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FairTax BlogBurst

With any proposal, sooner or later the naysayers start their doom-and-gloom predictions. The FairTax proposal is no exception. There are those out there whining and crying about how “it won’t really work that way”, despite the fact that the current income tax system isn’t working the way it’s supposed to work. I suppose their fear is exchanging the devil they know for the devil they don’t know. In this article, I’ll highlight some of their worries and attempt to dispel them.

A national sales tax will create a huge black market.

Among all the arguments to be made against the FairTax, perhaps this one holds the least water. Arguments are made that this “black market” will spring up, with people “illegally trading DVDs, cigarettes, canned foods” yada yada yada. OK, illegally trading? What’s illegal today about trading those items? Nothing! So what’s the problem?

“They’ll be avoiding the tax!”

And that’s bad, why? My wife buys romance novels at a used book store now. She’d be avoiding the tax, too. She’s also reading books that everyone else read weeks or months ago. I say, “Come on, black market!” Only the market won’t be black. It can be right in a store front, advertising used books, consignment shops for clothes, furniture, camping equipment, you name it! A whole new type of business will emerge! That will be great for the economy, right? Right!

The national sales tax will give government another reason to make cash purchases illegal.

Those making this argument claim that paying with cash will make it easier to avoid paying the tax. This is simply ridiculous. Number one, most businesses are run by honest, dependable people. It’s not the business owner that’s being taxed, remember, it’s the purchaser of goods and services. With penalties for those who attempt to cheat the system, the onus is on the business to be open and above-board in collecting and paying the tax. The businesses will keep a small percentage of what they collect in order to offset their expenses in collecting and reporting the tax! While the consumer might hope for a break from the tax, it would be the rare businessman who would collude with the consumer in his scheme to avoid the tax!

The tax will be used to track your entire financial life.

Coming so closely after the previous argument, you have to laugh. First folks are going to pay with cash to avoid the tax, then the tax will be used to track your entire financial life. Unbelievable. How so? You’re not filing a return, are you? To do this, the government would have to:

1. Obtain records of your purchases from retail or service center outlets
2. Obtain records of your purchases from your financial institution
3. Collate the records in order to see what went where
4. Have a really good reason to waste their time doing this

But remember, the tax applies to new goods and services only. Don’t want the government to know you bought that new Humvee? Get last year’s model from a used car dealer. Want a couple of evening gowns? Hit the new consignment shop that just opened up a few blocks from your work. But do you know why the government won’t track your entire financial life? Simply put, you’re not that big a deal. Sorry to deflate your ego, but why would the government care to delve into your personal finances? They don’t care what you spend money on, as long as they get their cut!

Simply put, any tax scheme can run rampant over the American people without diligent and unceasing attention on the part of the American taxpayer. It is up to you and I to keep our government on a short leash. We must realize that there are no free rides. When the government gives you something, they have to take something away from you first in order to do so.

As author Edward Abbey said, “A patriot must always be ready to defend his country against its government.”

TD

The FairTax Blogburst is jointly produced by Terry of The Right Track Blog and Jonathan of Publius Rendezvous. If you would like to host the weekly postings on your blog, please e-mail Terry. You will be added to our mailing list and blogroll.

posted by Rebecca @ 6/28/2006 07:01:00 PM