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Equal Taxation for All

The debate between those comfortable with the current progressive system of taxation and those pushing for a fair and equitable flat tax is nothing new.  Unfortunately the debate takes on an added fervor in light of our current economic dilemma and the furor over the extension of the Bush tax cuts.  This crises needs to spur us to look closely at the existing tax laws and see them for what they are: tendentious tax laws that hurt rather than help the economy.  Most of us are quick to object when we are being treated unfairly, but it is easy to turn your head the other way when a person or group you don’t identify with is the one being exploited.

Consider the following tax analogy carefully: You decide to get a job mowing laws for the summer to earn some extra income. At your first company meeting the boss says he has 100 jobs for the week and each employee will receive a $300 paycheck on Friday as long as they complete your assigned jobs. You look around and quickly count the ten other employees present. “Ten jobs each aren’t too bad” you reason.  But then your boss says, “I have done a strength assessment on each of you and the distribution of jobs will be based on each of your relative brawn.”

If the employer assigned the jobs the same way we pay our taxes the weekly work would be apportioned as follows:

The first four employees are the weakest, so they will not have to mow any lawns rather they may just stop by and pick up their paychecks on Friday.

The fifth employee would be assigned 1 lawn.

The sixth would be assigned 3 lawns

The seventh would be assigned 7 lawns

The eighth would be assigned 12 lawns

The ninth would be assigned 18 lawns

And the tenth employee, who happens to be you, thanks to your daily sessions in the gym and overall healthy lifestyle, would be assigned 59 lawns.

Besides the obvious unfairness of the situation, how do you think this would affect your desire to continue to go to the gym every day? Rather than motivating you to stay in shape it would discourage it. You may even decide to eat a box of Twinkies every day to make sure you are not the strongest person when the boss allocates the jobs for the next week! Ridiculous? We are doing the same thing to our wealthiest Americans.  It is a common misconception that the rich are greedy, spending their evenings rolling around in their wealth like Scrooge McDuck. The opposite is usually true. Compare Forbes list of the 400 richest people in America with Bloomberg’s list of top philanthropists and you will find an impressive correlation.  Their millions in contributions are doing way more to change the world than the five dollars the average person throws in the Salvation Army bucket at Christmas time.

Warren Buffet and Bill Gates started a campaign called the Giving Pledge. They asked fellow billionaires to give away 50 percent of their wealth to charity. Several have agreed. Besides the amount they donate, the money they give is also purposed. Most wealthy people got that way by knowing where every dollar is spent and managing their money and their companies in a way that generates the greatest possible revenue. The richest people in our country are also some of our greatest innovators. They not only create new jobs, they create entirely new fields. Think of the computer field and all the people it provides jobs for? The more money in their pocket the more they are able to invest in our economy, create industries and jobs, and fund organizations that are improving our world and providing a better life and future for people across the globe.

Let’s contrast that with the way the government manages their money. Put that same amount of money in the governments hands and they will most likely waste it, misappropriate it or possibly even lose it. The GAO reports approximately $350 billion in waste and fraud every year. In addition obsolescence, duplication, program overlap, lack of accountability, and plain old financial mismanagement wastes billions more.

If you want a clear understanding of how the government handles money give $500 to your 16 year old and hand them the keys to the car for the day. Upon their return the gas tank will be empty. They will have no money left and a very foggy recollection of where any of it went. All they will have to show for it is a bag with a pair of $85 dollar designer jeans and a $40 dollar t-shirt, as well as several empty cups of $4 frappachinos littering the floor of your car.

The flat tax is fair to everybody. There are no loopholes, only a standard deduction based on family size. Each person simply fills out a simple postcard with their labor income minus their allowance based on family size. The IRS then gets a flat percentage of the remaining amount. That’s it. What are the benefits? A flat tax will speed up economic growth, create wealth, improve our global competiveness and it is blessedly simple. Check out http://www.freedomworks.org/issues/flat-tax to learn more about the flat tax and then make your decision. What will it be? Are you going to leave the $500 in Warren Buffet’s pocket or would you rather tuck it in the pocket of you teenager’s designer jeans? It is not a difficult choice. Besides, I bet Warren Buffet would fill up your car before he returned it….he might even take it through the car wash.

