A friend sent me one of those emails that always seems to make the democrat out to be a greedy pro-tax urchin and the conservative to be a friend of the poor downtrodden welder, specifically related to FairTax.org...so I sent him this...
I'm sending this from my personal email so I don't lose my job... and its a Big, long email…get ready.
That is a pretty propagandized email, pretty one sided toward McCain, and not very factual for either candidate. I’m still waffling on who I’ll support. I always liked McCain, but he’s being deluded by the religious right too much. Republicans need to shake those crazy people loose. I disagree strongly with Obama’s proposed increases and revisions to capital gains and estate taxes, because I have a lot to lose, and because that money that I stand to inherit isn’t mine, rather it belongs to my family. That’s Baby’s money. I like Joe Biden and I think he will add a good deal of moderation to some of those proposals. Remember that Biden wanted to make personal finance responsibility an issue back when he supported legislation that would make it harder for folks to declare bankruptcy to shed credit-card debt. I’m big on fiscal responsibility.
I’ll hold judgment until I find out McCain’s running mate, but I think the god-mongers will dictate who he picks and that will end it for me. If he bucks the pressure, makes a maverick decision like the ones he’s been known to do for 30 years, and picks Lieberman or maybe Romney, and I’ll think about it…
I consider myself a social lefty and a fiscal conservative. That said, I think that our government is universally burdened by a lot of crap that I shouldn’t have to pay for, but I do not believe in the Fair Tax Plan either. I think most people who like the idea of the Fair Tax can only see the trees and not the forest. For you and me, Fair Tax wouldn’t realize much of a savings, and considering our penchant for buying cool new cars and satellite radio and I-pods and crap like that, we may actually pay more! Where Fair Tax fails, and where the money lost would hurt the most in government budgets is taxes on the rich and super-rich. Fair Tax cannot possibly re coupe the tax responsibilities of the Bill Gates and the Warren Buffets and the Paul Allens of the world, based solely on their purchases. Bill Gates was on NPR a few years back (when he made a record contribution to the UN and announced the formation of the Bill and Melinda Gates Foundation) explaining that he makes more money on interest than he could possibly spend in a year so why not donate it to a worthy cause? (Unfortunately, most rich do not make donations unless a tax benefit on income is involved.) Why wouldn’t we tax him as heavily as we do? He directly benefitted way long ago from small business development grants and local government assistance dollars for small businesses…programs which would suffer under Fair Tax cutbacks, and now I think it’s perfectly fair to assume that he needs to pony up and kick in for the next round of Steve Jobs and Larry Ellisons…it’s a good investment.
So in my estimation the net effect of Fair Tax would be…
1 - You and I would still have our burden, similarly unchanged from today only paid out incrementally as we bought milk and eggs and I-pods and 20 inch rims and EWRs. If we stopped buying toys, regressive taxes like sewer fees and storm water runoff fees and garbage collection fees, would take the place of direct tax dollars and we’d be paying anyway…only more, because…
2 - …The super rich wouldn’t pay nearly as much as they do now, (even though by Gates admission he can’t spend it fast enough) greatly reducing cash-flow at the federal level, because...
3 - You can only be taxed so much for purchasing a Bentley before nobody would ever buy a new Bentley again. Used luxury goods would be bought and sold at fudged prices to avoid taxation. New big-ticket products would languish unsold and become undervalued. Companies which drive valuable and strategic subsectors of the economy like shipbuilding…Boston Whaler and Hunter Yachts, and aviation…Cessna, Embraer and CRJ jets, would suffer because only used private yachts and jets would sell. In order to ensure the economic viability of new product manufacturing, and fair market pricing of existing goods and services, there would have to be some huge government machine created to make sure that private transactions for second hand items were properly valued and that Fair Tax was collected accurately…just another IRS with a different set of initials for us to hate. The government would still be heavily involved in collecting money from each of us. It is inescapable.
4 – Non-profit donations would dry up without the opportunity for income tax deductions. If I can’t write off my annual contribution to the United Way that I authorize my employer to make on my behalf, if that isn’t a pre-tax contribution, then I ain’t making it. Humane Society, MADD-SADD, NAACP, ACLU, WWF, Greenpeace, Amnesty International, hell even Fair-Tax.Org, would all be broke and done, whether we liked them or not. We mock the ACLU and Amnesty, but can you imagine being jailed for saying something unpopular and protesting in public and having nobody come to your aid? I like having non-profit watchdog organizations monitoring the actions of my government. It makes me feel safe at night when I know that unchecked government monitoring of my phone-calls, movements and conversations are called into question publicly by heavy-hitters like the ACLU. Tax deductable contributions fund many things that I cannot even fathom not having around.
