Thursday, June 11, 2009

Fair Tax and Michigan: Part I

Since I didn't give the Fair Tax a fair-sake last time around, my good friend Colin has let me in on a few things here is the first installment:

Okay, so I am not stellar at solving technological issues and do not know how to make this a separate post from the comment. At any rate , here is my promised argument for the the fair tax in Michigan (though it would likely be more effective as a national program). This is not a well researched argument. Rather, it is a broad overview of fundamental issues that can be addressed. The initial argument would alienate the left and the latter arguments would alienate the right. Thus, it is such a perfect solution that it will likely never get passed.

In its base form, the fair tax is simply a universal sales tax to replace all others. Income, death, property, and other taxes you could think of would be a thing of the past. The visual simplicity of a a proposed national tax code wraps over you like a warm blanket when juxtaposed against the tens of thousands of pages the current IRS tax code entails. The proposed numbers range from a sales tax of 10-25% on all items. In the sheer Libertarian bliss of this treatment, government would not just be ripe for cuts, it would have to downsize. 

Yet, it seems reasonable to assume that such a plan is too idyllic to work in reality. As a Democrat chum of mine was told me, "you Republicans always forget that somebody has to take out the trash." Class warfare inducing statements aside, he has a point that is even more relative to the Libertarian fathers of the this movement. Let us hold onto that thought for a minute, because it is addressed by the original plan as well as my variations. A simple response might be, "not only would lower-class folks get crushed but the loss of various government agencies would lead to job cuts." 

A sound argument. After all, the welfare system would be completely shut down. However, the Fair Tax system would restructure welfare to look something like this: Once you hit a low tax bracket, we will calculate how much you would spend a month (based on traditional indicators like 'dependents') and pay you anywhere from 10%-100% of the taxes we project you to incur during this period. Note: The threshold would be lower than the current system because if less than half of the citizenry pays taxes we cease to be a country and become a trust fund AND there would be no such thing as a free lunch.

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