A FAIRTAX TALE ....

I have a little scenario I would like to paint for those of you out there
who just insist on finding something wrong with the FairTax. Admittedly,
the FairTax isn't perfect. No tax plan is. How, after all, can you come up
with a perfect way for a government to take its operating funds from its
subjects? If you know an easier and more equitable way to do it, by all
means, let me know!

I'm going to ask you to crank up your imagination for a moment here ... and
by "you," I mean those of you who think that this FairTax thing
is a bad idea and you're not prepared to come on board.

I want you to imagine a scenario. Don't worry about whether or not this
scenario is possible .. Just accept it as I present it, and then consider
the alternative picture I'm going to also present. Simple as that.

Let's imagine that the FairTax is the law. We've been operating under the
FairTax since the day you drew your first paycheck. It's all you know. Here
is your imaginarily "reality."

    * On every payday you get your complete paycheck. There are no
deductions. If you earn $2,000 per week, you get a check for $4,000 every
two weeks.
    * You never have to save receipts or create any records pertaining to
federal taxes.
    * You can invest money without paying any taxes on it.
    * You don't have to pay taxes on the money you earn through your
investment portfolio.
    * You pay no taxes on any money you put in your savings account.
    * When you die you get to leave your entire estate, everything you own,
to whomever you wish. The federal government will take no taxes from your
estate. Your death is not a taxable event.
    * When you go to the store to buy an item, and the price tag says
$19.99, you will had a $20 bill to the cashier and get one penny back. The
price tag is the price.
    * There are four people in your household. You, your spouse and two rug
rats. At the beginning of every month you get a check or a credit to your
checking or charge card account in the amount of $506.00 to compensate you
for the federal sales taxes that are included in the price of everything
you buy; right up to the poverty level.

All in all .. not such a bad deal. You keep all of the money you earn and
you get five hundred bucks a month from the feds. Plus .. you only pay
taxes when you spend money.

Now .. .here comes some politician who has a grand scheme for a new tax
system. He wants to explain it to you. Here's his great idea ..... give him
a listen and tell us what you think.

The plan is simple. First the federal sales tax is going to be removed from
the price of everything you buy. This will mean that everything will cost
23% less than it does now. But ... he's going to levy an income tax on
every single individual and business who plays any role at all in bringing
those products to the marketplace. These people and companies are all going
to pass the cost of these taxes down the economic line to the final
consumer of the products they manufacture. These taxes will end up embedded
into the prices of products in our retail marketplace, bringing those
prices right up to the current level. So .. no loss, no gain.

Next your political benefactor is going to take away your $500 per month
prebate from the government. In its place he's going to tax every penny you
earn. It doesn't matter where the money comes from. Your salary, your
investment income, winnings at the track ... whatever you earn and however
you earn it, it's going to be taxed.

Wait! He's not through. He's also going to tax your wages for Social
Security and Medicare. He's going to try to soften the blow by telling you
that your employer is going to match the taxes he takes out of your
paycheck, but you're employer has made it clear that this money is all
going to come out of the money he has budgeted to hire you. You'll probably
lose out on your next raise while the boss his accounting in order.

There are some more nifty ideas in your congressman's tax reform plan. When
you die your family is going to have to file a complicated estate tax
return. A huge amount of the wealth you have managed to build during your
life is going to be sent to the government. Your survivors may well have to
sell the family business in order to come up with the money to pay for
these death taxes.

One more thing .. you're going to have to keep records of all of your
financial transactions. Every year you're going to have to spend no less
than about 30 hours or spend hundreds of dollars to hire someone to fill
out tax forms for you. If mistakes are made you will be hit with a huge
penalty and interest. Oh .. and the government is going to have access to
all of your financial records to make sure that you are paying everything
you "owe."

The question, of course, is why does this politician want to change the tax
system in this way? Power, that's why. They want to be able to enact little
changes to the tax code that will benefit certain constituents .... which
constituents will then benefit the politicians -- with money or with votes.
Under the FairTax system these politicians have no power to favor one group
of voters over another for the benefit of votes. The new system would give
them that power.

Your choice, my friends. If we had the FairTax now ... would you be willing
to make the switch?

--- Thunderbird 1.5.0.10 (Windows/20070221)