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Sunday, February 20, 2005

MUST READ: Imagine receiving 100% of your paycheck! 
Neal Boortz: Imagine receiving 100% of your paycheck!

I found this 6-month-old article today while trying to avoid getting to work. I suggest that all of you try to find the time to read it because this legislation could very possibly be the most important law passed in the last 100 years. It abolishes the income tax system and replaces it with a more efficient and fairer sales tax alternative.

Here is a link to a copy of the Bill itself, HR25: http://www.theorator.com/bills108/hr25.html

Here is a link to a group fighting for passage of this Bill (includes petition): http://www.fairtax.org/

Imagine a world in which John Kerry, Theresa Hines Kerry, John Edwards, George Soros, Al Franken, Michael Moore, and countless other millionaires, actually pay taxes. If this Bill were passed, people like this wouldn't be able to hide their wealth from taxation in the crevices of the tax code. Built in shelters, such a the "gigolo" exception, would no longer exist. That's right, John Kerry would pay a just proportion of the tax burden every time he buys everyday consumer items, such as an $8,000 bicycle.

Further, this tax system encourages investment and growth. Earning and investing money is not penalized, as only consumption is taxed. A person who invests his paycheck in productive endeavors, such as stocks and bonds, instead of unproductive ones, such as Cheetos or internet porn, will see a much greater return on spending. Greater investment also means more jobs, more housing developments, greater technological advancement, and increased competetiveness with foreign nations.

The people who stand to lose the most are the extremely wealthy, who would effectively pay more in sales than income taxes. If they didn't buy $8,000 bicycles with their money, they would invest it instead, which would grow the economy larger, which in turn benefits everyone.

As tax payments are backloaded, applying only when something is actually bought, as opposed to being hidden in a paystub, consumers will likely decrease their overall spending and invest instead. On a related point, I know an influential Libertarian who believes that payroll taxes should be paid in a lump sum at the end of the year, just like property taxes, so that taxpayers better understand just how expensive taxation is. This is a good idea, and clearly would apply to a 23% sales tax, which everyone would see every time a purchase is made. Local property taxes and their expenditure are the subject of much scrutiny, unlike more costly payroll taxes. If people actually started to see the price they pay in taxes, they would almost certainly demand to know just where those taxes were being spent.

Which leads me to my last point. The biggest losers by far will be the big spenders in Congress, such as ex-clansman Robert Byrd (D-WV). When people actually start demanding to know where dollars are being spent, porkers such as Byrd may start to be thrown out of office. More attention to tax payments will mean more attention to expenditures....

Let the Libertarian Revolution begin!
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