Cindy Mallette: On the Scene

By CINDY MALLETTE
Staff Writer

“Don’t tax me, dude!”

That’s the phrase our Founding Fathers used to fuel a revolution.

(OK, they used the 18th century equivalent, but bear with me.)

The great men who formed our nation understood the power of taxation to either build or destroy a country.

“No taxation without representation!” was the rallying cry of a country struggling under the burden of an unfair system.

“Unfair” is a great way to describe the system we struggle under now: the progressive income tax.

Last month I talked with Tom Wright, former executive director of FairTax.org, about the un-democratic system by which we fund our federal government.

“Communist is a good way to describe it,” Wright said.

Karl Marx was a big fan of the progressive income tax. He described such a system in his “Communist Manifesto”: the government confiscates the extra wealth from successful people and redistributes it to the less successful.

Wright said direct taxes — things like income taxes, poll taxes and head taxes — have been used by tyrants throughout history to control their subjects. Taxes like those lead to fewer civil liberties and an ever-growing, more intrusive and more expensive government. They also require draconian enforcement, he said.

Just ask Wesley Snipes his opinion on American income tax enforcement (you’ll have to put in a formal request at the federal penitentiary first).

In contrast to direct taxes, Wright said consumption taxes, throughout time, have required the least amount of infrastructure to enforce, are self-limiting and promote civil liberties.

Imagine, after working a 40-hour week, you pick up your paycheck and — Gasp! — you get to take home every penny you’ve earned! You have a hankering for a new car, what with 25 percent more of your hard-earned income pocketed away in your bank account (and not in the government’s leaky coffers).

At the dealership, Honest John makes a deal you just can’t pass up. Tacked on to the final sale price is a 23 percent federal tax. (Remember, the government still has to pay for all of those benefits that aren’t coming out of your paycheck anymore.)

“Ouch! That’s a lot extra,” you think. But then you remember: “Hey, if I didn’t want to pay taxes, I wouldn’t buy the car. It’s my choice.”

The government doesn’t force you to fill out a 1040 form when you buy your car. It’s automatically deducted through the point of sale.

Simple, right?

The consumption model fits right in with the Founding Fathers’ ideals of limited government (they don’t know how much you make, just how much you spend) and personal autonomy (I choose when to pay taxes).

Right now, the House of Representatives has the opportunity to vote on HR 25, a bill known as the FairTax. The FairTax is a consumption-based system that eliminates federal income taxes including personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment and corporate taxes.

It wouldn’t eliminate a single government program; instead, those programs would be funded through the national sales tax. Only new goods and services are taxed. So, if you buy a used car from Honest John, you won’t pay a dime to the federal government.

The FairTax doesn’t increase the cost of goods and services, either, because it eliminates the hidden corporate taxes that are added to the final cost of a product.

Finally, the FairTax promises to boost the economy. Workers have more money to spend and the federal government makes money off of every foreign tourist, illegal immigrant and drug pusher who spends money in the United States. Plus, with the elimination of corporate taxes, more companies will choose to bring production here, creating new jobs and more opportunities.

“Even FairTax critics admit that the economy will expand under a consumption tax of whatever form,” Wright said.

Isn’t it ironic that Russia, the fatherland of communism, has abolished the progressive income tax in favor of a flat tax advocated by none other than former U.S. Congressman Dick Armey? The flat tax is good, because it collects taxes at a constant rate across the board (17 percent under Armey’s proposal) excluding only those whose incomes don’t reach a predetermined level. It’s not as transparent or as simple as a consumption tax, but it seems to be working for the Russians.

Unfortunately, it’s the fatherland of modern democracy — the United States of America — that clings to a tax system promoted by tyrants and communists.

Cindy Mallette
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