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26 comments

  1. We need to get rid of carl marx’s graduated income tax.It operates unconstituionally and makes us worse slaves than the blacks ever were.The gov is saying they own our labor and therefore have the right to tax us as they choose.
    We are the sole owners of our labor and have the God given right to trade it for what WE want,and the gov does not possess any rights to steal our substance from us,especially with a dishonest money system. Be that as it may a income tax would not and has not been constituonal since they first started to try and enact one in the days of Lincoln.
    They have done another thing that is uncostituioal with the income tax,and that is social change and they had the audacity to admit that a few years back and the so called justice system never did a thing about it. Every tax case that had ever come in front of them should have dismissed the next day,
    I guess I have ranted enough.

    • Dear porpaintt
      I share part of you unrest concerning the income tax- but your calling it Unconstitutional is just not so- see losthorizons.com for indepth detailsas to why this is so (Hint: We have been fooled)- As for the author of this article, he floors me with his ignorance of our Constitution; along with all those who ride this bandwagon. This article spils over with a total lack of understanding of the oh so loathed income tax. I would like the author to spell-out the exact Constitutional article that would allow for a flat or fair tax- Then who gets to decide whats fair/flat?. I do not recall the Constitution even being mentioned in the article at all- This is evidence on its face of his taking for granted the Federal branch has power to do as it wishes.This type of mindset is the very reason our country is in the mess we are experiencing today – This is beyond sad – but knowledge is power, so stop being mislead and learn the REAL TRUTH at- losthorizons.com

      • The Constitution of the United States
        Article I – The Legislative Branch
        Section 8 – Powers of Congress

        The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
        (and others)

        Amendment 16 – Status of Income Tax Clarified. Ratified 2/3/1913.

        The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

        http://www.usconstitution.net/const.html#Am16

  2. Warren Buffet and Vill Gates??? What a classic misconceprion. Both are members of a cabal out to destroy us. Their charitable contributions are a drop in the bucket compared to how rich they are. The banks are managed by rich people. They were supposed to be too big to fail. Then why did our government give them billions to bail them out. The cabal that is out to destroy America are able to do so because they control the world’s wealth. So the rich virtualy contribute to poverty for the masses.

    • Dee Jay, You really have it in for those rich guys, don’t you?
      JW, how about apportioned taxes as per the US Constitution?
      If states got their federal tax bill, per population, how they collect it would be up to them, and no federal tax on citizens at all.
      The US. govt.might impose duties & tariffs, and SHRINK considerably!!
      Gold & Silver for money again as per the Constitution has government limited, unable to spend what they can’t make out of thin air. As Jefferson said, no intergenerational debts.

  3. I would agree with this, SANS the deduction for family size. That is the type of logic that got us to where we currently are. A family should not be rewarded or penalized on the size of their family. Flat is flat ~ Otherwise its hard to dispute the logic in either a flat tax or a consumption tax

  4. I agree JW, a flat tax is a flat tax. I think this would need to be implemented over a ten year or so time frame so the” good people” who are on welfare and food stamps could get their act together. I don’t want to hurt their offspring as they were simply born into the circumstances, however this would teach the people of America there is no more free lunch on the back of others.

    • I totally agree, and would like to bring up the point that taxing everyone the same rate reguardless of class or status is the only way to rectify the current situation. Based strictly on income is the only fair way to ensure all americans pay their share. It is NOT wrong to tax a person who only makes 15,000.00 a year or less, do they not enjoy the benifits of America the same as everyone else. In simple figures 330 million Americans with an average of 40,000 a year in income is roughly 1.3 trillion a year in tax revenue alone. Treat Corporations the same and we will be once again the most prosperous nation in the world. Quit paying people not to work and follow the wisdom of Ben Franklin make the uncomfortable in thier poverty so they do not remain there. Cut the fat from our budget and get out of our lives government. Let Americans be the Nation others envy once again. Thanks for reading this.

