Time for Tax Revolt

It's time for taxpayers in America to revolt. And a great solution is on the table. If you haven't studied the Fair Tax plan even half-heartedly, you have no standing in a debate about it. But I have to tell you, I am for it 100%.

For one thing, this country spends a lot of time grabbing money from honest, hard-working Americans and businesses while turning a blind eye to the people who work under the table (like Deadbeat Sperm Donors) so they don't have to pay taxes. Believe me, it takes a great deal of time to calculate and pay payroll taxes each month and reports every quarter. Time is money -- and oh, yes, your employer matches what you pay in Social Security and Medicaid Taxes. Plus, a big corporation pays taxes on its earnings and has to pass that amount on to its customers as an embedded cost. It then sends out dividends to stockholders who in turn pay taxes on what they receive. Can you say double taxation? The consumer pays embedded taxes on the corporation's earnings when the product or service is bought and then the stockholder pays tax on the same earnings again when they are distributed.

Secondly, the IRS has too much power. I don't know anyone who files a tax return with intention to defraud the government. About 23 years ago, my husband served as executor of his mother's estate. He set up the estate account at the bank where we had our personal accounts. The bank sent the IRS tax reports with my husband's personal tax ID number rather than the estate's ID number. The IRS sent us a threatening, nasty letter about under-reporting income and the penalties we could face. My husband called and explained the situation, to which the IRS rep said, "Don't you think we hear that story all day long? You need to send us the money you owe." So we did, along with a letter explaining everything. We also had the bank send in corrected papers. At the time there arose a lively, national discussion about Taxpayer's Bill of Rights. The IRS sent us a check for the amount plus interest and a sickeningly sweet letter that didn't apologize but explained that "these things happen."

Third, no one in the IRS is accountable. Ever ask a tax question of the IRS and get an answer, and later you call again with the same question and get a completely different answer? All the good folks there are just doing their job and interpreting the 55,000 pages of tax codes to the best of their ability, so don't hold their feet to the fire. But they can hold YOUR FEET to the fire and it's not pretty when you're in the sights of the IRS.

Lastly, the time and money spent having accountants dot the "i's" and cross the "t's" on tax reporting could be much better spent having them analyze the business financials and helping business owners make better decisions.

What I respect about the Fair Tax plan is that it taxes greed not need -- and it accomplished that in only 130 pages (that's a 99% reduction in the size of the code!). First of all, we would get to keep 100% of our paychecks! Then we would pay a 23% tax on goods and services we purchase. But before we spend a penny, we would receive a "pre-bate" to cover the taxes on basic necessities as calculated by the government's poverty statistics. The roughly 22%-23% cost that's embedded in every product would go away (remember I mentioned that corporations end up passing on their tax costs to the consumer) will go away to be replaced by a 23% embedded Fair Tax. The more we spend, the more tax we pay. It's truly progressive. I can't imagine spending almost $70,000 for a new car, but if I did the essential cost to me would be the same under the Fair Tax as it is today. A $56,000 with embedded (undisclosed) taxes today would run about $69,000. With Fair Tax I would know that I was paying $12,880 in taxes on that $56,000 auto. On the other hand, if I could only afford a used car, I wouldn't pay any extra in taxes because it will already have been taxed when it was sold new.

Now if you're thinking Barack O'Bama's "change" will help alleviate the tax burden, think again. Study it seriously. (Those are the same words Jimmy Carter campaigned on; the economy was in the dumps under his administration as was the situation in the Mid-East -- remember the Iranians releasing hostages to President Reagan his first few days in office?) Any plan that taxes savings is a bad plan. We need to encourage people to save so we can get ourselves and our country back on an economically sound footing.

And if you're wondering whether the country can afford a Fair Tax plan, consider this. When the Deadbeat Sperm Donor goes to buy his new Eddie Bauer Edition Ford Expedition or his Tommy Hilfiger outfit or a Prada purse for his girlfriend, he'll be paying taxes that he doesn't pay now working under the table. Plus, when European tourists visit America (our dollar is worth half the Euro), they'll pay that tax and we both win -- we'll benefit from the tax and they're still saving 27%. (I see a big Cheshire grin coming on!) One more thought. Can you think of any way to entice business growth in the great U.S. of A. than to make it the greatest business tax environment in the world?

Here are some good, concise articles on the Fair Tax:

Syndicated Columnist George Will

Syndicated Columnist Scott Burns

Bob Martin, Americans for Fair Taxation community coordinator for Eau Claire, WI

And here's a Fair Tax calculator for you.

Look. I don't mind paying taxes. It invests me in this great country. But I think we all need to participate and I know the tax system can be fairer. Definitely. It's time for a tax revolt.