Ron Paul, Fair Tax, Women Voters, VICTORY!

A few years back I was getting ready to fly to South Africa.  I don't recall exactly what caused me to pick up the FairTax book by Neal Boortz and John Linder, but I did.  I didn't read it on the plane until near the end of the journey; but when I got into it, I couldn't put it down.  I read it when we rode from Cape Town to the Cape of Good Hope.  I read it in my hut between safaris later in the trip when we were at the Kruger game reserve.  The point is that even with dancing monkeys all around, I couldn't put it down. I actually read the book.  Much like Ron Paul, the Fair Tax is easy to dismiss with soundbites if you don't understand it.  If not for Ron Paul, I would be supporting the heck out of Huckabee for one reason and one reason only–the FairTax.  But I want to have my cake and eat it too, so here is my attempt to convince you to let me.

I really feel that Ron Paul and the Fair Tax need not be mutually exclusive and adopting it as part of his platform could not only help him win, but could also serve as a mechanism to cause even more positive change for the years following Dr. Paul's time in office.  Before I explain exactly how, let me start with an explanation of the Fair Tax.  If you are already well versed on this issue, just skip it.  But before you make a comment accusing me of being a “Huckabee shill”, read the article.

The Fair Tax or FairTax

Under this legislation the income tax would be replaced with a national sales tax.  Not only would individual income tax be replaced, but all capital gains, death taxes, and corporate taxes would be as well.  The reason for this is that there is no such thing as a “corporate tax.”  It sounds good to tax a corporation, but in the end all taxes paid to the Federal Government by corporations equates to money not paid to the corporations' employees or owners (shareholders).  This isn't some crackpot idea, the idea for the FairTax was created by some of America's most brilliant economic thinkers.

Here are some of the things most don't understand or consider when talk of the Fair Tax comes up:

The 23 (or 30 percent depending on how you do the math) tax is not in addition to the prices we are already paying.  There is already a 20-30% invisible tax embedded in the cost of goods and services we use due to our current system. By ripping out the current system and including the national sales tax, prices would remain at essentially the same level they are now.

It doesn't hurt poor people.  Every American would receive a check (or deposit) called a “prebate” at the beginning of the month for the taxes she would pay in order to meet the basic necessities of life (the first of our creator endowed rights listed as being self-evident in the Declaration of Independence). Wealthy people do pay more in this system because they buy more.  But they don't pay more simply because they are “rich.”  If poor people choose to buy more, they would pay more on a percentage basis of their income than rich people do, but the right to consume is not a god given right and I see no reason why this would be unfair. The concept that someone should pay more because they earn more is very un-American.  This system also would tax people who have inherited money and buy things with it who now don't pay much in income taxes because they don't have an income.

Another reason average Americans aren't hurt under this system is that a tax is only paid once when the item is new (at least at the federal level).  The wealthy person would pay this tax on his new BMW, but Joe Mechanic wouldn't pay it on his used Accord.

Yet another reason middle income people would benefit is that they wouldn't have to pay an accountant to do their taxes each year. They also would never have to worry about an expensive audit or proving they spent what they spent in order to receive deductions or credits.

Everyone would benefit due to charitable giving.  It is a mistake that people only give because they receive a tax deduction for doing so.  Studies have shown that charitable giving increased dramatically when Reagan dropped the tax rates.  If people have more money, they give more away.  It's that simple.  This giving would help more average and poor Americans in need.

People would get to take home 100% of their paychecks–not what's left after the government gets its part.  They could use this money to buy stuff at essentially the same prices they are paying now.

By eliminating all federal corporate taxes we would get most, if not all of our jobs back from overseas and some new ones as well.  This would create an historic economic boom.  Every company in the world would have to move to the United States in order to compete due to our tax system. The ending of capital gains taxes would encourage investing creating yet more impetus for strong economic growth and even more better paying jobs where people got 100% of their pay and spent it creating more prosperity and more income for the government.

Since all of our illegal immigrants don't pay income tax but do buy things, they would then pay into the system they are currently robbing.  Same with drug dealers, bookies, prostitutes, etc. Ever see a movie with a drug dealer riding in a Pinto?

The cost of collecting such a tax would be miniscule in comparison to the cost of running the IRS.  You can look up the numbers www.fairtax.org, but the cost of supporting the infrastructure of the IRS is ridiculous.  All it would cost for this new system is changing a number in a cash register as well as a little paperwork for each state or establishment to send into Washington.  This cost is taken into consideration in the plan and the states would be reimbursed for this small cost.

People could still cheat on their taxes, but it would now require two people (the merchant and buyer) to do it instead of just one. Now the government cheats people out of money by having a code that is so complex nobody understands it so they don't take all of the deductions they could.

It would put a lot of people out of work (IRS agents, lobbyists tax attorneys, accountants, tax compliance officers, etc.) but the resulting economic boom would quickly find a way to use these bright people's minds and efforts in a way that would actually be productive to our country instead of making them cops and crooks in order to enforce our current system.

The increased money the government would receive should be enough to actually save all of the programs we have like Social Security, etc.

 So what's the hold up?  Well, under the current system the people who make the laws, the lobbyists and powerful corporations–not the Congress elected by the people, get special favors and tax exemptions.  While paying taxes may cost these groups more than paying no taxes would, in business it's about having an advantage over your competition.  And while company X may have to pay 20% under this system instead of 0% under the Fair Tax, paying 20% is still good if your lobbyists got you that rate while your main competitor has to pay 30%.  Another reason is that right now the government owns all of your individual income and allows you to keep a certain amount.  If you don't believe me, just don't pay your taxes for a while and see how quickly they can take everything for you in order to satisfy your tax debt.  Why would they want to give this up? 

