What Determines Fairness In A Tax Code?
Throughout history, each civilization has needed to extract funds through various forms of tax from its citizens to pay for the services provided to the citizens. Wise leaders knew that people were willing to pay more to a government if the government was perceived to be providing valuable and useful services.
While all taxation reduces our ability to consume, we have seen a change over time in the definition of fairness. Up until 1913, the U.S. was funded primarily through excise taxes, tariffs and duties. People paid these taxes based solely on their consumption because the prices of goods were increased by the amount of the excise taxes, tariffs and duties on the goods.
While the people earning lower income paid the same rate of tax as the people making much higher amounts of income, most Americans accepted this system and few attacked it as being “unfair.”
Over the past sixty years, increasingly there have been attempts to change our tax system to make it more “fair.” State sales taxes exempt food and other basic items. At the federal level, we have seen a constantly changing income tax code with different tax rates and deductions.
A lot of people believe that a tax system is “fair” if people making higher incomes will pay higher tax rates and, consequently, more in taxes than would be paid if the tax rates were uniform for all.
A flat income tax doesn’t fit the above definition of “fair.” If there is one rate, then people making more money will pay more taxes but not a much higher percentage of their income. The proponents of the flat income tax try to compensate for this by increasing the threshold amount of earnings that are not taxed. Some of these plans do not require any income tax until a family exceeds $50,000 of income.
Of course, a flat income tax still requires businesses and the rapidly growing number of the self-employed to reduce their gross receipts by their allowable expenses to obtain their net income that will be taxed. This will require retaining much of the present Internal Revenue Code and the IRS.
The Right Way To Define Fairness
In evaluating any tax reform plan, it seems to me that we should be asking if it is “fair” for a tax reform plan to:
• Reward savings and investment
• Allow people to receive their pay without federal tax deductions
• Stop rewarding imports and punishing U.S. exports
• Allow people an exemption for all purchases of new goods and services up to the poverty level
• Eliminate 90% of the compliance costs of the present income tax system
• Grow the economy much more rapidly than the present income tax system
• Create more higher paid U.S. jobs
• Raise money for the expenses of the government in the least costly and intrusive and the most efficient manner
• Allow the government to directly appropriate money to take care of people who need more of a safety net—not trying to accomplish this through more complications of the present income tax code
Most people will agree that the above is fair. Of course, people in D.C. have extracted large sums of money by obtaining special income tax code benefits. They don’t want simplicity but a continuation of what has been a very profitable activity for them.
Knowing the reason for the reluctance to do real tax reform, we know that the only way to accomplish our goal is to have constituents demand actions from their elected officials. They all want to keep their jobs and the voters determine that.
September Washington Trip
Peggy does an excellent job of providing you a briefing on our September trip to D.C. One thing that I believe is clear from these meetings is that we are finding more and more agreement that some form of consumption tax is needed.
We also saw that when constituents contacted their elected officials and requested meetings, the offices responded. This action is particularly effective when the constituent joins the meeting via telephone. The Member or staff person always starts off by confirming that the person on the phone is a constituent, but then it normally goes very well and they listen attentively as we explain the benefits of the FAIRtax.
Please contact your Member of Congress and ask them to meet with Peggy and me. Indicate that you would like to join the meeting via the telephone. As you get responses, please send them to Peggy at Peggy.Green-Ernst@FairTax.org.
1040 Club
Thanks to each of you who have joined the 1040 Club. You are ensuring that Americans For Fair Taxation can continue to promote the FAIRtax.
If you are not a member of the 1040 Club, or if you are a member but want to join for someone else, please go to this link and sign up.
