“A tax system is only fair if the wealthiest among us pay their
fair share.” – Barack Obama, Hillary Clinton, Bernie Sanders, Nancy
Pelosi - pretty much every Democrat in front of a microphone last year.
“With a rebel yell, she cried more, more, more.” – Billy Idol.
mythical “fair share.” If we could only figure out what that means.
There is no specific demand, only a general call for more. While the
wealthiest 1% of Americans pay half of the country’s income taxes and
45% pay no income tax at all, there seems a blatant perversion of the
word “fair” in it all. In a debate with a “fair sharer”, it becomes
evident that they don’t hate that successful people aren’t paying enough
as much as they hate that successful people exist.
Bernie Sanders. If not for shenanigans inside the Democratic Party,
Sanders might have been the first viable Socialist candidate for
President in our nation’s history and his popularity was based entirely
on the idea that equality is to be found in eliminating the rich. His
was not a message for creating general prosperity through work and
sacrifice, it was one celebrating all the possible giveaways he could
bestow from a greater confiscation.
Unfortunately, the argument
that higher earners should pay a higher percentage of their income in
taxes has some merit. Their contributions are supporting a system that
works for them. A strong military benefits those who have things - those
who have nothing don’t need it protected. Further, keeping the less
fortunate fed and sheltered helps eliminate the possibility of what
happened in Russia in 1917 and has happened in so many other places ever
since. Pay something now so you don’t pay everything later, comrade.
that, a tax system that is truly flat – taxing all citizens equally –
is no longer possible. Get over that dream so we can move on. The Fair
Tax accounts for this reality with a monthly reimbursement for the sales
tax paid on necessities called the Prebate. Every household would
receive a monthly check or, more likely, a monthly bank deposit. The
monthly Prebate in 2016 would have been $226 for one person up to $1009
for a couple with seven children. (The Brady Bunch after Oliver moved in
and made the show unwatchable.) The expense of these payments would
constitute about 3%.of the 23% inclusive sales tax rate estimated by the
What this means is that people living at the poverty
level buying only the necessities of life would pay the tax at the store
when they purchase an item but would receive that tax back every month.
Why not just exempt life’s necessities from the tax? For a few reasons.
First, if you do that, you start picking winners and losers. With a 23%
rate, although prices won’t change substantially because of the
elimination of the imbedded costs of the current tax system, the favored
items would suddenly be 23% cheaper and think of all the games
politicians could play with that. Better to just tax everything, let
people decide what they want to buy, and Prebate back the tax on what
would be necessities.
A second major benefit of taxing everything
and giving Americans a Prebate is that people here illegally will not
get it. Whether or not Mr. Trump’s wall slows illegal immigration, when
people do come here illegally, they will pay the tax and help support
our system. If an illegal immigrant family of three live and work here,
they essentially would be paying a penalty of $531 per month by not
getting the Prebate. They pay nothing now, by the way.
Fair Tax, the working poor would instantly find themselves in a richer
world. They would immediately start keeping their entire paycheck – no
payroll tax deductions – would likely get a raise as their employer also
would not have to pay payroll taxes on their behalf, and would get a
check in the mail every month from the government. All of this and the
prices of items at the store would not significantly increase.
so, that won’t be enough for Progressives. Even with the Prebate, and
even if it can be demonstrated that everyone, especially the poor, would
be better off under the Fair Tax, Progressives will oppose it because
it reduces government power and control. One need only look at the inner
cities to see that liberals do not care whether Progressive programs
make peoples’ lives better, they only care that there are omnipotent
This is where I make a proposed supplement
to the orthodox of the Fair Tax to make it harder to argue against – an
additional luxury tax on high-priced items. Not a tax on items
themselves, a tax on the price of items. Take automobiles, for instance.
If a luxury tax is imposed on all cars costing over $30,000 of 10% for
every dollar over that amount, a $40,000 car would cost $41,000. It
would provide a little more revenue, would help satisfy liberals, and,
let’s face it, if you’re able to spend $40k on a car the extra k ain’t
gonna be a deal breaker. You have more money anyway because of the
elimination of the old tax system.
I know, not uniform and not
really fair in the traditional meaning of that word, but do you want to
talk theory for another decade or do you want to get something done? The
Fair Tax had great initial enthusiasm but has maintained at about the
same level of support since 2008. Most people have still never heard of
it. Time to move forward and that will take some tweaks.