In support of the Fair Tax

There are two main progressive systems of taxation: an income tax (which is what we have now) and a sales tax. Some people, particularly presidential candidates, are discussing which tax system would be best for the United States. With the income tax, you’re taxed on what you earn; with the sales tax, you’re taxed on what you spend. To learn more about these tax systems and to decide for myself which one is better for America at this point in time, I decided to apply, to both tax systems, the three requirements that a tax system needs to ensure fairness: total transparency, no exceptions, and simplicity.

Let’s start with the income tax system, in which you are taxed on what you earn. I don’t think that anyone would describe the current income tax system as being simple or transparent. The tax code is so complex and so many different ins and outs that I doubt there is a person on earth that understands it in its entirety. The tax forms are excruciatingly and meticulously complicated, and it is a widespread joke in America about how people dread April 15^th. And, because the income tax code is so complicated, it is easier for people to find loopholes and exceptions in the tax code (the rich people that can afford to employ someone to find the loopholes, that is) .

As for the sales tax proposal, it is commonly called the FairTax, and it is estimated to be a 23% sales tax on all new products (it would replace all other taxes). It abolishes the IRS, and it institutes a new “Prebate” system, which would provide that households would receive a monthly tax prebate, based on household size, for taxes spent on necessities (which includes various things: food, lodging, and transportation, among others), on spending up to the poverty level. You would have to register for the Prebate program (so, those who are rich probably wouldn’t sign up; it would be a waste of time and would probably be somewhat embarrassing to them to be getting that welfare from the government), and it ensures that the FairTax will be progressive and benefit the poor.

Let’s look at the three components necessary for a fair tax system: transparency, no exceptions, and simplicity. Does the Fair Tax meet all of these qualifications? In my opinion, it does: with the Fair Tax, you know exactly what you and everyone else would be paying in taxes (transparency), anyone who could do basic math could calculate their tax (simplicity), and the FairTax has no exceptions whatsoever (you are paid a Prebate for the necessities rather than getting an exception for the necessities when you buy them).

The FairTax, in my opinion, meets all of the qualifications of a fair tax system, while the income tax does not. The FairTax is the better tax system for the United States and would help the poor, while the income tax does not benefit the poor, and has become corrupt and exploited by the rich.

One Democratic Presidential candidate (Mike Gravel) and many of the Republican presidential candidates (Mike Huckabee, Tom Tancredo, Duncan Hunter, John McCain, Ron Paul, John Cox) and are in favor of the Fair Tax. But, progressive Democrats shouldn’t be put off about the Fair Tax simply because some Republicans support it. Saying that the Fair Tax is only reserved to the members of the Republican party is the same as saying that combating Climate Change is only reserved to the members of the Democratic Party. Both parties can appreciate a simpler, more transparent, more fair tax system, and both parties can appreciate the saving the planet is an important thing to do.

When examining the Fair Tax, along with all other new ideas that you may encounter, you should remember this quote by J.B.S. Haldane, “So many new ideas are at first strange and horrible, though ultimately valuable, that a very heavy responsibility rests upon those who would prevent their dissemination.”