To those of us who don’t live in the D.C. area and profit from the income tax system, it is hard to find much to like about the federal income tax. People correctly complain:
- It takes your money before you see it, making feeding the government a higher priority than feeding your family.
- It is extremely complicated to the point that most people have to pay someone else to do their taxes for them.
- It requires that taxpayers keep detailed records.
- It is impossible to find even one person who has read the whole law or who claims to fully understand it.
- It is modified by men and women who have no idea what the language they are voting for actually means.
- It is changed pursuant to computer models that try to predict the impact of tax policy changes while ignoring the fact that people actually try to do what is best for themselves and their families, and not what the bureaucrats want.
- It is easily “gamed” if you are part of a group that can pay for special treatment.
- It’s ridiculously easy to evade, and that evasion costs the government hundreds of billions of dollars every year.
- It can be difficult to get some of your own money back even if you are entitled to it, and refunds are given only once per year.
- Congress is constantly changing it. Many of those changes are bought by lobbyists so that they benefit one group while adversely affecting other groups.
- Because it is constantly changing, it’s impossible to do any sound, long range planning because you have no certainty on how much of the money you earn you can keep the next year.
It is harmful to the overall economy and makes it more difficult for American manufacturers to compete in the global marketplace with their foreign competitors.
With all of these problems, you may ask, “How could such a terrible system last for over 100 years?” The answer, of course, is that it is hugely profitable for the D.C. elites and their minions in Congress. They don’t care what it does to the rest of us as long as they can get rich from it.
Of course, they do throw out a few bones every now and then to make certain people feel like they’re getting a break that others aren’t. Among those kinds of benefits are:
- Tax credits for the installation of solar systems equal to 26% of the cost
- Earned income credit
- $2,500 deduction for student loan interest
- $2,500 tax credit for undergraduate education expenses
- $2,000 tax credit per dependent child under age 16
- IRA contribution deduction
- Continuing education deduction
It is important to remember that a tax credit and a tax deduction are distinctly different. A tax credit reduces the taxes you owe. If your total tax liability is $15,000, but you qualify for a $10,000 tax credit, your tax bill is reduced by the full $10,000 to just $5,000.
A tax deduction merely reduces the amount of income that is subject to taxation. For example, if you are in the 20% income tax bracket, a $10,000 tax deduction will save you just $2,000 in federal income taxes.
Don’t forget that these credits and deductions won’t save you a dime of federal payroll tax. Those taxes are strictly a percentage of your earnings with no credits or deductions allowed.
Finally, don’t get too used to having a particular credit or deduction. As noted earlier, Congress is constantly tinkering with the tax code. The credits and deductions you count on for this year can easily be reduced or even taken away entirely next year.
CONCLUSION
"If it costs you your peace, it is too expensive.” All of the above credits and deductions were created by Congress to placate us and keep us from really seeing just how corrupt the income/payroll tax system is. The politicians know that if we the people ever saw what was really going on with the tax system, we would demand change. So, the D.C. Elites keep us in line by threatening to take away the breaks that they so graciously granted us.
The income tax system is based on the arrogant premise that we’re not smart enough to know what’s good for us, so we just need to trust our betters in DC to do what’s really in our best interests. Like trained dogs, if we behave as they say, they give us a treat. They let us keep more of our income that we can then use for our families.
Should we be like sheep who are herded this way and that by our betters in D.C.? Should we allow them to keep taking our money before we get it and then making us fight to get some of it back?
The question is really simple, “Who should decide how much tax I pay?”
For example, why should only people who itemize deductions be allowed to deduct charitable donations to their church or to the Red Cross while the other 87% of us who don’t itemize have to donate money on which we paid income tax and payroll tax? Instead of giving 100% dollars like the privileged 13% do, we have to give between 70% and 85% dollars—depending on how much the government confiscated from us.
With the FAIRtax, we get all of our money. There is no gross and net. You bring home everything you earn without any Federal withholding or payroll taxes. We can then use 100% of our money in the way that we believe is best. We can donate to a charity and not pay any FAIRtax.
We can purchase used goods and not pay any FAIRtax.
Unless we have a business, we don’t have to keep any tax records at all, or file any tax returns. We pay our federal taxes at the cash register when we purchase new goods and retail services.
THE PRESENT INCOME/PAYROLL TAX SYSTEM COSTS US OUR PEACE OF MIND AND THAT’S TOO EXPENSIVE.
If you have friends who don’t know about the FAIRtax, send them to FAIRtax.org. Have them watch the white boards under “How It Works” and, if they agree, ask them to please join us.
Then contact your Members of Congress and the President and demand that Congress pass -the FAIRtax—the only fair tax.
Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:
“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
Is it hopeless? When confronted with a seemingly impossible problem, remember the statement attributed to the author George Bernard Shaw who wrote, You see things; and you say “Why?” But I dream things that never were; and I say “Why not?”
Isn’t it time for us to ask, “Why not?”