Math is (Apparently) Complex, the FAIRtax is Not

In the weeks and even months prior to election day, as well as on Tuesday, November 8, 2022, Americans went to the polls and exercised their precious right to vote in our midterm elections.  For many decades, the results of our country’s elections were expeditiously tabulated on election day.  Precinct by precinct, voting totals were reported to the state for public dissemination and before the night was done, everyone knew who won and who lost. 

In the past two election cycles however, it appears that our ability to count, primarily the application of addition and summation, has been significantly degraded.  Of course, certain jurisdictions appear to have more difficulty than others, but the overall degradation of the system raises the question of complexity vs. simplicity.  In days past, except for a relatively small number of absentees, everyone showed up at the polls and voted on election day.  Now there are multiple new ways to vote, collect votes and verify votes.  Supporters of these new extensions argue that it makes the process easier and encourages more participation.  But all this added complexity comes at a cost.  It now takes weeks, or even months, to get the final results.

The idea of complexity vs. simplicity also applies to one of our government’s largest and most complex enterprises—our system of taxation.  On one hand, we have the incredibly complex income/payroll tax system.  The simple alternative that we read about today is the FAIRtax.  As we consider complexity vs. simplicity, let’s examine what our brilliant thinkers of the past had to say on the matter.  Occam’s razor is represented by a famous Latin phrase that reads, pluralitas non est ponenda sine necessitate.  This translates to plurality should not be posited without necessity.  To simplify into more modern English, the simplest explanation is usually the best one, or entities should not be multiplied needlessly.

Truer words were never spoken.  While Occam’s razor is not a principle of absolute truth, it is certainly a well thought out guiding heuristic that is founded in wisdom and can be of great benefit to us.

Following Occam’s razor, which system of taxation is simpler?  Even those employed in professions a million miles away from accounting and taxation can readily answer this question, but let’s examine a few facts and let you the reader, much like our U.S. voters, decide the matter today.

The income and payroll tax:

• U.S. taxpayers spend over $300 billion and 6.5 billion hours per year complying with the income tax
• Americans file nearly 300 million tax returns with the IRS every year
• The payroll tax is regressive & is the largest tax paid by the majority of Americans
• The income tax strips away many protections in our Bill of Rights (e.g., self-incrimination, right to trial by jury of our peers, illegal search & seizure, free speech, etc.)
• The IRS’s annual budget, prior to the Inflation Reduction Act, is nearly $14 billion
• The US is one of only two countries in the world that taxes its citizens’ worldwide income.  Americans living outside the country must pay US income taxes, interest and capital gains taxes in addition to the income taxes levied by their host country
• Embedded taxes (10%-25%) are ingrained within the retail price of goods & services we buy
• It’s nearly impossible to contact the IRS for help with basic questions, and those fortunate enough to get through don’t always get accurate answers
• The income tax constantly changes and is one of the most heavily lobbied areas in D.C.
• Over 75,000 pages of statutes, rules and regulations comprise our income tax code
• Over 200 million individuals and companies are tax collectors, receiving nothing for their efforts

The FAIRtax:

• Founded on the principle of simplicity
• No IRS and no income tax returns (6.5 billion hours and over $300 billion per year saved)
• Keep your entire paycheck (no federal or FICA tax withholdings)
• Do not pay taxes on life’s basic necessities (receive a prebate direct deposit every month)
• More progressive and thus more fair to America’s working poor
• Businesses do not pay the FAIRtax on their purchases
• Only retailers charge and collect the FAIRtax from their retail customers
• No income, gift, AMT, or death tax for individuals or businesses
• Pay a consumption tax, the FAIRtax, once and only once on new goods and services
• Embedded taxes (10%-25%) fall out of the cost of our retail purchases
• Only a little over 100 pages of FAIRtax legislative language (H.R. 25)
• Retailers and states retain 0.25% of collections as payment for their tax collection services

Assuming our federal government not only has room to improve its general operations,  management, oversight, administration, federal election guidelines, and legislative and rule making processes, but also has room to improve its tax collection system, which of the two alternatives above would we choose, if we were to follow the principle of Occam’s razor as described above?

Rhetorical questions are usually the best, as the logic displayed makes contemplating the alternative choice laughable.  Unfortunately, our current taxation system does not follow Occam’s razor, but rather follow’s Hiccum’s Dictum, which hypothesized that patients might have multiple complex symptoms and diseases.  Although these competing pearls of wisdom emanated from the medical profession centuries ago, the scientific community relishes Occam’s razor and finds its wisdom essential to scientific advancement and problem solving.

So, if we could remove all the noise, the lobbyists, the campaign contribution cycle and system, the political class-warfare of the income tax code, and the hamster wheel feeling of inertia that our income tax system embodies and we could start fresh from day one, which taxation system would you vote for?

WHAT CAN EACH OF US DO? 

We can write letters and make calls to our elected representatives demanding that if the government really wants to eliminate the burden of filing income tax returns, they should enact the FAIRtax and do away with tax returns altogether.

The great 18th century Irish statesman Edmund Burke made a statement that applies in many ways,
 
“Nobody made a greater mistake than he who did nothing because he could do only a little.”

Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:

“If you want a picture of the future, imagine a boot stamping on a human face—forever.”

Take back control!   Help us PASS THE FAIRTAX!

The IRS will be gone and we will pay our taxes when we make purchases.  

WE and not the Ruling Class and their minions in D.C. will decide how much federal tax we pay!

If you have friends who don’t know about the FAIRtax, send them to  FAIRtax.org.  Have them watch the white boards under “How It Works” and, if they agree, ask them to please join us.

Then contact your Members of Congress and the President and demand that Congress pass -the FAIRtax—the only fair tax. 

Is it hopeless?  When confronted with a seemingly impossible problem, remember the statement attributed to the author George Bernard Shaw who wrote, You see things; and you say “Why?”  But I dream things that never were; and I say “Why not?”

Isn’t it time for us to ask, “Why not?”