Wednesday, May 6, 2009

More Flawed Tax Policy

BHO is unhappy with our federal tax code. He notes that we have a tax code
"that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York."
The 17,000 pages of the U.S. Tax Code say lots of other things even goofier than this. I would recommend that BHO read the tax code, but that would be cruel and unusual punishment. Even lawyers can't stand to read the tax code, much less understand what it says.

If Obama really wanted to get serious about tax reform, he could embrace HR 25, the Fair Tax Bill. He could also visit the web page of Americans for Fair Taxation for easy to read explanations of why the Fair Tax would solve the corporate income tax problem he lamented about a few days ago. Adoption of the Fair Tax would solve a lot of other problems as well.

Better still, he could read the open letter sent to all members of Congress, the Senate, President Bush, and Bush's now forgotten tax reform commission. BHO could really give us change we can believe in by asking Congress to pass HR 25. That letter, signed by about 90 professional economists, provides a nice summary of the Fair Tax and why it's the right thing for America.

Will BHO do any of these? Let's just say I will be stunned if he does. After all, our President clearly wants more federal control of practically everything. Our convoluted U.S. Tax Code fits into that vision all too well.

The original Americans who ratified the Constitution would have been horrified had someone suggested that the federal government should withhold an income tax from the paychecks of Americans. In fact, the first Americans explicitly prohibited collection of an income tax in the first place, never mind withholding the tax from paychecks.

What's your personal average federal income tax rate? Don't forget payroll withholding taxes (i.e., Social Security and Medicare taxes). If it's 30%, then the 545 have declared that they own 30% of your labor. If it's 50%, then the 545 say they own 50% of your labor. You don't own all of your own labor services; it's the law. And you thought we were all free people, right?

Can we do away with federal taxation? No; that would be impossible, since we all seem to want something from government. But that doesn't mean we can't do a better job of taxing ourselves. The Fair Tax offers a completely practical way to improve the tax code. Give it a look.

2 comments:

Fiddlinmike said...

The current tax system is too good of a means for social manipulation for the Congress and President to give it up. Your quote from BHO says it all. His only interest in tax reform in this instance is in providing incentives for businesses to create US jobs, or alternatively punishing those who don't. Sounds like he knows better than businesses, doesn't it?

DLK said...

@Seeker,

You seem to have it in for the Fair Tax. Do you have reasons other than your notion that state and local governments should not be asked to pay a federal sales tax on final goods and services they purchase?

BTW, it is unlikely that Fiddlinmike or anyone else will see your comments to past EconoBlast posts. You might want to wait for a new post that deals with the Fair Tax to make your points.

So far, your arguments are polemical assertions, not based on logic or reason. You won't find rants persuasive to readers of this blog. Try using logic, instead of statements like "Corporations rejected Fairtax because its bogus nonsense."