The "Fair Tax" Pfffft

Let's start this out with the wisdom of scholar Murray N. Rothbard:

"There can be no such thing as 'fairness in taxation.' Taxation is nothing but organized theft, and the concept of a 'fair tax' is therefore every bit as absurd as that of 'fair theft.'"

In case you haven't heard of it before, the Fair Tax is a scheme by talk show host Neil Boortz and Congressman John Linder. (Scientology comes to mind here. I'd regard a tax plan invented by a radio talker and a politician with the same suspicion that I'd regard a religion founded by a science fiction writer.) In effect, this bill would abolish the income tax and IRS and replace them with a 30 percent sales tax on goods and services. Just to show you where I'm going, this would add $6,000 to the price of a $20,000 car, or 30 cents to every dollar you spend on groceries. I don't know why its called the fair tax. This tax certainly wouldn't be fair to the poor. Thirty percent of everyone's purchasing power would just go down the toilet. Maybe Barbra Streisand wouldn't notice that hole in her infinite cash flow, but Joe Blow, working from paycheck to paycheck to put food on the table, certainly would. Supporters of the fair tax say you would bring home 100% of your paycheck, but I find it very difficult to believe that employers would switch the money they had been paying to the government to your bank account. For instance, if you were making $80,000 and taking home $60,000, they'd just keep that extra $20,000 and you'd still be taking home the same paycheck. Boortz claims the poor would not become disadvantaged under a flat tax because they would receive monthly "prebate" checks covering the approximate national sales tax for necessities. Oh, great. Yet another welfare program. Yet another distribution of wealth. The Fair Tax would make even more people wards of the state. Millions of people who never took a dime from other taxpayers in the form of food stamps, SSI, AFDC, Medicaid, WIC, or housing assistance would now be on the federal dole via the prebate. And if the IRS weren't around to keep track of income, how would the government know who is poor and who isn't? Sounds like another gigantic bureaucracy would have to be formed to keep track of all of us. How is that different from the intrusiveness of the IRS? Another quote from Rothbard:

"On the free market, everyone earns according to his productive value in satisfying consumer desires. Under statist distribution, everyone earns in proportion to the amount he can plunder from the producers."

But my first and greatest gripe with this tax is it would keep the power of individual taxation in the hands of the federal government. If the Founding Fathers had intended that, they would have put it in the body of the Constitution and there would have been no need for the reviled 16th Amendment. Taxation on individuals should fall under the power of states -- if they even need to tax their citizens. Seven states have no state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two others, New Hampshire and Tennessee, tax only dividend and interest income. The Fair Tax just allows the federal government to confiscate the wealth of American citizens less intrusively and more efficiently. Who would collect this sales tax? Well, everyone who does business with the public, of course. Every shopkeeper, every chain store, every restaurant, every car dealer, every hospital, every massage parlor would become an agent for the federal government. As though there weren't enough of a burden on business, imagine the costs of keeping track of this nightmare. And who would make sure these businesses would accurately keep their books and truthfully report their sales? Who would prevent fraud? Sounds like another gigantic bureaucracy to me. Maybe they'd carry guns. And they would need those guns, because this plan would create an entirely new breed of criminals. It would be prohibition all over again. Black markets on every imaginable product would pop up all over the country. Since this tax would apply only to new merchandise, many items would be reclassified as used. And what would happen to the price of used items? They'd go up. The wealthy would simply purchase their high ticket items offshore. Want a three-million-dollar yacht? Buy it in Taiwan. Since business to business transactions would not be taxed, why wouldn't everyone just get a business license and not pay any taxes on anything? The potential for fraud is endless. The Founders intended to impose internal taxes on consumption by way of an "excise" or "duty." Congress was required to select each specific article for the imposition of the excise or duty and then, to determine the specific amount of tax on the specifically chosen article of consumption. The Founders never intended to grant authority to Congress to lay the kind of tax described in the so-called Fair Tax and it is not within the historically documented definition of the use of an excise or duty, and therefore, this tax would be unconstitutional right out of the chute. Finally, the Fair Tax is a bill. Beginning with the next Congress, they would begin to tamper with it, and would never stop. There would be nothing to stop them from raising the tax rate or from even reestablishing the income tax. What we need is a constitutional amendment repealing the 16th amendment. I haven't even scratched the tip of the iceberg. I could keep this up all day, but you know how I feel about lengthy blog posts. To sum it all up: The Fair Tax -- Not for it.