Misrepresenting Adam Smith
| Misrepresenting Adam Smith is the name of a Substack article written by Dr. David Friedman. Dr. Friedman’s impressive resume is contained at his web page. Adam Smith, an 18th-century Scottish economist and philosopher, is often called the father of modern economics. His best known work is The Wealth of Nations.
Here are some of Dr. Friedman’s statements: |
- From time to time I see or hear claims that Adam Smith favored a progressive income tax.
- One passage from The Wealth of Nations I have seen offered in support of the claim:
- The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.
- Taxation in proportion to revenue is not progressive taxation but proportional taxation, in modern terminology a flat tax.
- The quote not only is not evidence for the claim, it is evidence against it, important evidence since it is the first of the maxims with which Smith introduces his discussion of taxes.
- Not only is Smith not endorsing a progressive income tax, he is not endorsing any sort of income tax — with one exception.
- Reading further into the passage, he successively rejects taxes on income from capital, taxes on wages, and taxes on the income of professionals.
- The only income he approves of taxing is the income of government officials.
- What he is arguing for is not a tax on income but a system of taxation whose effect is proportional to income; unlike most modern commenters he realizes that determining who bears the cost of a tax is not as simple as seeing who hands over the money
CONCLUSION
Dr. Friedman, the FAIRtax is a proportional tax. Every consumer in the U.S. will in pay federal taxes in direct proportion to what they spend on new retail goods and services and not on their income.
The one difference is that the FAIRtax, through the family allowance named the Prebate, ensures that no person with a valid Social Security number pays the FAIRtax on their purchases up to the poverty level for their family size. In other words, under the FAIRtax, everyone is allowed to purchase their basic necessities tax-free.
While people are beginning to realize the costs of federal regulation, for the most part the most insidious federal regulation that affects all businesses is the Internal Revenue Code.
The FAIRtax frees American businesses and each of us from the tyranny of the income tax.
The income tax must go if we are going to make America great again.
If there is an income tax, any changes to it are only “permanent” until there is a new president whose party controls Congress.
A recent Quantas Insights poll showed that the majority of Republicans, Democrats and Independents are in favor of eliminating the income tax.
There is an alternative that eliminates the burden on individual citizens and reduces the burdens on businesses by over 90%.
This alternative is the FAIRtax—a simple and progressive national retail sales tax on the retail purchases of new goods and services.
In addition to removing the compliance burden on Americans, the FAIRtax also:
- Eliminates income taxes on Social Security—permanently.
- Eliminates income taxes on tips—permanently.
- Eliminates income taxes on overtime—permanently.
- Taxes imports and provides tax credits to U.S. exporters like all of our trading partners.
- Eliminates the need for most tariffs.
- Brings jobs back to the U.S.
- Eliminates federal taxes up to the poverty level.
- Requires no tax returns for individuals.
- Clearly shows the federal taxes hidden in the prices of the goods we purchase.
- Creates greater economic growth.
- Brings in capital that allows productivity increases and higher wages.
- Eliminate lobbyists and politicians selling tax benefits that harm the rest of us.
- ELIMINATES THE IRS!
We need to move now and put a stake in the heart of the income tax and the IRS so that they cannot be easily resurrected by a subsequent administration.
Many of you have labored tirelessly for freedom from the federal income tax and the IRS. You deserve a great deal of credit for your efforts to educate the American people on the need to fund the American government in a way that is good for America and returns freedom to the American people.
It is imperative, though, that we don’t replace the current income tax and the IRS with an alternative system that can still be manipulated by the Ruling Elite. We must let Congress and the President know that the best way to replace the income tax and the IRS is with the FAIRtax.
Make no mistake about it. The FAIRtax is a grave threat to the Ruling Elites. It will strip them of their power and their ability to control us though the tax system. Their opposition to the FAIRtax will be fierce and unrelenting. And don’t think for an instant that they won’t use half-truths, deception and downright lies in their desperate attempt to hang on to their power.
However, with the support of this President, we can finally eliminate the income tax and the IRS!!!
Of course, the best course of action is to not only repeal the income tax and abolish the IRS but to repeal the 16th Amendment as well so no future administration can ever shackle the American people with an income tax again.
We must come together and ensure that real tax reform, the FAIRtax, is not subverted by the Elites in D.C.
This will take the diligent efforts of all of us. We need your financial assistance, and we need your grass roots assistance.
If you have contacts that will allow us to get more information to President Trump about the FAIRtax please let us know.
Please email us at info@fairtax.org and we will give you some options on how you can best help us.
At a minimum, please call your Congressional representative and ask if he or she supports the FAIRtax. If so, thank him/her for their support and suggest they become a cosponsor of HR-25 if they’re not one already. If not, ask why not. If your representative claims to be unfamiliar with the FAIRtax, offer to have someone come to their office and explain it to them.
Please go to this link to invest in AFFT and help us pass the FAIRtax. It’s an investment in your and your family’s future.
THE SOLUTION—PASS THE FAIRTAX!
Why would D.C. pass the FAIRtax and give up this almost unlimited source of donations? The only way that they will is if the rest of us demand it!
Isn’t it time to end this ludicrous tax collection system and the IRS?
HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
Please go to this link to invest in AFFT and help us pass the FAIRtax. It’s an investment in your and your family’s future.