I recently purchased The FairTax Book for two reasons: Because I believe that Americans could be paying far less in taxes if a more efficient way of taxing them existed and because the FairTax has been talked about more than once on this blog and I wanted to learn more. What I got when I purchased this book was not just the informative pamphlet full of facts and figures I had expected but rather a full-on call for a tax revolution.
I'm not going to go to far into the contents of the book. It is relatively short and surprisingly entertaining given the subject matter. I'd recommend that you read it for yourself as it wouldn't take all that long and is well worth your time. I'll simply illustrate here a few of the points I found the most interesting.
First and foremost among these is a perspective on our current tax system that I hadn't even considered before reading this book. The fourth amendment guarantees our right to privacy from unreasonable searches and seizures, yet the IRS has full authority to look into even the most obscure of my financial transactions based on nothing more than a suspicious whim. If some auditor at that bureaucratic feels the need he or she can force me to lay open my personal finances so that they can see if I've been spending my money at church bake sales or strip clubs. Which is, of course, none of their damn business. But in order to enforce our current tax system they are invested with the power to know.
Something else I hadn't considered before is just how deceptive the tax refunds most of us receive from the government are. We are all grateful for that check at the end of a tax season, but do any of us really know just how much money we gave our government or is that little refund masking it? I'd advise all of you to go and gather up some of your paychecks and apply a little simple arithmetic as to how much you give to the government each pay day. I think you'll find that your "refund" (hard to call it that when its your money to begin with) is a paltry sum compared to what you're paying.
The FairTax system would also make fraud a lot more difficult than it is now. Our current tax code is so ungodly complicated that its difficult for IRS auditors to investigate and catch people who aren't paying their fair share. Its also so complicated that a lot of well-meaning people are also probably guilty of not paying their fair share without even knowing it. Because the FairTax system is so simple its much, much harder to game the system. After all, you pay it every time you purchase something. Everybody has to buy stuff, even criminals.
One thing about the plan that did confuse me, however, was the talk of a prebate. A prebate in the FairTax system would be a monthly check from the government calculated to cover the sales tax you'd pay on necessities. Like bread. Milk. That sort of thing. What I don't understand is why we'd need it. It seems to me that the increase in the price of goods we'd see with a national sales tax would be effectively offset by the increase in our paychecks once the payroll taxes were done away with. Add that into the fact that the prices of a lot of goods would go down once businesses felt the effects of a lighter tax load (less bookkeeping expenses, no businesses taxes, no payroll tax withholding) and the prebate seems like unnecessary complication.
That aside, though, this book has converted me. Before reading it I the only thing I was certain about with regard to this country's tax system was that what we have now just isn't working. Now I'm a FairTax backer. This system would be such a vast improvement over income tax that anyone who opposes has to be putting partisan or private interests above the interests of the people of this country.
You can learn more about the FairTax (and get a lot of questions about it answered) here.
By Rob Port of Say Anything.