FAIRtax Power Radio and Would Thomas Jefferson Think We Are Free
Whether you’re a FAIRtax volunteer or an informed citizen who wishes to be better informed, we encourage you to listen to FAIRtax Power Radio, the online radio show that is available when you are. The FAIRtax Guys discuss and analyze the problems with the current income tax system and the best replacement, the FAIRtax. We also have great guests periodically such as area business people, a Congressman, leaders within the FAIRtax organization and even Thomas Jefferson and Rod Serling (Program 19). FTPR is FREE to the listener on two different websites - SoundCloud (http://bit.ly/1KNsOof) and YouTube (http://bit.ly/1PZUFVU). Both SoundCloud and YouTube have free apps for smartphones so you can listen while you’re on the go. Our goal is to offer a discussion of the most thoroughly researched tax reform proposal, the FAIRtax, and make it seem like a family discussion at the kitchen table. Listen to our programs and then tell your friends and relatives about the show.
AFFT National LOGO Store and Scrolling Signs
Going into the primary system, it is even more important that all of us have FAIRtax signs that we can bring to political rallies. Many venues will not allow us to bring signs attached to metal or wood holders. That is why Rudy Treml designed and had printed the scrolling FAIRtax signs. Visit our National Store at www.fairtaxlogostore.org and purchase some Personal FAIRtax℠ Scrolling Handheld Event signs.
It is a handheld scrolling event sign printed in color on both sides with our new logo. When folded up, this banner is only 2” x 9” but opens up to a 27” x 9” presentation
which self-retracts. It is ideal for all political events and easily fits in a pocket, jacket or purse when not in use. To see a picture of this banner please click here.
Thank You For Opening The FAIRtax Chronicles, Our Sponsored Mailings
We plan to do several of these mailings each month. If you take a minute to open the sponsored emails and click through to the website, you are making an in kind contribution to AFFT. It is not required to actually make a purchase, but your minute of time will ensure that AFFT is paid ever larger amounts from people paying for us to send their offers to our supporters.
Again, we are making every effort to ensure that we work with only reputable companies. If you feel that any FAIRtax-sponsored email is objectionable, please email us at info@fairtax.org and tell us why. You can also opt to not receive these sponsored email messages but still receive FAIRtax emails.
Thank you for staying FairTax strong!
Throughout history, each civilization has needed to extract funds through various forms of tax from its citizens to pay for the services provided to the citizens. Wise leaders knew that people were willing to pay more to a government if the government was perceived to be providing valuable and useful services.
While all taxation reduces our ability to consume, we have seen a change over time in the definition of fairness. Up until 1913, the U.S. was funded primarily through excise taxes, tariffs and duties. People paid these taxes based solely on their consumption because the prices of goods were increased by the amount of the excise taxes, tariffs and duties on the goods.
While the people earning lower income paid the same rate of tax as the people making much higher amounts of income, most Americans accepted this system and few attacked it as being “unfair.”
Over the past sixty years, increasingly there have been attempts to change our tax system to make it more “fair.” State sales taxes exempt food and other basic items. At the federal level, we have seen a constantly changing income tax code with different tax rates and deductions.
A lot of people believe that a tax system is “fair” if people making higher incomes will pay higher tax rates and, consequently, more in taxes than would be paid if the tax rates were uniform for all.
A flat income tax doesn’t fit the above definition of “fair.” If there is one rate, then people making more money will pay more taxes but not a much higher percentage of their income. The proponents of the flat income tax try to compensate for this by increasing the threshold amount of earnings that are not taxed. Some of these plans do not require any income tax until a family exceeds $50,000 of income.
Of course, a flat income tax still requires businesses and the rapidly growing number of the self-employed to reduce their gross receipts by their allowable expenses to obtain their net income that will be taxed. This will require retaining much of the present Internal Revenue Code and the IRS.
