system than the proposed “Fair Tax”. The four canons of a “just” tax system as outlined by Adam Smith are: Minimal (small), Convenient (low cost in their collection), Uniform in their distribution (same rate for all), Certain and not arbitrary (transparent). The APT tax system would be all of those and more in regaining our liberty and significantly reducing government power. The rate would be 0.2% on all financial transactions. That is $100 on $50,000 of transactions, as a opposed to 23% which is 115x greater. It is automatically charged whenever an electronic financial transaction takes place through the banking system. The fee is charged to everyone, both rich and poor, with no exemptions or prebates to redistribute the taxes collected. It is transparent because every individual and business would know how much they have to pay. An individual earning $50,000 per year, and spending the same amount in that same year would pay a total of $200. It would generate enough income to eliminate ALL other taxes we currently pay, and generate enough income to fund both the federal government and ALL 50 state governments. It would allow people to keep over 99% of their earnings. It’s time for major tax reform, but let’s make sure we ask for the right thing.
I agree that the percent is too high but the Fair Tax will bring greater transparency and accountability where citizens will tell their representatives to say no a lot more to spending. Also, the effective rate is much lower because of the prebate up to the poverty line which would make my effective rate about 12%.