Atlantis Alumni

Sunday, July 8, 2007

If It's Sunday, It Must Be About Taxes

I've been reading about taxes this morning. I followed a few links on some of my regular sites and I ended up focusing on a couple of tax proposals that are new to me. One is something called the "Fair Tax." This proposal would end all federal income taxes on everybody and everything, including corporations, it would repeal the 16th Amendment, and do away with the IRS. The replacement tax would be a national sales tax of 23 percent with a rebate to taxpayers on their spending up to the poverty level. The rebate is supposed to add progressivity to the plan. I'm always suspicious of plans like these, which tend to be wildly popular with right wingers and extreme libertarians, so I looked around for some critical reviews of the "Fair Tax." I didn't have to look very far. It seems as though it would be tough on the middle class, unfair to baby boomers, and if passed by Congress, it might not eliminate the IRS. Instead, we could possibly end up with both an income tax and a consumption tax. My own critique of the "Fair Tax" is that it ends taxes on corporations and shifts the burden totally to consumers. The plan has more support than the blatantly regressive "flat tax," but it seems unlikely to actually pass, according to what I've read. Personally, I'm for keeping the current setup, albeit with simplifications, and restoring the pre-Reagan progressive tax rates that had the wealthy paying a bigger share of the total taxes collected. But then I'm for levelling, redistribution of wealth, and against the ever rising gap between the rich and the poor in this country.

Photo: another Pines beachfront palace


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