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The Original Intent
Behind Good Government
USA/Nancy Salvato |
August 8, 2005
- "For the first time in decades, and perhaps for
the first time ever, the opportunity for meaningful tax reform is upon us.
President Bush has impaneled the Presidential Advisory Panel on Tax Reform
and they are currently taking testimony from financial experts, groups and
organizations." - (www.basicsproject.org)
Many folks admittedly don't understand how taxes really work, except for the
fact that their pay checks are substantially smaller without the money that
was taken out by the government. This might intimidate people from trying to
understand all the ways to implement tax reform –myself included. However,
it would be advisable for those like me to read about the
FAIR Tax which is pitifully simple to understand and which makes
complete sense.
I was recently struck by the idea that if the FAIR Tax were adopted at both
the state and federal levels, it would substantially lesson the negative
impact brought to bear on the American public from eminent domain abuse, out
of control education spending, and the trade deficit. The first issue came
to a head this year with the decision by the Supreme Court regarding Kelo VS
New London. Equitable funding of education is always in question. Whether
all trading partners will be treated with fairness dominates any debate
about CAFTA, NAFTA or other trade agreements which involve the US economy.
Let's begin with the Supreme Court ruling on the Kelo case. The court
concluded that because the CT property in question would provide greater
opportunities for economic development and tax revenue, it qualified for
government taking under the guise of the public interest –previously
interpreted to mean such things as sewers, public schools, or utility lines.
If Connecticut had a FAIR Tax, this precedent would no longer be of any
concern because all future government revenue would be derived from a tax on
purchases above and beyond the bare essentials. It would eliminate any
government interest in creating a bigger tax base in their community. It
would leave the market to its own devices.
Next, let's tackle the education spending behemoth. Public education would
no longer be funded by income or property taxes. Instead, a percentage of
every dollar spent would be earmarked for this purpose; ensuring equity of
distribution among all public schools. It would be unnecessary to rob Peter
and pay Paul. Yet any family could opt out of educating their children at a
publicly funded school. To ensure the kind of free market competition that
translates into a quality product, all children would be eligible for a
tuition voucher to offset the cost of an alternative education.
Finally, let's have a closer look at what the FAIR Tax says about trade.
"The FAIR Tax allows U.S. exports to sell overseas for prices 22 percent
lower, on average, than they do now, with similar profit margins. Lower
prices sharply increase demand for U.S. exports, thereby increasing job
creation in U.S. manufacturing sectors. At home, imports are subject to the
same FAIR Tax rate as domestically produced goods. Not only does the FAIR
Tax put U.S. products sold here on the same tax footing as foreign imports,
but the dramatic lowering of compliance costs in comparison to other
countries' value-added taxes also gives U.S. products a definitive pricing
advantage which foreign tax systems cannot match." (See above link)
Again, the market would be left to its own devices.
How did our current tax laws evolve into an 800 pound guerilla, so
impossible to manage? Seemingly innocent legislation was passed to help us
take care of ourselves. But we must eliminate government dependency and
simplify our code of law. Adopting the FAIR Tax would help us to tame the
beast and once again manage our own life, liberty, and property.
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