Delete the IRS!
January 28, 2010
The Internet has already eliminated many things, from travel agencies to classified ads. As I mention in my book, we’re now at the beginning of a 10-year-long transition from pushing information to pulling it, and that will put customers in control. Like Mrs Fields Cookies (remember when they had an outlet in every neighborhood?), many more business models will simply be replaced by better use of information. Companies like NetFlix can see it coming. Others can’t, and to them the coming transition will feel like a tidal wave that swept over the landscape. It will feel disruptive, because they didn’t see it ahead of time. But it’s really a natural transition, because we’re on a one-way trip to the future and the innovation is only going to speed up. And one thing that can definitely go is the Internal Revenue Service.
I hate to be another person to jump on the bandwagon and criticize President Obama for not getting <insert personal agenda item #1> done in the first twelve months, but I have to make clear that Obama doesn’t understand certain things. At least he doesn’t publicly admit to understanding them. And it’s probably just for lack of time. He doesn’t seem to understand that the drug war in this country has been a disaster and needs to be eliminated rather than overhauled (the subject of another blog another time). He probably doesn’t understand national security. And he doesn’t understand the Fair Tax.
Like many people, Obama has spent almost no time learning about the Fair Tax. Democrats in general have an immediate reaction, thinking it’s a flat tax and therefore regressive, or that it’s a Libertarian scheme to blow up government, or it’s a VAT and that we don’t need another tax in addition to all the taxes we already have. None of these is correct.
From FairTax.com:
The FairTax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities. The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
The FairTax:
- Enables workers to keep their entire paychecks
- Enables retirees to keep their entire pensions
- Refunds in advance the tax on purchases of basic necessities
- Allows American products to compete fairly
- Brings transparency and accountability to tax policy
- Ensures Social Security and Medicare funding
- Closes all loopholes and brings fairness to taxation
- Abolishes the IRS
In the 108th congress, the Fair Tax had 59 cosponsors in the house and 5 in the senate. The number of cosponsors grows every year as the word gets out. The Fair Tax is a great example of how government can pull money out of citizens, rather than trying to push it by getting people to declare their income and expenses. We spend over $400 billion filing and trying to figure out how to reduce taxes. People want to keep what they earn. People want to save but have no incentive to. Our current tax code, which weighs in at over 2 million pages, creates artificial markets everywhere, from stocks to housing to exports to finance and health care. The Fair Tax is an important natural stimulus to our economy, because over $13 trillion will come home that is currently sitting in offshore accounts, and the US will be a magnet for jobs. It sounds disruptive, but really it’s just doing things right, and letting the smart people we call accountants contribute to improving our economic output, rather than figuring out ways to reduce payment to the government. The Fair Tax would save about $1 trillion in our economy that today is wasted, collect as much money as today’s income tax, and make America competitive in the world markets. After it passes and gets implemented here in the US (I’m hoping within the next ten years), that other countries will also see how much sense it makes and convert to a national sales (rather than VAT) tax as well. Then we’ll all be more productive and won’t have to worry so much about withholding and paying taxes.
As people learn more about the Fair Tax, they get behind it. A quick visit to Whitehouse2.org shows that the switch to the Fair Tax is the number one issue people want to see enacted, over all others. How long has it been number one? I don’t know about the early days, but it’s been sitting at #1 since I first saw the site and joined about two years ago.
Finally, I can understand how people don’t understand the Fair Tax. The guy running the campaign is Ken Hoagland, a consultant who unfortunately has no clue how to run a grass-roots campaign online or explain things to people without putting them down and trying to show how smart he is. I think the Fair Tax will have a better shot at becoming law when Ken leaves and they get a better marketing person to run the campaign. I contribute money and I offer to help, but they are too busy writing white papers and holding rallies to reach out to people in a way that works online. Still, I give them money because they are fighting for the right cause; they want our laws to go naturally in the direction of least resistance, following the principles of pull. I hope you’ll give them money and encourage them to find a new director who can get the job done.
Please visit FairTax.org, the official FairTax site, which isn’t very good and doesn’t have much activity, but you can at least learn the basics there. Read the FairTax book, which is written in very preachy tones and is very poorly edited BUT IS STILL IMPORTANT. Then go to FairTaxNation.com, where the discussions are at least somewhat active and there’s more energy.
Next: The Computerless Computer Company