5 – And finally…The real issue would still go unaddressed. Pay special attention here, because this is important...Middle-Americans feel like we pay too much for government programs which we, sitting in the comfort of our air-conditioned homes and drinking our glamour beers, feel are abused. We don’t want to fund an abused welfare system that gives single mothers more dough if they have more kids, rather we want people to get off their butts and get jobs. We don’t want to hear about our tax dollars going to abused federal funding mechanisms like Community Development Grant initiatives and Federal Housing programs and burdensome correctional reform programs and illicit drug use interdiction initiatives and many other government programs that we as mainstream Americans have what we believe is very little need for supporting and even less direct benefit from funding. Unfortunately, the perception, accurate or not, right or wrong, is that these programs support chiefly minority populations in our country. And therein is the rub…No elected official in our representative government would ever stand on the floor of the House of Representatives and say that which the frustrated taxpayer who is pushing for reduced tax burden would never say publicly for themselves…I’ll let you fill in the blanks with the rest of it because I think its pretty self evident what descriminating issues I’m getting at… This is where efforts like Fair Tax get traction. There's this perception that we will only pay for what we use under FairTax, and the reality is just the opposite. There will still be public insistance, and politicians who cow-down to it, that support be given to social concerns like welfare and food stamps for the 'lazy', no matter how abused the program is, and we as middle class americans will lose direct support of the institutions we use, and our standardized services will become fee-based regressive taxes to take up the slack. Welcome back to 30% taxes.
In short, “my friend” (as McCain is apt to say) Fair Tax is a hoax. A ruse. There will still be bills to pay for our government services. Roads will be needed, and schools will be needed, and the military will still be needed. Social programs will also live on…because in the end, politicians like the rest of us that they represent, will still fund programs that middle America sees as coddling the lazy and inept among us because no politician would commit political suicide to refuse to. Just as no American would put a sign in their yards claiming first hand responsibility for saying what and who they would and wouldn’t support funding for either.
I am against new taxes for retirement accounts, and changes to capital gains on investments related to family wealth inherited from generation to generation, but I do not see the harm in increasing taxes on gasoline, homes over 2400 (I actually think it is 2800) square feet, and tax increases for resource consumptions and services like water usage and sewer and garbage collection. I think the country would be better off if we took more responsibility for our individual environmental impacts on our own accord and out of our own sense of community responsibility, but that’s not the way modern America thinks. Forcing people to behave responsibly, like a mandated speed limit and a minimum drinking age, seems to be the only way that Americans are held accountable for their individual costs as citizens. We all want school but nobody wants to pay. We all want clean air and water and but nobody wants to pay. We all want to end homelessness and hunger and all those other bleeding heart feel good issues, but nobody wants to pay. Sorry man…somebody has to pay, and sometimes, it is in fact for something that we just may not like, in addition to that which we desperately need.
Here's a good example. Under the current structure, I give Kenn and Jay $1100 for a new EWR. They make money and declare their income and the government gets paid and some of that goes to policies that I don't agree with, but a good many that I do. Under Fair Tax...I would pay $1353 for my EWR...$1100 and $253 (23% in FairTax) in taxes. Nearly 1400 bucks!!! ERRRRRR! Sorry, but for that money I'd buy a used Fat Chance, lie about how much I paid for it to duck the Fair Tax, have the frame repainted and repaired as needed in some simplified barter system where no money traded hands but rather I just did some guy a favor using my own skills and had him do the frame work, again to duck the Fair Tax. Then, the government gets nothing, begins to lose money on things like police protection, transportation, trash collection and education, and now I get hit with a pure regressive tax like a drug abatement civil security fee for police funding, or an increased license fee for my car for road construction, or a book and library fee for the school, or a trash collection fee for my garbage. Wheres the improvement? The provision of government services still COSTS MONEY. That won't go away. Tax burden won't go away.
The Fair Tax website has this little nugget in there...which I think is telling. "...at some point, the voice of the people will eclipse the voices of the relatively small number of Washingtonians who profit working the income tax system at great cost to the nation. Enactment of the FairTax will require an activist citizenry and a resurgence of what has been too often forgotten--public policy can and should be driven by the public. All that is required is that we all dare to be fair and remind our elected officials that they work for their constituents." Yeah right. Sure. ...and suddenly politicians will become that much more in-tune with the individual constituant. That just isn't possible, because the reality is pretty clear, politicians speaking for us all in Washington and in our local governments are an average of the feelings and goals and wants of all of us. The reason they seem watered down and full of shit is that they are speaking at any given time for millions of very different people. That's just the compromise of representative government.
Don't even get me started on the 16th amendment. "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." That's a pretty well crafted sentence...Basically it says that I don't care who the hell you are or where you live, you're going to pay for your government, a government that tries to balance the needs of 350,000,000 people. It cannot address you alone. If you ever feel completely at ease with the policies and direction of your government, Matt...Run. Run away! I'll be right behind you, because something is terribly wrong.
Fair Tax is a ruse.