  5. I will not negotiate with others for my property.
    People that do are nothing more than slaves.

  6. The flat tax, while seeming to be fair, completely misses the point of this entire discussion. Is it constitutional for the federal government to assess direct taxes on the citizenry of the various states? The courts have determined that an income tax on corporations through the 16th amendment to the Constitution is legal because corporations are legal entities created through the government. Are you a legal entity created by the government and beholding to that government for your rights? I suggest you are not.

    The other half of this question centers on whether or not the federal government has the constitutional ability to take money from one man and deliver it to another, through whatever distributive program, without full compensation to the one who has been robbed by the taxing authority. I cannot steal from my neighbor nor can I authorize a government in my name to steal from that same neighbor and give his goods or money to me. This is exactly what direct income taxation, in whatever dress it wears, is designed to do.

    The discussion is not about the fairness of the flat tax. That is the proverbial straw man. It is and must alway be about the moral and constitutional foundation upon which direct taxation of the American citizen rests.

    • Very well put Mike, we have been so bombarded with excuses for life that it seems we can hardly function anymore. For some time it has been oh the poor kid’s or we will have to fire all of the police and firemen ect this has gone on for so long our society is almost dysfunctional. People today do not bear any responsibility for family or themselves, some would have six children and figure it is our problem and not thiers. The heck with grama and grandpa where is the nearest home that the state will pay for. We just keep making up new rules so we can screw each other and still feel good about it.
      I have taken one overriding lession from the old testament that I have never heard anyone else admit to. And i believe it is the most important one, the chosen people never took any responsibility for themselves and blamed God or Moses for every ill that ever befell them no matter what they were givin, mana, quail, water, their clothes never wearing out nothing. Why because it all came free and easy. Just maybe our father like parents today gave to freely. God’s punishment was harsh but never changed his people. I think then like today we need a little more skin in the game, self respect, confidence, love of others comes comes through involment and commitment and yes also trial and error.

      See you on the other side

  7. We need to completely eliminate income type taxes. Everyone should keep all they make and be taxed on what they spend. If anyone doesn’t know of or has not heard of the Fair Tax I urge you to go to , http://www.fairtax.org/site/PageServer ( not a link ) and read up on it for yourself without jumping to any conclusions before you really find out what it is, The actual Bills in Congress are, HR 25 and S296, HR 25 is a whopping 131 pages long – something that can actually be read and understood, what a novel idea. You can view it here, http://www.gpo.gov/fdsys/pkg/BILLS-111hr25ih/pdf/BILLS-111hr25ih.pdf
    This is one thing that would redefine our tax and political system and actually be good for the economy.

    • I echo the thoughts of Dennis concerning the Fairtax, which is not an income tax at all. As he states, it is a consumer based tax that completely abolishes the IRS and any type of income tax return filing. Your earned income is what you bring home. The tax comes in on the spending end of the equation, so if you spend more you pay more in tax. You decide, not the government. Under this system, the tax is shared by ALL the consumers in our country, not just those who currently file returns.
      Learn about it, go to Fairtax.org. There is a lot of misinformation on it, so don’t listen to anyone, go and see for yourself.

      • So, according to Mike, 13 Dec 2010, the term “income” is defined to be limited to corporations, and the individual is not a corporation.
        While the Flat Income Tax has merits, in that it deprives our politicians of manipulating the masses through deductions and credits, the “Fair Tax” is also a flat rate tax, but collected on the spending part of the equation. At that point, the retail point, it may be argued that it becomes corporate.
        At any rate, whatever tax plan we use must comply with our Constitution. The politicians hate that. They can’t stand the people being free and making their own decisions.
        The problem I have with the Flat Income Tax is that it incentivizes NOT having a job. An income tax, by definition, punishes earnings.
        Retailers don’t want to be bothered with the added burden of collecting and reporting sales taxes to Washington, either. Something has to give. I favor giving up the IRS.

        • Don’t pay people who don’t work.

          • All states already have sales taxes – therefore retailers and service providers already collect them – and under the FairTax, the states would collect the Federal portion and in fact get paid to do so – so no additional work is needed ~ Read the Bill or go to the website for more specifics . . .

