Libertarians:

For the most part I view libertarians as essentially a quirky group but generally harmless. Their main reason for being in business seems to be to rid illicit drugs of the “illicit” label. They believe that individual freedoms trump societal convention. I would tend to agree with that belief except I believe Personal Responsibility should be at the top of the agenda. For example, if someone wishes to fry their minds with drugs, be my guest. But upon frying one’s brains don’t send me the bill for care, therapy and rehabilitation. Libertarians may very well agree with me here but you don’t see them  triumphing because as a society we do tend to want to help those who are in need even if they created the need themselves. It’s not unlike the Menendez brothers who murdered their parents and then begged for mercy on the grounds that they were now orphans. So from my point of view, we already begin with a set of unintended consequences that we may not be able to control. After all, how much “personal responsibility” do drug abusers have? They certainly don’t give a darn about how their actions affect family members. No, it’s always “just about them”.So, when the Libertarians propose a radical departure in how we fund our government, no matter how inane that government continues to be, I can not help but think that these guys have been “cheesing” way too long.

From what I see, if Libertarians were to be true to their philosophy of free love, free drugs and free of government in most of it’s entities, there are far more important areas in which to begin. But I don’t see that happening.

Chapters 1 & 2

A curious thing about these first two chapters is the in the history of the income tax. Another clever trick used by the authors is the introduction of a factoid thought (by the authors) as too obscure for the general public. I believe the thinking goes, “if I detail a generally overlooked piece of information, no matter how obscure, then I must be recognized as having much more insight into a position than you have” thereby giving the trivia king a modicum amount of credibility above the readers. If it’s true, it also demonstrates to me my position that the authors seek the lowest common denominator in their Tax Cult. They mention that the “The Civil War” was not truly a “Civil War”. This is absolutely true. I learned this in tenth grade history class. A civil war entails one group struggling with another group for control of the government. That is not what happened in 1861. But for the Boortzheads, this is further proof of their Leader’s infallibility. “Oooh”, they moan. “He must be truly blessed with brains. I did not know that”. If they did not know that, they have a good case for a lawsuit for failure to educate against their respective school districts.

Granted, the undereducated who continue to print the school text books are also at fault, so we have a whole other class worthy of a lawsuit. But, the bottom line is simply, it is common knowledge. People like Jim Jones have used this technique successfully in the past to gather together servants. Tell them something they may not know and most will be impressed. Finally, as you may have guessed by now, it has nothing to do with the Income Tax problem we are dealing with today. It is a set up by the Boortz and Linders of the world to hook you, much like a brook trout, by enticing you with superfluous information which is better suite to a Jeopardy match than a thoughtful forum on tax reform. So, the history of the Income Tax is a fascinating one which you can read anywhere else. I recommend it only because I am a history nerd.

The section I found uproariously funny is on page 12. In it, the authors mention how the government pushed the Income Tax in 1894 after a stock market crash. It was called “…an act to reduce taxation, to provide revenue for the government, and for other purposes”.  In the footnote Boortz says “that assigning names to mask the true purpose of the legislation is a time honored practice in Washington”  Much like dubbing something “Fair” Mr. Boortz, Mr. Linder? Who determines ‘fairness”? 

In chapter 2, the authors also get it mostly right in how we came to have regular withholding. Yes, the government always wants more money and they want it as soon as possible. Yes, weekly withholding was born of World War 2. However, he goes on to accentuate his belief that Washington viewed “withholding as a tool to be used against taxpayers…”  I’m sorry. I dislike the government for many reasons, mostly because they are inept but even I can not believe that in the midst of a terrible and extremely expensive war being fought on two fronts, that uppermost in the minds of the leaders of the time was the use of withholding tax as a weapon against their own citizenry. Yes, I am familiar with the concentration camps erected for Japanese Americans and yes, I do believe we have always had a racist bent and government is merely the arbiter of acceptable racism at any given time, but to believe they would want to fight a third front of the war with their own citizens is way too much for me. Now, in later years, yes, the IRS has become a weapon against some of the citizenry. Think Al Capone. Was that the ultimate example of (insert favorite example) envy?  The government was so obsessed with bringing down Al Capone which they could not do with all the resources of the police and FBI that it took the IRS looking at his bank accounts to do the job. This was one of the most hollow of victories. We will be getting to the main reason the “Fair Tax” has been constructed in a future post which will entail this purpose.

Keeping in mind that the government wants money any way they can get it, and that Fair Taxers claim their tax scheme will snag everyone, including criminals, have you been able to spot the unintended consequence and the fly in the ointment yet? Don’t worry, we’ll get there.  

The Myth of Corporate Taxes. (Chapter 3)

Now really, is there ANYONE who ever believed corporations paid taxes? This chapter is only necessary for the truly mentally impaired in the audience. Of course corporations do not pay taxes. They are and always have been chiefly tax collectors for the government. Which means we pay twice. Once for the taxes themselves and secondly for the service charge incurred by the corporation to collect and remit said taxes. Again, I see the Flavor Aid being prepared. (Side note: See? Anyone can come up with a useless factoid to impress those who are easily impressed by trivia. Flavor Aid was the name of the cyanide laced drink, not Kool Aid, used by Jim Jones at Jonestown on his easily impressed followers. Getting thirsty yet?)

Does anyone not see that if we decide to go to a consumption tax that we will still be paying twice? Every single business, those that are taxed now and those that are not, will be charging to cover the expense of collecting those taxes and passing them on. So what’s the benefit?  Stick with me, we’ll get to what is really going on eventually. An embedded taxation is not the whole story. Cost of Compliance (Chapter 4)The authors concentrate on the tax forms and how much it costs the country to fill out these forms. When you add up the costs to everyone in the country, yes, it is a huge amount of money. I pay nearly two hundred dollars every year to have my taxes done mostly because I want to stay out of jail. Missing out on 24 or Monk is not an option. However, with a slight amount of misdirection, the authors claim many homeowners lazily opt out of claiming mortgage interest as a deduction. Is this foolish? Not necessarily. Keep in mind that not all government entities are completely inept. They have available to them the best computers and programmers in the world. Formulae are written to cover nearly everything one can imagine and many we can’t. They live for this stuff. For many years we did not do the long form allowing deducting mortgage interest or anything else. Why? Because the formulae constructed made it simpler and cheaper to do the short form. Why waste all that time and energy? Not that we did not double check it, we did. Even the year I racked up over $9,000 in extra medical bills (out of pocket) it was still cheaper for us using the short form. The waste of time on our part is an expense which can not be reimbursed. I only mention it to show that sometimes (and it is a very rare time) that even the government prefers simplicity. So, berating “lazy” taxpayers for not taking every single deduction is another sleight of hand. One thing we can give credit to the Fair Tax folks for is pointing out how much better the Flat Tax will be. No complicated tax forms. The Flat Taxers had, as a show and tell example, a tax form that fit quite nicely onto a postcard. The only thing I disagreed with them on was the percentage. I think 10% is more than enough and absolutely no one would get any exemptions. Going hand in hand with a flat ten percent tax would be a roll back on benefits grabbed by our leaders. Naturally, that will never happen. Before you make a decision about anything, educate yourselves on what the leeches have granted themselves in pay and especially benefits now and after retirement that we are on the hook for ad infinitum. King George III would be envious. I know Al Gore is happier than a pig in slop with what he fleeces us of every year in his retirement. Ask Congressman Linder what he gets. We are now at page 50 and the authors have yet to detail one thing about the Fair Tax. Anyone getting antsy yet? This concludes Part 2

To Be Continued…