FairTax: The Solution

0 Posted by - April 15, 2011 - Commentary, Commentary - Guest, Economics

midwest rally poster FairTax: The Solution*Written by Raymond Budd of the Southwest Florida FairTax Educational Association. Originally intended to be a speech at the Ft. Myers Tea Party on April 9th, 2011.

On a cold December day in the winter of 1773, a group of colonist’s boarded ships anchored in Boston Harbor, and began to throw its cargo overboard. The cargo was the most recent shipment of tea from Britain. What would warrant such extreme measures? Was there a contaminant or poison in this product that posed a health risk to the consumer. No, the pestilence afflicting these flotsam and jetsam was a newly enacted tax levied upon the citizenry by an overbearing, unyielding monarchy. The tea tax imposed by the British Parliament specifically on the product shipped to the colonies was an usurpation on the rights of colonists as they had no voice in the actions of its governing body.  These actions were not protests against the tax specifically, but in reference to “no taxation without representation” In other words FAIRNESS!

What followed was a war that was to remove these colonies from under the boot of such tyrannical authority. Through perseverance and some would say divine providence, victory was achieved, and Independence was obtained. Although the colonists finally had the proper representation in the newly formed Republic, this new found freedom did not come without a cost. Along with the high sacrifice of blood came the equally great expenditure of treasure. The newly formed country found itself holding the debt incurred by the colonies to secure this independence, and was in great need of finding ways to generate revenue. Thus was enacted the Whiskey Act of 1791. Masquerading as a luxury tax, it was specifically structured to be regressive. In other words more burdensome on the poorer small business and citizen. Small and individual distillers were at an unfair disadvantage to the larger ones. By getting cheaper tax rates because of the ability to pay once a year instead of monthly and increasing production volume, the tax was intended to shut down the smaller competition. Reacting in the only way they knew how, citizens began taking matters in their own hands. Understanding violence is not the solution; representatives were chosen to negotiate with the Government. The tax was modified in 1794 and eventually repealed in 1800. Again, the rebellion was not anti-tax, or anti-government, but FAIRNESS in the treatment, and taxation of the populace.

Using the need to fund wars, or preying on the fears created by economic crises, this country toyed incessantly with the idea of an income tax. Each time it was presented, it was either allowed temporarily, or found to be unconstitutional. That was until 1913. Prior to that year under the Constitution, Congress could impose direct taxes only if they were levied in proportion to each State’s population. The 16th Amendment changed all that, by giving Congress the authority to directly tax any lawful income without regard to population of each state. Coupled with the newly enacted excise tax in business income, the result was the birth of the modern income tax system. In 1916 the amendment had the word “lawful” removed, thus enabling all sources of income to be directly taxed whether obtained legally or not.  This created the ability to enforce the tax law through tax evasion regulation. Prior to these occurrences, individuals earned wages, business made profits, citizens pursued private enterprise, and wealth was accumulated or lost, all with little to no government intervention. This was all fundamentally changed with the birth of the income tax. Government now has the right and need to know about every individual or business transaction. FAIRNESS has been cast aside for the need to fund the largesse of the government.

Fast forward to 1978. Feeling the burden of rising property taxes spawned by surging home prices, angered with the  frivolous spending from the state government, and a enabled by a ruling of the California Supreme court the people decided to stand united once again it what is arguably the most successful tax revolt to date. The Peoples Initiative to Limit Property Taxation, or California’s Prop 13 placed a cap of property taxes to 1% of Value. As well annual increases were limited to 2% unless the property changed hands. By not having any cap on property taxes, a state government could disregard responsible spending by simply raising tax rates to generate more revenue. This tactic was forcing homeowners to abandon homes they could normally afford, if it were not for the excessive property tax assessment. Compounding the problem was the fact that the amount could increase each year by any percentage deemed necessary by the state. Those who wanted to purchase a home were wary to even try for fear of the unknown future tax burden. With help from the State Supreme court that declared the tax code to violate equal protection guarantees, proposition 13 began the modern tax revolt. Its success has made the anti-tax movement a formidable voice challenging state and federal governments and their tax policies. Again we find the intent is not anti-tax or anti government, but to ensure FAIRNESS in these policies.

Today I stand before you ready to embark on the next and final tax revolt for this country. I stand before you endowed by our creator with certain unalienable rights, among them the right to life, liberty and the pursuit of happiness. I stand before you, and declare our rights being violated, announcing the violator to be the United States federal Government and the shackles used to bind our rights as the United States tax code. I stand before you not with a call to arms, but a call to action.  I stand before you reclaiming our right to keep 100% of our income without the intervention of government, and a claim that business should be able to use profits to expand, and grow, not forced to comply with a counter-productive tax code. I stand here before you fighting for my right to pass on my estate and fortunes to my heirs without penalty and I reclaim my right to earn a profit on investment without an additional tax penalty. I stand before you claiming illegals, and black market traders, and drug dealers should pay their fair share of taxes. I stand before you and claim that a tax should be progressive, the more you spend the more you pay and no one shall pay taxes on essential goods and services up to the poverty level. I stand before you and say the power of the tax code must be taken out of the hands of Washington, and placed back in the hands of the citizen. I stand before you and say all this, and more is not only possible, it is imperative. I stand before you and say the solution is THE FAIRTAX.

Thank you and God Bless.

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