          • According to the The Beacon Hill Institute calculated that the base for the Fair Tax would be 81% of 2007 GDP, or $11.2 trolilin. A 23% sales tax would collect $2.6 trolilin, which is $358 billion more than the income tax that it would replace. Look at the bigger picture, Where will the government all this money to fund all the basic services such as health care, transportation, sanitation. You are also enjoying the benefits.

  8. These same “philanthropists” are the ones who own the “charitable” companies. These same elite were the ones who created “non-profit” corporations as a way to hide their wealth and not pay taxes on it. However, all the money they give has strings attached to it. This is how they control what gets taught in schools (through grants – oh, you thought those came from the government?). This is how they control what scientists study, learn, and teach while they themselves have technologies way beyond what’s currently available to the public.

    Let’s look at Bill Gate’s current eugenics program shall we?
    http://www.activistpost.com/2010/12/viruses-and-gm-insect-flying-vaccine.html

  9. The point I was trying to make in my previous post was not about the fairness of a consumption tax versus an income tax. My comments focused on the constitutionality of the federal government imposing direct taxes on the citizens of the several states. An income tax is a direct tax on the earnings of the individual and is prohibited under the original intent of the framers. The fair tax is a direct tax on the consumption, it appears, of the individual. It is therefore still a direct tax and prohibited. Does a prohibited direct tax change it’s nature if it comes on consumption rather than income? It does not. It is just as direct a tax as the income tax. It attaches to the individual citizen in violation of the constitution.

    The constitution specifically lays out how the federal government is to be funded. In reality it is impossible for those methods to completely fund the out of control spending government we currently have. Let’s say the fair tax is adopted regardless of my point above. Will the fair tax rein in the gluttony of this government? I suspect it will not because it opens up untold amounts of new cash coming into the federal coffers without any restrictions, I suspect, on the government’s lust for expanding power. More cash equals more programs equals more dependency on government equals more control over the lives of individuals equals more programs . . .

    I come back to my first point. Is it constitutional for the federal government to tax the citizens of the several states directly. If the answer is no, then we should be doing something about that instead of worrying about implementing a different type of unconstitutional tax collection system that simply continues to feed the ever expanding, out of control government spending and corruption we have today.

    • You are absolutely right, Mike. However, I think there is more to taxing than meets the eye. As you all are aware our currency does not belong to We the People but to a private corporation and at least a part of our national debt represents money We the People owe the megaBankers for the use of their money; but also those who by control the nation’s money supply, control the nation’s economy without detection. These same megaBankers promote a One World governmen because they would supply the world’s currency. As Meyer Anselm Rothschild said “Permit me to issue and control the money of a nation, and I care not who makes its laws.” As our leaders continue to spend We the People into debt we will find ourselves in the same condition as England. As you recall it was once said “the sun never set on the British empire,” but it,too, became indebted to its banker, “The harlot of Threadmill Street, ” a privately held institution. Income tax is also a plank in the communist manifesto. There’s more going on to merge this nation into world socialism than most suspect or imagine.

  10. It seems N8C has done his homework. But please be careful. The “Original Constitution” was defining taxes and duties etc. as “stuff” and imports. It never gave permission to tax labor which is a form of slavery. N8C also included was the 16th Ammendment, which is the beginning of our problems that we know today. The 16th Ammendment, Federal Reserve, and the IRS were all unconstitutional. Where does the Federal Reserve borrow the money from to give to our government? Nowhere! It’s created from nothing, mearly printed from thin air. So, who do we pay the interest and Federal Debt to? And where is all our hard earned tax money going if there really isn’t an entity to pay the interest to? Many have asked our government and the Federal Reserve for an accounting or audit of our money. They have all been denied, unanswered, and thrown out of court. Very interesting. There defence is “no reply”. I’m sorry, but taking the fifth on accounting for our finances is not acceptable.

    Maybe someone can direct me to where I read that no citizen is required to pay a tax on their labor. However, all government officials are singled out specifically to pay an income type tax. Please help, I remember seeing that someplace. Thanks.

