Subject: Fair Tax Comment: As a Certified Public Accountant, I support the plan to abolish the I.R.S. and the income tax and replace it with a national sales tax. Elimination of the Federal Income Tax on individuals and businesses and the replacement thereof with a National Sales Tax is the only genuine route to a fair and just tax system. The taxation of revenue generation has served only to burden the taxpayers with costs of compliance and of implementation of tax reduction strategies. Income taxation has allowed politicians to obfuscate the actual costs of government to the citizens. It has enabled the hidden social engineering agenda of political elites. It has allowed the politicians to clandestinely redistribute income according to their own peculiar notions of fairness. It has deprived the individual taxpayer and the taxpayer’s family of the unfettered use and enjoyment of earned income. It has stultified formation of capital and associated economic activity. Income taxation has necessitated and facilitated the intrusion of agents of the government far too deeply into the private lives of citizens and businesses. Taken in sum, after social security and welfare, income taxation is the most obstructive and destructive force applied to the citizens of this federal republic in its history. There is no fix. We have long understood that the act of applying a tax guarantees the reduction of the object of the tax. Any activity which by its nature reduces income cannot provide sufficient good to overcome that reduction. It is inherent in the taxation of income that it must perpetuate, if not continually exacerbate the malignant side effects discussed above. We have ample evidence of the futility of applying remedies to ameliorate the negative impact of the income tax in the very complexity, density, and sheer bulk of our opaque income tax statutes and regulations. Taken together with bizarre and tortuous judicial interpretations, the result is a Byzantine pile which beggars compliance. Tax avoidance, not to say evasion, is therefore weighted in favor of the high income individual and business who can afford to hire tax wonks like me to find a way to nullify the manifest intent of a piece of tax code and reduce its impact on a client’s income. Not only should this malignant tumor on the economic and political body of the country be excised, the Sixteenth Amendment to the Constitution should be repealed, lest the temptation to try income taxation again prove too much for the politicians of some future time. The Internal Revenue Service is a gargantuan pestilence which has ostensibly no other function than to coerce compliance with an opaque and cancerous code. The Service apprehends diametrically opposed interpretations of the same bit of code in order to maximize tax due. It is infamous for overreaching its own authority to collect monies from taxpayers on the most dubious of issues. It arrogates the power to refuse compliance with the findings and interpretations of the Tax Court. The Service is the only enforcement arm of government exempt from the constitutional constraint of presumption of innocence. It cannot depend on its own computer system nor, indeed, its personnel to maintain confidentiality of tax records. It has been and will continue to be a weapon for incumbent politicians to punish the opposition. It is used as a cudgel by the left to restrict conservative political speech in §501 exempt environments, while allowing liberals to pollute churches, unions, and NGO’s, ad libidum. In the mind of the public, the IRS rates right along side of the Spanish Inquisition as a model of fairness and compassion. For all intents and purposes of the citizenry, the IRS is the American answer to the Nazi Gestapo and Russian Secret Police. It has no place in a republican federal system and should be disbanded. One could reemploy its minions as Border Patrol and ICE agents to much better effect for the citizens of our country. Please do not be dissuaded from the abolition of these political and economic malignancies. The blandishments of the Income Tax apologists are invitations to perpetuate a governmental disgrace. On the other hand, the National Sales Tax (Fair Tax) affords the opportunity to raise taxes on individuals by attaching itself to their purchases of goods and services. Sales tax is a genuinely voluntary tax (or as voluntary as a tax gets) because the taxpayer has the option of foregoing the purchase to avoid the tax. Since it is virtually impossible to exist in our culture without purchasing some durable goods, consumable goods, and services, the generation of tax is reasonably guaranteed. It has ever been the nature of the human being to acquire in proportion to his means, the tax is self graduating. Chevrolet buyers will be less taxed than will Cadillac buyers. Whatever the congruence of utility of the vehicles, the perceived value is reflected in the difference in the price of the vehicles. Wealthy purchasers may be able to control their acquisitive instincts sufficiently to content themselves with the Chevy, but most will purchase the highest perceived value which they can afford. Thus, the Fair Tax effect is self inflicted and completely without veiled government device. The mechanism for efficient collection of the revenue and the assurance of compliance is in place nearly universally across the country. The Fair Tax should be collected by the vendors of goods and services and administrated by the several state tax departments. The states should provide expert remittance, compliance, and audit services conjointly with their own sales taxation effort. Remittance by the states to the US Treasury should be monthly and should be audited by federal authorities. Exemption from the impact of the Fair Tax could be easily effected by issuance of an exemption card to be used not unlike the ubiquitous credit, debit, or smart card at the point of sale. Utilizing a smart card could allow the government to establish a continuum of exemption amounts by means testing the individual taxpayer or by exemption of a given class or classes of purchases for individual citizens. No tax returns need be filled out by huge numbers of individual taxpayers, but rather Fair Tax collections would be reported and remitted by the relatively few vendors. Compliance, while a concern in rare circumstances, becomes an almost automatic proposition with the Fair Tax as the same process that records sales, records tax collections. The only downside, if you wish to view it as such, is that the citizenry will become acutely aware of the actual cost of government and would thereby be enabled in deciding if it is a good investment. Please take the Fair Tax forward. The abolition of the cancerous income tax and the institution of the Fair Tax must be the most important and most lasting benefits that you can provide to the country. |