by TD of The Right Track
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:
- Obtain records of your purchases from retail or service center outlets
- Obtain records of your purchases from your financial institution
- Collate the records in order to see what went where
- 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
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