Both my Father and older brother were Certified Public Accountants. Around the dinner table, the Internal Revenue Services was spoken of as the adversary. “Tax time” which used to mean a March 15 deadline was preceded by a period of long working hours. Over the years the tax laws became so arcane and dense they defy comprehension.

The income tax is probably the worst thing that ever happened to the United States in the last century because it was always punitive and regressive. It punishes saving. It deters economic growth through investment. It takes the wage earner’s money before he or she receives their paycheck.

There is nothing so powerful as an idea whose time has come and you can read all about it in Ken Hoagland’s “The Fair Tax Solution: Financial Justice for All Americans” ($19.95, Sentinel, Penguin Group USA). With notes and index, this book is a mere 151 pages and is small enough to fit into anyone’s pocket or purse. You will learn more about taxation in America from this little book than from several volumes of tax code.

Let me put the Fair Tax is perspective. In early March, The Washington Post reported that “President Obama’s proposed budget would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday.” As most people know by now, you can never trust any estimate of costs that the government puts forth unless you multiply it by a factor of two or three.

The U.S. is facing a financial Armageddon.

The projected deficit of $1.5 trillion “would force the Treasury to continue borrowing at prodigious rates, sending the national debt soaring to 90 percent of the economy by 2020.” Someone wants America to collapse and someone is doing everything in his power to ensure that happens.

Real limits on how much the government can borrow must be imposed. Limits on how much it can spend are needed. The claim that taxes only “soak the rich” is false because income tax laws are now destroying the middle class while most of the officially “poor” pay no taxes at all.

Hoagland is the Communications Director of Americans for Fair Taxation, the sponsoring organization for Fair Tax legislation. What he does not know about taxation is not worth knowing and what he does know he imparts with breathtaking simplicity and directness.

“Today we tax the very thing our economy needs to grow—income and that which produces income. We take money from savings, from returns on investment, and from what we are paid for our labor.”

The Fair Tax, which would replace only federal taxation, is based on what we individually consume. It is paid at the point of sale and it does not take earnings from one’s paycheck, nor punish you for having a savings account or for capital gains as the result of investing wisely. A Fair Tax says your money is your money.

The current tax system actually punishes corporations for being headquartered here. The U.S. levies the second highest (after Japan) corporate tax in the world. The result makes doing business in American far less competitive than in other nations. It forces corporations to collectively spend billions on compliance.

“According to the Tax Foundation, small businesses spend an astounding $724 in compliance costs for every $100 they pay in income tax.” Most people have to hire people to prepare their tax returns for them because of their complexity.

Enacted in 1912, over “almost one hundred years of congressional amendments, court decisions, and taxpayer/IRS disputes (the tax code) has swelled to more than 2.1 million words” and in fiscal year 2006 it was 16,845 pages.

When an earlier version of the income tax was proposed, it was repealed in 1872 and a later 1894 version was rejected by the Supreme Court as unconstitutional in 1895 because the income tax violated the Constitution’s prohibition against direct taxation (article 1, section 9). It took a Constitutional amendment, the sixteenth, ratified February 12, 1913, to permit it.

After that, Congress had an enormous source of revenue with which to swell the federal government.

“The cost of compliance, the hours and money spent on preparing tax forms, totaled close to $300 billion in 2008,” writes Hoagland. “That’s twice as much as the total of all the taxpayer stimulus checks mailed out in 2008.”

The result of the income tax has been “destructive, as politicians from both parties have taken us down a path of unsustainable spending.”

Despite what you will be told, the Fair Tax will collect the same amount of revenue as the income tax, but it will spread the burden more equitably and transparently.

It would literally eliminate any need for the Internal Revenue Service because it is a tax of 23% of what consumers spend “instead of an average of 30% of all the money they earn.”

No more gigantic, impenetrable tax code.

No more prying into the private transactions and earnings of citizens.

No more deductions for withholding and payroll taxes from your paycheck before you are paid.

No more punishment for saving or investing.

