I love the Fair Tax!

Okay, so there's this thing I love.  It's called the FairTax.  Basically, imagine this:
There's no income tax.  There's no corporate income tax.  There's no IRS.  There's no April 15.

What there IS, is a 23% federal sales tax on consumption of new goods.  That means, you go to the store and buy something, you pay 23% tax.  You get a haircut, you pay 23% tax.  You buy a new car (or a new house!), you pay 23% tax.  You buy something from a consignment shop.  No tax.  You buy a used car.  No tax.  (Well, no federal sales tax.)  But guess what?  You get to take your WHOLE PAYCHECK HOME.

But our current tax system is "progressive," you say!  I put "progressive" in quotes, because now that I think about it, the 15% investment income tax rate makes it so that people who make most of their money from investments (ie. those super-rich investors the 99% are complaining about) end up paying at a lower income tax rate than those who make their money doing physical work.  And most people who have so much money to invest hire someone else to do the investing so it's not like they're doing much work to earn those dividends, right?  Investing IS valuable and important to the economy (when people want to start up a business they need capital) but is it really worth giving these people special income tax treatment?

Oh boy, sorry, I really don't actually want to get into that conversation right now.  Ahem.

Progressive taxes ... the idea that those who have less pay less in taxes because they need more of their income, and those who have more can afford to give more in taxes because they can provide for their own basic needs and then some.  So supposedly there are people below the poverty level who pay no tax (or negative tax), and then there are people in varying tax brackets who pay the same percent in tax up to a certain level of income, then a higher percent of tax for the next level of income, then when you make a ton of money you're supposed to give up even MORE of that in taxes ... So the marginal returns you get as you make more money get smaller because more of it gets eaten up in taxes.  Something like that.  In theory.  And if you are married and have to provide for your family (spouse, kids, etc) then you get to claim these exemptions and stuff so you get to keep more of your money.  Because, let's face it, if you earn the same amount of money as another guy but you have 2 more kids, if you both pay the same amount in taxes, you're going to have less disposable income because you have to feed, clothe, and house your kids.


http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks
The FairTax works out being "progressive" because it looks at a whole household and estimates the amount of money they'll need to provide for the basics (ie. what's the poverty level for a given household size?)  Then every household gets a "prebate" check from the government to cover their basic expenses.  So if you spend money at the poverty level, your prebate check equals your sales tax.  If you spend more than that, it's like you pay a little bit of "income tax" (spending/consumption tax) ... up to a limit of 23%.  So if you're a millionaire and you spend a million bucks on new goods, the amount of sales tax you pay is gonna be WAAAAY over that little prebate you got and your effective tax rate will be 22.9999999%.

Your household is determined by the number of people who live in your house with valid social security numbers.  THAT'S IT.

The nice thing about this is that it taxes everybody so it makes it hard for people to evade taxes.  You know, illegals getting paid cash under the table don't pay income taxes.  But here, if they don't have a valid social security number, not only do they NOT get a prebate, they also have to pay federal sales tax on the new stuff they buy!  Booya!  That would encourage people to gain citizenship, wouldn't it?  This also solves one of the same-sex marriage problems.  It doesn't discriminate according to marital status.  It gets the government out of married, so homosexual couples can have the same tax benefits as heterosexual couples ... and, hey, polygamists too and people who just want to live together.  Why not?  It's just taxes.

Anyway.  You might want to check it out.
http://www.fairtax.org/site/PageServer?pagename=FAQs

Chew on it for a while.  It sounds totally weird at first, but it might just grow on you.

Gary Johnson 2012!
I can no longer deny that I am a libertarian.

(There will be a future post about some of my reservations about the fair tax ... but that would be too overwhelming in one post.  This post is too long already.)