The government has to have money to pay for the military, cover the cost of obligations we’ve made like Medicare and Social Security, and build roads, bridges, and airports. We need some things government does so clearly there has to be a tax process. But the one we have is a detriment to our economy. What if there was a tax plan that was flat, fair, and family-friendly? There is one. It’s called the Fair Tax, and it would super-charge our economy, but it is terribly misunderstood and opponents say it would raise your taxes. It wouldn’t. It’s pretty simple, really. You wouldn’t be taxed for your work, savings, inheritance, or good business decisions. The Fair Tax would be collected at the point of purchase instead of the point of production. The current tax system is essentially a penalty on what you produce. We tax your work in the form of an income or payroll tax. And if you work for someone else, your money is taxed before you even get it. It’s taken out of your check before you even cash it. Most people don’t have any idea how much they actually pay in taxes because they never see it. And how nice of you to let the government take your money and use it all year interest free. The Fair Tax is essentially a sales tax or more broadly a consumption tax. You only pay when you purchase something that is new and hasn’t been taxed before.
Presently we punish productivity and subsidize irresponsibility. If I invest in something that increases in value which means I made a smart investment, I pay capital gains taxes. But if I invest in something that loses money, I can write that off of my taxes. Get that? Successful investments are punished; failed investments are rewarded. Only the government could create something so absurd!
What makes a strong economy? Work, investments in businesses, savings—even putting aside money to leave for your family to get started with a house or a business. And maybe saving enough to give to charity at one’s death. But we tax all of that. If you spend all your money on stupid stuff or just don’t work, the government will help out with your medical bills and provide a check so you can stay home and play video games. Now here’s a simple principle: If there is a behavior you want more of, reward it; if there is a behavior you want less of, punish it. That’s how we raise children and train dogs. Do the trick and get the treat. But our tax system is the opposite of that. Punish productivity and reward irresponsibility.
The fair tax changes that by letting you keep the money you earn, invest or save. It eliminates the income tax, capital gains tax, and the death tax. You pay taxes when you buy something. And it completely eliminates the IRS. They would be disbanded. Don’t want to pay as much tax? Don’t buy stuff.
But you know who DOESN’T pay income tax, capital gains or inheritance tax like you do? Prostitutes, pimps, drug dealers, and gamblers. They don’t fill out forms in April and tell the government how much they made selling crack to Hunter Biden! So you are paying YOUR taxes and theirs. But if we paid tax when we purchased things, the prostitutes, pimps, drug dealers and gamblers would pay tax because they still buy stuff. Sometimes lots of stuff that you can’t afford.
The Fair Tax was created by a group of some of the most brilliant economists in the country. They were charged with proposing the fairest and most efficient form of getting the money the government needs without creating a tax code that is so complicated even the IRS doesn’t understand it and you need accountants and lawyers just to comply with it. With the Fair Tax, there are no tax returns. Nothing is taken out of your check. For most of you, for the first time in your life you’d get your entire pay check and April 15 would just be another beautiful Spring Day.
In the coming weeks, I’ll tell you more about the Fair Tax because there are a lot of people in government who don’t want it since it takes away the power to manipulate the tax code to reward political donors and punish political enemies. I feel pretty sure I can help you understand that the system we have now needs to be thrown out and a new plan put in place that’s fair, flat, and family friendly. And did I mention, it eliminates the IRS?