No more incentives for corporations to artificially keep salaries low or to move out of the nation to avoid harsh taxation.

Your earnings are your earnings. They do not belong to the federal or state government. With a Fair Tax, the more you earn, the more you keep, depending on how much you decide to spend.

That’s why it is called a Fair Tax and that is why the time has come to enact it.

Alan Caruba writes a daily post at http://factsnotfantasy.blogspot.com. An author, business and science writer, he is the founder of The National Anxiety Center

© Alan Caruba, 2010

 

WesternFront America

Another example of an out of control government.

According to the IRS, the Making Work Pay Tax Credit is the following. “In 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns. This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with modified adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly. ” (IRS.Com, 2009)

A much-vaunted approach by the NEW New Deal government we have in Obama. However, as with everything that starts with “FREE” all good things must end. Obama’s appointee Tim G. the tax evading head of the IRS is now reporting the following, “An estimated 15.4 million tax filers may be getting paid more of the Making Work Pay credit than they should, according to a report from a Treasury Department inspector general publicly released Monday. And that means they either will get less of a refund than they expected, or will actually owe money to the IRS on their 2009 taxes.” (CNNMoney.Com, 2009) I mean sure, the inspector general is not Tim- however, lets be honest what is the use of being in charge of the largest money scam of our time (the IRS) if you do not sign off on inspector general reports.

Yes folks, another example of a rogue government went badly. For almost 16 million Americans next year will be a truly bad year. After all thanks to bad funding decisions and TRILLIONS spent bailing out corporate interests so that those same corporate interests can lay off millions of people, now some of those millions of people will be receiving calls from the IRS telling them that if they don’t pay for the IRS’s mistake and do it NOW they will lose everything. Take it from someone who has had those calls. 5 years after a supposed “error” on my part, I finally received notice. Of course in the five-year interim the fees had built up astronomically, and guess what I no longer had any time to find out what the real problem was. Therefore, I set up regular payments to the IRS, being on disability SSI at the time made it hard, of course what made it harder was when the IRS again screwed the pooch and began deducting 45% of my SSI payments on top of the payments I was already making. Yes folks, the government you love to hate, or hate to love your call has caused more people to become jobless or homeless than any other entity through bad decisions and even worse leadership.

I digress however; let us concentrate on the almost 16 million more people who are about to get a wake up call and a reassurance that when they voted for Obama it meant being screwed yet again! Yes folks, I warned you all as did hundreds of other people who saw that the original New Deal politics ended with, you guessed it- our current situation! Lets recap, bail out and prop up major corporate interests under the guise of saving the economy- lose over 12% of American jobs as a result, than say “whoo hoo my plan rocks under it some  people (of the almost 6 million lost) have found jobs…” really? According to (CNSNews.com) - “At least 12,000 jobs “created” by President Obama’s stimulus package are summer jobs for young people.”  Oops, what- you mean he aint really helping us?

Now let us take another approach, let us just say that these major businesses fail completely. Now all of the sudden there is a vacuum for this business type and true to American ingenuity several small business springs up to fill the gaps. So now, instead of losing jobs we have allowed competition and the true American capitalist attitude to succeed where government has failed. Unfortunately, this is but a dream, your government has instead sold you out forcing you to become socialists all the while blaming capitalism.The first time was in the 30′s and the now again they are bailing out aging giants that should be allowed to die, and they are doing it with YOUR money-

My answer here is- YOU LIE OBAMA and Company (that’s everyone voting for his programs, and working with him)

This Making Work Pay Tax Credit is just another example of the failure that occurs when you allow or encourage some subpar wanna be politicians to begin making business decisions. Sorry folks, who remembers the Constitution, who remembers the days when you could own a mom and pop place and be comfortable, who remembers what freedom really tasted like…

Remember in 2010- remember to vote for people who can and will take this country back and will hold to account the rampant BAD decisions being made at the top. For those of us in Arizona, its time to get rid of John McCain and bring in Jim Deakin!

Originally posted at Examiner.com © Jesse Mathewson

 

WesternFront America