Saturday, July 29, 2006

Breaking the Code....

....The IRS Code that is. Over on my sidebar, under the "Pet Causes" heading, you will see a link to the website. I've been following the various debates over how to fix the tax code for several years. There have been efforts to reform or simplify the present code ranging from tweaking rates or deductions to replacement with a flat tax. They either haven't worked for long (1986 tax reform) or not gone anywhere (flat tax). The one thing all of the various proposals had in common is that they were all variations on how to tax income. What constitutes income has turned out to be a very elastic concept and the IRS Code is a system that is designed to be gamed. I think I've finally seen the solution to this problem. Stop taxing income. Tax consumption.

Congressman John Linder and Libertarian radio talk show host Neal Boortz have collaborated on the writing of a book,The FairTax Book. I bought a copy last year. It lays out the case for ditching the current tax code and replacing the income tax with a national sales tax. The details of how it works are best left to the book but some of the main points are:

The FairTax

  • Abolishes the IRS
  • Closes all tax loopholes and brings fairness to taxation
  • Maintains our current Social Security and Medicare benefits
  • Brings transparency and accountability to tax policy
  • Allows American products to compete fairly
  • Reimburses the tax on purchases of basic necessities for everybody up to the poverty line, so effectively the poor don't pay.
  • Enables retirees to keep their entire pension
  • Enables workers to keep their entire paycheck
  • Transfers power from Washington DC back to the people, where the Founding Fathers intended it to be (oh be still my libertarian heart).
A question about the FairTax was on the ballot in three Georgia counties during the recent primary election. Not only did it get people out to vote in what was otherwise expeced to be a low turnout primary, it garnered 85% approval. Just this morning, I listened to a rally for the FairTax held in Orlando, Florida streamed by AM 580 WBDO. Between 10,000 and 12,000 people showed up in the Florida summer heat to show their support for this. It's got legs.

I really urge you to get the book and educate yourself about this. Don't listen to those who criticize it after first rewriting it to say what it doesn't and then proceed to critique their strawman. Go to the sources. Again those are:
FairTax Groups and
The FairTax Book
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