DEMOCRACY, DEMOCRATS, AND TAXES

In response to The Salvation of 2008, TTPer "Bogie" was thoughtful enough to post on the User Forum a list of 50 reasons for The Fair Tax.

Together, they make a pretty convincing case for replacing all personal/corporate income taxes, FICA payroll taxes, gift/death taxes and the AMT with a national retail sales tax.  I would add #51, the end of the depreciation schedule for a business' capital expenditures.

Yet there is another overarching reason for the Fair Tax replacing our present tax structure, which is that it is vastly more democratic, and provides a far firmer and more stable foundation for a democracy.

Which is why Democrats are against it because they don't want a real democracy.

Take a look at the Who Pays Income Taxes charts from the National Taxpayers Union.  You'll see that over the last several years, the percentage of total income taxes paid by the top 1%, top 5%, top 10% of taxpayers has gone up, while that paid by the bottom 50% has gone down.  1% of taxpayers now pay almost 40% of all personal income taxes, while 50% pays 3%.

How dangerous this is for a democracy can be seen with this simple image:  imagine balancing a pyramid on its point.

Making our government – making our national defense – dependent upon a tiny fraction of folks is just as risky.  The whole multi-trillion dollar edifice of government depends on mulcting this 1% — and if they shrug off the burden, say by moving their wealth and companies offshore which is so very easy to do now, Washington is in Chapter 11.

The other enormous danger to an inverted pyramid of taxpayers is that a majority of taxpayers have little or no skin in the game.  If you have no skin in the game, what do you care how much others are ripped off so that you get government goodies for free?

The present tax structure is enormously biased towards continual government expansion of spending and power.  When everyone has skin in the game through a national sales tax, there will be a far bigger consensus for less government spending resulting in a lower tax rate.

Which is why, again, Democrats hate and fear The Fair Tax.  It will reduce their capacity to tax and spend and control and engage in "tax the rich!" demagoguery.

Which is why Charlie Rangel and the Democrats in Congress are selling the greatest tax increase in US history as a "tax relief" plan.  Rangel wants to raise the top tax rate ("soak the rich!") to 44%.  For anyone self-employed and has to pay the full FICA Social Security/Medicare payroll tax of 15.3%, almost 60% of his income will be stolen by the Feds – and that doesn't include state income taxes.

This is simply and absolutely ruinous not only to our economy but the very fabric of our democratic government.

If ever there was an opportunity for the Republicans to offer a clear alternative to this fascist disaster, it is now.

At every opportunity, the Democrats in Congress are attempting to raise government spending and taxes in the most pernicious ways.

An instructive example is the Democrats' including "self-verification" in qualifying for SCHIP health care for low-income children.  All you have to do is "self-verify" that you're a US citizen and you're in the program – an open invitation for illegals.  This is one of the reasons Bush vetoed the thing.

Some fifteen months ago, a Republican Congress began requiring an actual birth certificate to qualify for Medicaid.  Since then, 500,000 have been refused, most all of them illegals.  That's many billions saved in little more than a year and the savings keep coming.

But if the Dems get away with self-verification for "the children" in SCHIP, it's their announced intention to then expand it to Medicaid, eliminating the birth certificate requirement.

This will never stop, the Dems' constant attempt to seize more money, more power, and unravel the fabric of our society.  The Fair Tax, besides the specific economic benefits listed by Bogie, has more potential than anything else on the table to halt and reverse the damage Democrats are doing to America.

Will the Republicans have the brains and moxie to campaign for The Fair Tax in 2008?  That may be the make-or-break question of next year.