Okay, quick revert back to the Fair Tax.
I have a few reservations about it, because of the sorts of things that would be taxed. The whole deal about the Fair Tax is that "everything" is taxed ... except for education. One of the FAQ's asks, "Why not just exempt necessities, like food and medicine?" The problem is, that would open the floodgates for lobbyists and special interests to come in and be like, "Give me special treatment!" ... and isn't that what the whole problem is with our current tax system anyway?
(When I rule the world, all lobbyists will be fired. and if they don't go home, I will line them up and shoot them. I hate lobbyists and special interests. http://www.npr.org/blogs/money/2012/01/06/144737864/forget-stocks-or-bonds-invest-in-a-lobbyist)
I mean, check it out:
Random thought I just had: What qualifies as "education"? Would preschool count, or is it just like public kindergarten through college (or trade school, or whatever post-secondary training you want)?
Anyway. The Fair Tax also taxes RENT and HEALTH CARE. So ... you'd be paying tax on that $30,000 surgery. And then with the way insurance companies currently are, are you paying tax on what the hospital bills you, or what the insurance companies pay, or what? More about that in a second, I promise.
No, just kidding. I just wanted to say this wouldn't work because in my world, the bulk of health care would be a public good, not a private one. So maybe just the privately-run health care businesses would need to tax. I figure the basic government health care wouldn't be the best, so people can pay for fancier health care just like we pay for fancier private schools.
Back to rent.
It seems kind of crazy to tax rent because it would tack on $300 to a $1000 rent. (A 23% inclusive tax comes out to a 30% exclusive tax. I wasn't 100% positive of that when I wrote my previous entry because I couldn't remember the source I got it from so I didn't write the 30% number.) And I am renting our house in American Fork out to our friends, and it's confusing enough filling out the income tax forms on it. No, wait, scratch that, I think it's probably more complicated NOW calculating income and expenses and doing my income tax returns than it would be to figure out how to pay the sales tax to the government. But how would they even keep track of ME renting out MY place to my friends because we can't afford to sell our house ...? Fair Tax talks about how it gets rid of tax evasion problems (and oh yes it does, oh Fair Tax, how I love you and your simplicity) ... but ... like ... I don't know.
I guess I feel more comfortable about them taxing rent because you DO get to take your entire paycheck home. Your. Entire. Paycheck. Can you imagine?!?! And you get the prebate every month, so as your family gets bigger and you need a bigger place, you get a bigger prebate that covers more of your housing costs.
The Fair Tax also charges tax on interest. Currently, so much of our economy is based on borrowing (which, in case you don't remember, is a really bad idea, according to the prophets.) So a lot of people will be irritated that they're paying taxes on interest. But again - at the end of the day, is that such a bad idea? Maybe people will learn how to live within their means again!
Some people also complain that the FairTax isn't progressive enough, because the top 1% derive most of their income from capital gains, and that money is reinvested into the economy and isn't spent on new goods and services. But ... why are we taxing people for making money they're not spending anyway ...? A friend once asked me, "If the money's ultimately going to be spent somewhere anyway, does it really matter when it's taxed?" I think the answer is yes, and the two words I think that best describe it are: compound interest.
Also, this is a problem I have with both the Fair Tax our current income tax system: Cost of living is different from city to city. So for someone in New York City to have the same prebate as someone with the same size family in Mississippi ... the money just wouldn't go as far. So I would think that local governments would have to determine poverty levels or prebate levels for families of different sizes, and NOT have it be a blanket federal number applied to the whole nation.
I believe more local(ized?) governments are more effective than the federal government. If only our government was set up a bit more like our Church leadership, huh?
Anyway, all in all, I think the Fair Tax is a pretty good idea, and a pretty fair idea (even though it "doesn't tax the rich enough"). I don't like lobbyists in Washington and I don't like how the government works so hard to influence people's personal decisions. Both the Democrats and Republicans do it in different facets of our lives ... and that's why I'm a Libertarian.
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