Karl Marx Preached "Fairness" Too

By Alan Caruba

My father was a Certified Public Accountant and dinner time throughout my youth was filled with horror stories about the Internal Revenue Service (IRS) as he struggled to keep up with a tax code that just kept growing.

According to Nina Olsen, the National Taxpayer Advocate for the IRS who heads a staff of 2,000, the American tax system is “a huge convoluted mess.” Despite efforts to determine its length, it is variously estimated to be between 65,000 and 70,000 pages. “We looked at how many changes in the tax law (that) had occurred in the last year alone,” said Olsen, “it was something like 579 changes.” No one can keep up with that volume of changes, not even Ms. Olsen’s office.

As this is being written, President Obama is dominating the news cycle with his message of tax “fairness”, attacking men like Mitt Romney, the presumptive Republican candidate, for being wealthy and citing men like Warren Buffett and other millionaires and multi-millionaires who say they should pay more. It is a longtime populist, progressive message and it is a false message.

Chris Edwards who studies tax policy at the Cato Institute, a libertarian think tank, says, “What happens when you raise taxes for higher-income people; they reduce their productive activities—like working and investing and starting businesses—and they increase their unproductive activities—like tax avoidance and tax evasion. So governments really shoot themselves in the foot if they raise rates too much.”

If it were not for “taxation without representation” Americans might still be “subjects” of the British Empire because, as any school child can tell you, the Revolution was fought over this issue and was kicked off in earnest by the Boston Tea Party when a tax on tea enraged the citizens of that time. There were, in fact, some ten other tea parties in the colonies.

The United States has the dubious honor of having the highest tax rate on corporations in the world. And some people still cannot understand why U.S. corporations are shipping jobs overseas and foreign corporations are reluctant to set up U.S. headquarters here.

In a recent opinion in The Wall Street Journal, Amity Shales, a former WSJ reporter and now the director of a George W. Bush Institute project on national economic growth, wrote that “The trouble is that lawmakers (especially at the federal level) insist on discussing fax reform in terms of fairness. Tax competition earns a mention from time to time, but only a mention.” She pointed out, as have others, that “states with no income tax grow faster than those with high income taxes.”

By framing the tax debate in terms of fairness and attacking Mitt Romney’s wealth, President Obama is pandering to his greatest constituency—the stupid among us. He was elected on the basis of a lot of gauzy, vague promises of hope and change, and with the adoring support of the mainstream media.

Obama’s problem is not about fairness or taxes. His problem is 13.9 million unemployed Americans, not counting those who are not looking for work or those working part-time jobs just to make ends meet. As a recent commentary on EconomicCollapse.com pointed out, “The number of unemployed Americans is larger than the entire population of Greece.”

The onerous, insane growth of the regulation industry at all levels of government is crushing the economy. “The U.S. national debt has increased by more than four trillion dollars since Barack Obama took office” and, with the aid of a Democrat-controlled Congress for the first two years of his term, he increased the national debt more than all the presidents combined from Washington to Clinton.

Believing that taxing rich people will close the gap is unbelievably stupid. As a Wall Street Journal editorial pointed out on April 10th, “The Obama Treasury’s own numbers confirm that the tax (on the wealthy) would raise at most $5 billion a year—or less than 0.5% of the $1.2 trillion fiscal 2012 budget deficit and over the next decade a mere 0.1% of the $45-43 trillion the federal government will spend.”

There is an alternative. It’s called the “Fair Tax” and you can learn more about it by visiting the website of the National Taxpayers Union.

By bleeding jobs through an insane tax system, a federal tax code filled with loopholes that even the IRS cannot keep up with, the highest corporate tax in the world, an idiotic immigration policy toward illegal aliens, and a burden on the fortunate few that still have jobs the United States is digging itself into financial collapse.

The federal government is broke. The states are broke. And with the advent of $4 and $5 gas pump prices—thanks to Obama’s anti-energy policies—the rest of us are getting more broke.

President Obama’s blather about “fairness” is straight out of Karl Marx’s “Das Kapital” and the Communist Manifesto with their emphasis the redistribution of wealth and the end of private property.

© Alan Caruba, 2012.

The VAT is not a FAIR Tax

The Value-Added Tax is a European idea and it just feeds billions to any government that imposes it. It is not a Fair tax that is an across-the-board tax on consumption whether you are rich or poor. A Fair tax could eliminate the income tax and still fund the government's needs. A VAT just gives government more money to waste.

We Want a 'Fair Tax" Now!

By Alan Caruba

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, 2010