    Mike

  11. Please be careful not to confuse or interchange a “Flat Tax” with the “FairTax”. They are not the same. The “FairTax” is a specific Bill developed by a group of citizens and given to Congress. It does solve many of todays and future financial problems. There are books and websites on it. I cannot imagine why it has not been implemented yet, other than it abolishes the IRS, and eliminates all individual and corporate taxes once and for all. The only tax is at the register just like a sales tax. It’s difficult to cheat, everyone pays. Even criminals and illegals pay. You only pay on new purchases. Not on used cars, used clothing, not even houses unless you are the first buyer. So the less fortunate folks have an oportunity to pay less if needed. Before you get all excited about a newer huge sales tax, keep in mind it lowers the manufactured cost of every single thing we produce. Now jobs and manufacturing can easily compete in World markets. The cost of manufacturing will plummit like a rock. Worldwide businesses will be tripping over themselves to bring jobs INTO this Country. Your entire paycheck comes home with you, and no one gets a piece of it without your permission. There are no other taxes!

    Mike

  12. So would your proposed flat tax be on gross or net income? If on net how would you define deductable expenses. (Here we are back with a huge and undecipherable internal revenue code again!) If it is on gross then many fairly desirable, but low margin businesses (like farming and the grocery trade) will be taxed out of business in the US and those who wish to buy from such businesses will be forced to travel abroad to do their shopping.

  13. I appreciate you taking the time to create this publish. It has long been extremely useful to me in fact. Enjoy it.

  14. I still don’t understand why people go on and on about fair taxes and flat taxes, which are neither fair nor flat. Maybe your tax rate is flat, but that still means that the more I earn or spend, the more tax I would have to pay. All such taxes, in my opinion, are only half measures, and still allow what I would classify as a “Robin Hood” approach to taxation.

    Why do you call it a flat tax, if it is still based on income? At best it could be called a flat-rate tax. A flat tax would be, $X per person per year. Regardless of your earnings or spending. That way, we would leave as much money as possible in the hands of people most entitled to determine where it should go. Why should I pay more taxes than you, just because I have more money? I don’t understand that. Head taxes were important sources of revenue for many governments from ancient times until the 19th century. This way, there need be no exceptions, no loopholes, and the entirety of our tax law could be contained on one page of text. In fact, at current budget levels, with the population that we have:

    let’s say 310 million people, (http://2010.census.gov/news/releases/operations/cb10-cn93.html said 308,745,538 in April 2010),

    and,

    according to
    http://en.wikipedia.org/wiki/2012_United_States_federal_budget#Total_revenues_and_spending,
    “The enacted budget contained $2.469 trillion in receipts.”

    That means that in order to take in all the revenue from individual income tax, corporate income tax, social security, excise, customs duties, estate and gift taxes, etc…, a per-head tax would have to be about $8051.

    I know that seems like a lot, but #1, THIS IS THE DEBT THEY ARE RUNNING UP ANYWAY! This just makes it clearer. #2, This would REPLACE the taxes listed above. I know that between U.S. income taxes and social security alone, I paid close to that last year. (I probably earn slightly above “average”)

    But think of this….

    –> If there were a per-head tax, then every person in this country knows that IF I WORK HARDER, I AM PAID BETTER. Instead of my taxes going up, I am richer for having worked overtime, or taking on a second job. The premium on initiative used to make this country great.

    –> Every citizen will become more interested in the money our government is spending, because WE WILL HAVE A DIRECT INTEREST IN REDUCING GOVERNMENT SPENDING. Under the current system, if Government spending is reduced by half, my tax bill will stay the same. This serves a dual purpose of putting an incentive on good Citizenship, and putting a definite choke on rising taxes.

    –> Illegal immigration becomes DESIRABLE, because it spreads the tax base. With more people coming in to this country, the denominator of the tax equation gets larger.

    –> with no corporate income tax, there is a great incentive for corporations to bring jobs back to America.

    If someone can find a flaw in the logic here, I would love to hear it. I am convinced that this is an excellent solution to the problem of taxation. Now if we could only get some sound money behind it.

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