Sunday, January 27, 2008

What is a True, Simple, and Fair TAX?

Strictly speaking we believe that Milton Friedman's critique of Keynes is the best available science to date-- although he is still technically a Keynesian. Our Party is eager to find the next discovery in Economics, as with all the sciences and arts.


The maths which if you are really curious you can look up in a variety of publications, such as;


Taxing Sales Under the FairTax:
What Rate Works?
By Paul Bachman, Jonathan Haughton,
Laurence J. Kotlikoff, Alfonso Sanchez-Penalver, and David G. Tuerck


Other equations may apply, but at the end of the day 11% tax on all income (personal, business, etc.) only once (no sales, estate, savings, or other "double taxation") would basically allow the US Government to have about as much revenue as it currently collects.


The primary distinction is that the tax forms (and there are tentatively only two, one for business and one for personal) are potentially postcard size.


Current Republican "Fair Tax," is a virtual VAT, or National Sales Tax. Although this would be a simplification, the enforcement mechanism would be burdensome to the states (relying upon their existing enforcement of retailers and wholesalers), and we believe this system is open to fraud.


Dick Armey's Fair Tax, (although eventually was combined with the VAT to essentially kill the deal, as Democrats feel this unfairly squeezes the middle class consumers) was close to the Miltonian tax with the rate set at 17% and an exemption for first moneys earned (to exempt lower income earners from tax all together... which led to Republicans hybridizing this reasonable proposal with the National Sales tax).


So we believe, although its not perfect, a straight tax of 10% (1% less than what the government currently anticipates to collect in revenues) would save enough money on a macro level to justify the required budget constraint (with say a reintroduction of congress and the executive to pay-go and balanced budget commitments), and possibly make up for the 1% shortfall.


As for the poor, and low income earners, The State needs to have a social apparatus for any number of reasons (for instance taking care of Veterans who defended our country and come home with mental or physical disability), and as such can issue vouchers as part of that apparatus which (like food stamps) can be used to allow the government to pay itself "agency to agency," so to speak-- transferring treasure from one department back to the general funds.


One final note, as an extension of this Miltonian Postcard, we believe every citizen (even those paying with vouchers) should have a vote on the back of the form to fund any one or more major committee(s). 33% of taxes paid come with Taxpayer discretionary allocation, whereby the Taxpayer can select one or more of the several dozen major committees held by both houses of congress which they would like to see their moneys forward to directly-- without commingling into the general fund.


I wonder what our Education Budget would look like, then, eh moms?


This would further restrict our leaders from improbable spending habits which conflate deficit spending and create rediculous loopholes.

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