US Financial Crash Avoidable by Changing Tax Systems

Monday, 25 Feb 2013 02:57 PM

By Denis Kleinfeld

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Everyday, news sources have articles, commentaries, reports and white papers that bombard us with fearful tax horror stories.

Targeted persecutions (called investigations). Whistleblowers (what used to be called snitches). Billions of dollars lost to identity theft and fraud. At every step is the threat of criminal proceedings since penalties of perjury apply with everything said or provided to the government.

The tax system, along with the government’s normal dealings with its citizens and taxpayers, has become the reality that was foretold by George Orwell in his fictional work “1984.”

The income system in the United States today is a witch’s brew of boiling class warfare, political payoffs for campaign contributions, bribe-the-voter schemes, ideological social scams and all sorts of evil ingredients.

It’s poison to the body politic.

Many are convinced this potion is necessary for tax justice and therefore fair. I have always wondered that if tax justice is called for, then where is the tax injustice? If somebody is not paying any tax, then how can they claim they are suffering by being treated financially unfairly?

Can this be right that the government has the right to steal your hard work to give to somebody who didn’t earn it?

There is no disagreement that some sort of tax system is needed to pay for a government that provides basic services necessary for personal liberties and a free-market economy to flourish.

A government where everyone enjoys equal protection of the law.

With that said, then where is the equality when one group pays higher and higher rates of tax for virtually the same benefits from the government?

While every tax system has problems, the one the United States has now, an income tax regime, is feeding the political cancer that is killing the country.

Radical surgery is the only way to destroy this financial and economic cancer.

The needed procedure has been introduced by Sen. Saxby Chambliss, R-Ga., in the form of S.B.122, the Fair Tax Act of 2013.

The purpose of this Act is to repeal income tax, payroll tax and estate and gift tax, and abolish the IRS. Under this bill all of those taxes would be replaced by only one tax — a national sales tax primarily administered by the states. No need for a vast and unaccountable federal tax bureaucracy.

Basically, paying federal tax would be no more complicated than when you go to your restaurant and at the end of the meal you pay both the bill and the tax.

Under a consumption tax system the success of the economy would be in consuming, saving and investing.

Ultimately, all taxes are a form of sales tax whether imposed directly or indirectly. Every company or person selling goods or services has to put into the price the cost of taxes. Otherwise, how would anyone or any company have a net amount of money after tax in order to survive?

At some point, which is rapidly approaching, change will be made in Washington, D.C., because there will be no other political choice. At that point a sales tax system will be promoted by the politicians as the savior of our way of life.

Sen. Chambliss is only a little ahead of the curve.

What do you envision will happen then?

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