The Fair Tax - Government of the Future, or Badly Named Wealth Distribution Scheme?
I was thinking about this last night and at first I was worried because it sounds experimental and we'd have no way of knowing if the theories worked in reality. Then I realized that was wrong. We have seen this movie before.
It's called the Stamp Act of 1765 and the Townsend Act two years later. England had trouble getting enough revenue out of the colonies through traditional means, so they levied a consumption tax thinking it could be widely and easily enforced. They even promoted it by saying the rich would pay the most because it taxed goods the rich were more likely to buy.
A bootleg market exploded in the northern colonies. Rich patriots flaunted their ability to circumvent the taxes. John Hancock – the Donald Trump of his time – was famous for running a massive bootleg empire.
I'm puzzled as to why Neil Boortz can mock our modern government for being unable to win the war on drugs, but yet he believes we can enforce a massive consumption tax system? Boortz freaks out when a guy goes to jail for selling pot. What's he going to do when a little old lady is heckled by police for bootlegging deer meet around her neighborhood?
And you don't bootlegging will happen? It happened in the American colonies. It happened in Nazi Europe. It happened during Prohibition. Right now it happens with drugs, weapons, Cuban cigars, and exotic animals.
Oh, but you say upstanding middle class families would not stoop to smuggling food. Why not? Don't we have millions of upstanding citizens right now stocking up food storage, growing and canning their own food, using cloth diapers, buying candles, preparing for a time when living "on the grid" might be too expensive? What do you think these people will do when a massive consumption tax is a month from being implemented?
You say they wouldn't worry because the consumption tax would replace all the others and things would work out the same. Is it really that simple? Look at it from a mother's point of view. No property tax, no income tax, all you have to do is limit your exposure to the consumption tax. You don't need any money at all. Use the monthly check to pay your rent, get fresh veggies out of your back yard, and just stay home with your children every day. Why would parents not end up doing that?
And business owners. It's obvious you have no idea what small business owners deal with. If a company gets supplies delivered right from a supplier, you can certainly avoid retail taxes. That's called a B2B transaction. But small business owners don't always have the infrastructure set up to receive direct supplies. Many of them just go to Best Buy when they need accounting software, or take a client to Starbucks and pay retail prices for coffee during a meeting. I've worked for small business owners before when they ran out of something and had me drive down to Wal Mart for an emergency purchase. Stores like Home Depot accommodate what they call PO invoices for registered companies to avoid retail taxes. But not every store has the time to do that and not every upstart business has time to register for a PO before opening their doors.
Bottom line, the theories from these egghead professors don't match up with reality on the street. And I'm disappointed that a libertarian like Neil Boortz would fall for it.