This is Where Ron Paul Comes in

David Cox wrote an article recently on lewrockwell.com recently about the problems with the FairTax.  The overall theme of this article is that we could end up with both the national sales tax AND the income tax.  And I agree with him. It is possible which is why Huckabee supporting the Fair Tax is kinda scary.  The 16th Amendment would have to be repealed in order to ensure we didn't have both.  Who is the one man that you know would make sure we got rid of the IRS?  Ron Paul.

Now to how adopting the Fair Tax could help Ron Paul win, why it fits him philosophically, and why it would be good for our country long term.

First of all, he could adopt this positiong quickly without selling out his principles.  It would be a way to eliminate the IRS.  He has said he would replace it with nothing, but he has also said that he doesn't believe with the state we are in he would actually be able to end the IRS in just a 4 year period.  He could explain that he would adopt the Fairtax to eliminate the IRS and thus end a massive government bureaucracy and by implementing his reduced spending plan, eventually we would be able to end the FairTax (which would be far easier) altogether.

Politically this would be a major coup. Outside of the Religious Neo-Conservatives, Huckabee draws most of his support from proponents of the Fair Tax.  These supporters are quite well organized and do things the Ron Paul camp does to support their cause like going to post offices on April 15th to hand out literature, having a national distribution list of supporters, and a list of all representatives and where they stand on the issue of the FairTax.  Other than the FairTax, these people have far more in common with Dr. Paul than they do Mike Huckabee as evidenced by one of the prevailing themes of the Fair Tax–do away with the guilty until proven innocent,  government owns you and all of your property mindset that comes from the IRS.  Getting all of these people on Ron Paul's side wouldn't be hard  and would provide a major boost for him.  Not unlike Ron Paul supporters who are willing to stomach some of the issues on which they don't agree with him for the overall good of his other policies, the FairTax proponents believe so strongly in the FairTax they are willing to support Huckabee even if it means looking the other way on some of his other issues.

Ron Paul himself has suggested in interviews that a National Sales Tax may be a way to make up for the government revenues lost by eliminating the IRS.  While those of us who understand Ron Paul's candidacy believe that the IRS could be replaced with nothing if the government did what it was actually legally allowed to do under the Constitution, most American voters do not understand this or believe it.  Statements like these (and the work of the MSM) serve to marginalize Ron Paul's message and undermine his legitimacy as a candidate among the average American. They may not like the IRS, but they believe it has to be replaced by something. 

I think this is part of the reason Ron Paul doesn't do as well among women as he does with men.  Let me explain by giving a personal example.  I was engaged to a girl I dated for over four years back in 2004.  I'll spare the details, but we ended up not getting married.  I read a lot during the period after my engagement ended about the psychological make up of women; granted, as Ron Paul himself would say, we are all individuals.  As individuals we all have rights, but people do tend to think certain ways as a group–like the religious right. So while the example I am about to give absolutely doesn't hold true for everyone it is still an interesting and applicable insight. 

There is one thing I read during that time that really stands out to me and is relevant here.  A man will end a long relationship with a woman even if he currently has no other dating prospects.  Women are quite unlikely to end a long relationship unless they have somebody else already in place.  The idea of ending the IRS and replacing it with nothing is appealing to men, but not to women and people who think like them.  Since our government has now become a “nanny” and most people seem not to care, it isn't that much of a stretch to conclude that most people think more like the stereotypical security minded woman than a freedom-loving stereotypical man.  More women voters means more likelihood of winning the nomination and election.  Having a replacement plan instead of trying to convince people of something that seems nearly impossible like ending the IRS (death and taxes, after all) is a far easier sale to make.

The biggest danger I see in the Fair Tax is that it WOULD increase government revenues dramatically.  Many of you probably have a relative or friend who makes a lot of money but never seems to have any.  Maybe that person is you.  While Ron Paul emphasizes and runs his office the Dave Ramsey way, most people and politicians don't.  There is a reason most people who win the lottery end up broke again  later down the road.  There is a reason people can't pay their mortgages or qualify for refinancing. The reason is their personal spending habits.  And Washington D.C. has a bank statement full of NSF fees long enough to make Britney Spears look like a school marm. No matter how much they make, they will find a way to blow it.  Unless the person writing the checks is someone we can trust.  Who could that be?  Maybe someone who returns part of his congressional office budget to the treasury each year? Maybe someone who doesn't participate in the congressional pension program that taxpayers pay for?  Maybe someone who didn’t vote for Rosa Parks, a personal hero of his, to receive a Congressional Medal that would have “only cost” the taxpayers a few ten thousands of dollars? Seems like a good choice to me.

If Ron Paul would adopt the Fair Tax, he would certainly seem more electable.  If he were elected and the Fair Tax was passed, he could be trusted to spend the money wisely and constitutionally.  We actually could get out of debt.  We could save the programs that generations of Americans have become dependent upon.  Once people received their entire paychecks and could see what they had been missing, they would be a lot more likely to accept the entire pro-freedom message since individual financial freedom is the one freedom that hits home first and most.  These new voters could be counted on to put the right kind of people in office for years to come, and following the example set by legendary President Ron Paul, our national sales tax could go from 23% to something in the future like 2 or 3% once the debt was paid, productivity, opportunity, and income had increased exponentially, and government had been returned to its proper constitutional levels.  If the FairTax passes and a normal candidate has the checkbook, it could one day be 50% and that still wouldn't be enough.  I think the FairTax and Ron Paul could be a winning ticket.

Your fellow American,

John Armstrong

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