The Right Way To Define Fairness
In evaluating any tax reform plan, it seems to me that we should be asking if it is “fair” for a tax reform plan to:
• Reward savings and investment
• Allow people to receive their pay without federal tax deductions
• Stop rewarding imports and punishing U.S. exports
• Allow people an exemption for all purchases of new goods and services up to the poverty level
• Eliminate 90% of the compliance costs of the present income tax system
• Grow the economy much more rapidly than the present income tax system
• Create more higher paid U.S. jobs
• Raise money for the expenses of the government in the least costly and intrusive and the most efficient manner
• Allow the government to directly appropriate money to take care of people who need more of a safety net—not trying to accomplish this through more complications of the present income tax code
Most people will agree that the above is fair. Of course, people in D.C. have extracted large sums of money by obtaining special income tax code benefits. They don’t want simplicity but a continuation of what has been a very profitable activity for them.
Knowing the reason for the reluctance to do real tax reform, we know that the only way to accomplish our goal is to have constituents demand actions from their elected officials. They all want to keep their jobs and the voters determine that.
September Washington Trip
Peggy does an excellent job of providing you a briefing on our September trip to D.C. One thing that I believe is clear from these meetings is that we are finding more and more agreement that some form of consumption tax is needed.
We also saw that when constituents contacted their elected officials and requested meetings, the offices responded. This action is particularly effective when the constituent joins the meeting via telephone. The Member or staff person always starts off by confirming that the person on the phone is a constituent, but then it normally goes very well and they listen attentively as we explain the benefits of the FAIRtax.
Please contact your Member of Congress and ask them to meet with Peggy and me. Indicate that you would like to join the meeting via the telephone. As you get responses, please send them to Peggy at Peggy.Green-Ernst@FairTax.org.
1040 Club
Thanks to each of you who have joined the 1040 Club. You are ensuring that Americans For Fair Taxation can continue to promote the FAIRtax.
If you are not a member of the 1040 Club, or if you are a member but want to join for someone else, please go to this link and sign up.
FAIRtax Power Radio and Would Thomas Jefferson Think We Are Free
Whether you’re a FAIRtax volunteer or an informed citizen who wishes to be better informed, we encourage you to listen to FAIRtax Power Radio, the online radio show that is available when you are. The FAIRtax Guys discuss and analyze the problems with the current income tax system and the best replacement, the FAIRtax. We also have great guests periodically such as area business people, a Congressman, leaders within the FAIRtax organization and even Thomas Jefferson and Rod Serling (Program 19). FTPR is FREE to the listener on two different websites - SoundCloud (http://bit.ly/1KNsOof) and YouTube (http://bit.ly/1PZUFVU). Both SoundCloud and YouTube have free apps for smartphones so you can listen while you’re on the go. Our goal is to offer a discussion of the most thoroughly researched tax reform proposal, the FAIRtax, and make it seem like a family discussion at the kitchen table. Listen to our programs and then tell your friends and relatives about the show.
AFFT National LOGO Store and Scrolling Signs
Going into the primary system, it is even more important that all of us have FAIRtax signs that we can bring to political rallies. Many venues will not allow us to bring signs attached to metal or wood holders. That is why Rudy Treml designed and had printed the scrolling FAIRtax signs. Visit our National Store at www.fairtaxlogostore.org and purchase some Personal FAIRtax℠ Scrolling Handheld Event signs.
It is a handheld scrolling event sign printed in color on both sides with our new logo. When folded up, this banner is only 2” x 9” but opens up to a 27” x 9” presentation
which self-retracts. It is ideal for all political events and easily fits in a pocket, jacket or purse when not in use. To see a picture of this banner please click here.
Thank You For Opening The FAIRtax Chronicles, Our Sponsored Mailings
We plan to do several of these mailings each month. If you take a minute to open the sponsored emails and click through to the website, you are making an in kind contribution to AFFT. It is not required to actually make a purchase, but your minute of time will ensure that AFFT is paid ever larger amounts from people paying for us to send their offers to our supporters.
Again, we are making every effort to ensure that we work with only reputable companies. If you feel that any FAIRtax-sponsored email is objectionable, please email us at info@fairtax.org and tell us why. You can also opt to not receive these sponsored email messages but still receive FAIRtax emails.
Thank you for staying FairTax strong!