Tax Talk on the Campaign Trail

The campaign trail is already rife with tax talk as the candidates in both Parties gear up for their major push leading to the early 2008 primary season. Unannounced GOP contender Fred Thompson created somewhat of a stir last week by suggesting he may support the 'fair tax.'

Simply stated, the fair tax is like a national sales tax, except no sales tax would be assessed on food or medicine. This would greatly help the poorest among us.

However, the fair tax proposal has already generated opposition on the part of those with a vested interest in keeping the present system of taxation. Tax lawyers and accountants in particular are vehemently opposed to the plan, as are the tax preparation services.

The IRS is opposed to the plan. The reason, of course, is not far to find. With the fair tax in place, there would be no need for the IRS.

Liberal politicians, such as Hillary Clinton and Barack Obama, are against the plan. The current system allows the socialistic notion of 'redistribution of wealth' to flourish. Plus, it is too easy to score political points by creating class warfare when a politician can always point to how 'rich people and corporations do not pay their fair share' under the current system, leading to their proposals for hefty tax increases for upper income brackets and U.S. businesses.

Curiously, however, the fair tax proposal is finding some opposition among the middle class that has greatly benefited from deductions for mortgages and charitable contributions.

Perhaps this is the one negative consequence of implementing the fair tax. The middle class would no longer have those deductions.

However, there is too much in favor of a system of taxation based upon the fair tax to dismiss it outright for failing to include provisions to which Americans have been accustomed.

For one, you get to keep your own money. No federal tax assessments will be withheld from your paycheck. With more money in your pocket, you have more choices at your disposal, such as buying a home or making provision for medical care.

In addition, when you make a purchase of food or medicine, you pay no federal tax whatsoever. Many states have already implemented this policy on the local level, meaning that food and medicine are much more affordable to the lower and middle classes.

Perhaps the most enticing advantage of all with the fair tax is that at the end of the year there are no lengthy and confusing tax forms to fill out. April 15 will no longer be known as the black day when the tax man cometh. You will no longer need to fear the heavy hand of the IRS pouring over your records for mistakes, or being told that you underpaid and owe more money.

Some critics have argued that the U.S. government could not survive under such a system. Such an alarmist point of view is a scare tactic alone. Not only would government survive but it would thrive.

For the first time in memory, corporations would pay their fair share like everyone else. So would the super-rich. With the demise of the system that makes corporate welfare possible, along with loopholes that allow some of the super-rich to escape large tax liabilities, government will actually begin to collect more money from some sectors of society.

Every person and every entity in America will owe the very same percentage on purchases except for food and medicine. This is actually a good thing. Everyone pays their 'fair share.'

For some mega-corporations this will mean millions of extra dollars flowing into the federal government.

At the other end of the spectrum government would actually lose money from those who can ill afford to make many purchases of consumer goods.

Any shortfall of funds from the fair tax would lead to a thorough consideration of the age-old question--does government live within its means? Clearly it does not. With multi-billion-dollar bridges built to nowhere by pork-barrel politicians, the Pentagon paying millions to ship 19-cent bolts, and unnecessary programs such as the BATFE and the Department of Education, the government is long overdue for some belt-tightening.

The abolition of the IRS alone would save American taxpayers billions of dollars per year.

So far, at least five of the GOP Presidential candidates are on record as either supporting or considering supporting the fair tax--Mike Huckabee, Ron Paul, Duncan Hunter, Tom Tancredo, and Fred Thompson.

The Liberty Sphere is glad to see this issue taking center stage in the various campaigns. We feel that the nation's broken system of taxation should be an easy one with which to hammer the Democrats.