I recently spoke to a tax law class at Ole Miss. As a member of Congress, I was the original sponsor of the FairTax in 1999, and they were interested in discussing it.
At one point, the professor, a tax lawyer, questioned eliminating the death tax. He correctly pointed out that it affects less than 0.2 percent of all Americans.
He added that in his experience in handling estate matters for very wealthy people they were grateful for the good fortune this nation afforded them and happy to pay the tax.
What he did not say is why these wealthy people, who were anxious to pay the tax, had hired him to advise on their estates. If they were anxious to pay the death tax, the government is prepared to handle that for them for free.
During a congressional debate over the death tax, Bill Gates' father, a wealthy man himself, expressed similar support for the death tax.
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Warren Buffet, the nation’s second-most wealthy individual behind Bill Gates, expressed a similar sentiment when he noted the unfairness of his secretary having a tax rate nearly twice his tax rate.
My response to all of them is this: If you feel guilty about your wealth, you can write a check to the federal government. That should settle it.
But leave the rest of us alone. Do not try to assuage your guilt by using the power of the government to force the rest of us to be as virtuous as you wish to be.
I am unimpressed by anyone who thinks his tax burden should be increased. I care only about the impact an increased tax burden has on our economy.
It may not hurt them to chip in a few million extra dollars in taxes, but it would do the economy more good for those extra millions to be employed in the private sector, investing in companies and creating jobs rather than being frittered away by a bumbling bureaucracy.
The same tax code that rich people would use to improve our behavior has impacts in our daily lives that they don’t experience.
When we buy a home, the price and interest rate are important, but our main consideration is usually the size of the monthly payment.
The realtor will calculate the value of the mortgage interest deduction in terms of making the payment easier to manage.
Then, having made the decision based partly on tax consequences, 70 percent of us use the standard deduction and don’t deduct the mortgage interest. It appears to be valuable as a sales tool but less important in the real world.
Business owners go to work every day thinking about their customers and their employees. Then they get to the office and are confronted by their partner from the government – the taxman – who makes no contribution to the business, but writes all the rules. Currently there are 75,000 pages of them. The taxman will also demand a third of any profits.
So we make business decisions based on tax consequences, creating economic distortions and inefficiencies in our business.
A few years ago, we learned that the IRS is not content with just telling you how to run your business and siphoning off a third of the profits. They capture the private information they gain from your voluntary cooperation and use it against you for their political goals.
If you contributed to Mitt Romney’s campaign, you might be audited. If you are seeking tax exempt status for a civic organization aimed at monitoring elections, you might have government agents scrubbing through your business looking for opportunities to fine you.
If you are seeking tax-exempt status for civic activity dealing with conservative policies, your application could be sent to the FBI for a criminal investigation.
All of that has happened. Sharing your tax information with other government agencies or using it to punish you is a felony.
It has been nearly 900 days since this criminal activity by the IRS has been disclosed, and nothing has been done about it.
In this presidential election season, many candidates have made tax reform proposals. Only one does more than nibble around the edges of the current tax code. Only one deals directly with the IRS.
Former Arkansas Gov. Mike Huckabee supports the FairTax, which would set you free. It would repeal all taxes on income of any kind. It would abolish the IRS.
Income taxes would be replaced by a retail sales tax on new goods and services paid at the checkout counter. You would be in charge of when and how much you are willing to pay in taxes.
No one would know what you bought or what you paid for it. You would receive the greatest gift that a free society has in its power to give its citizens: Anonymity!
No agency of government should know as much about us as the IRS currently does.
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