Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

“Be wary of strong drink. It can make you shoot at tax collectors - and miss.”     Robert A. Heinlein,    Time Enough For Love

May 22, 2007

If Taxation Was More Transparent

by Stephen Littau

This YouTube video humorously illustrates some of the hidden ways we are taxed. The ad was created by David Zucker (one of the brilliant minds behind the Naked Gun movies) for the 2006 campaign to warn viewers of the Democrats plans to raise taxes higher than any point in American history. Unfortunately, it seems that Zucker’s predictions will come true, particularly if the Democrats can hold both houses and gain the presidency in 2008 (but the Dems won’t call it “raising taxes” but “rolling back the Bush tax cuts”).

I am not sure where Zucker stands on the Fair Tax but his video raises some issues that might be alleviated if the Fair Tax became law. Sure, the Fair Tax would not require the taxpayer to put coins in a meter or anything like that but we would have a much clearer idea of the taxes we pay than we do now. As it stands now, we pay all kinds of hidden taxes. When taxes are raised on businesses, the businesses raise prices to maintain their profit margins. These increased prices are ultimately paid by the consumer. Also think about what you are really paying in Social Security payroll taxes. The number on your pay stub is only half of what you are actually paying. On paper, your employer pays the other half but in reality, this is money your employer could be paying YOU instead of the mythical Social Security fund.

When you consider these hidden taxes, you are paying your normal withholding from your paycheck (which most people barley notice), your Social Security, your employer’s Social Security, and Medicare while on the other end; you are paying a hidden sales tax. If the Fair Tax does nothing else, it at least gives us the honest amount of taxes we are paying. We can quibble about the 23% and wish it was more on the order of 10%, but we at least know how much the government is taking.

Of course our representatives do not want us to know what we are actually paying. In this way, they are much cleverer than the British who taxed the colonies to pay for the French and Indian War. As we learned in history class, the items the colonists bought required a stamp which informed them of the amount they were expected to pay the Crown. This begs the question: how would history have changed had the British disguised the taxes the way our government does with our current tax code? Would there have even been an American Revolution if the taxes the colonists were paying were not so transparent?

Related posts:
Dare to be Fair

Tarran, has a different opinion on the Fair Tax here, and here.

To learn more about the Fair Tax and how you can help, visit www.fairtax.org

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8 Comments

  1. [...] If Taxation Was More TransparentThe ad was created by David Zucker (one of the brilliant minds behind the Naked Gun movies) for the 2006 campaign to warn viewers of the Democrats plans to raise taxes higher than any point in American history. … [...]

    Pingback by Official Tax Attorney Site » Blog Archive » Denver Tax Attorney - Are Cell Phones a Sin? Florida Thinks So — May 22, 2007 @ 2:32 pm
  2. Although this video followed Zucker’s and is British, I think it is funnier and a little more direct. It is a similar idea, focusing more on what taxes are paid during one day rather than over a lifetime.

    Comment by trumpetbob15 — May 22, 2007 @ 6:00 pm
  3. Oops, guess the preview was lying to me when I tested my link. Let’s try this. Hopefully the link works this time as the preview said it would.

    Comment by trumpetbob15 — May 22, 2007 @ 6:03 pm
  4. Trumpetbob, I love it! Both videos are on the same wavelength.

    Comment by Stephen Littau — May 22, 2007 @ 6:07 pm
  5. The FairTax is so highly visible and transparent that efforts by the Congress to raise the rate would, for the first time, be met with a national debate because once people see the bite–they do care about the size of the teeth marks (with all due respect to tarran)–they are likely to bite back. This video, in fact, explores the idea of making more apparent that which is now largely hidden from us in our daily lives–the constant, hidden dunning of the public by a Congress that sees the populace as little more than sheep to be sheared and the means to be powerful and re-elected.

    I strongly believe that the FairTax would be far less vulnerable to manipulation because it is so transparent without “embedded” taxes present in the planned system and without 67,500 pages of tax code regulations that are now so easily “tweaked” to produce additional revenues out of public sight (consider the effects of the non-indexed Alternative Minimum Tax). Any attempt to raise the transparent FairTax rate would certainly be met with a national debate involving almost every consumer/taxpayer. Although the Congress could, of course, try to change the definition of “new” and “used” for purposes of taxation as worried about on these pages, in its current design only new goods are taxed so we don’t continue the practice of double (and triple) taxation. In floor debate and enactment, however, those who are worried are right, Congress will try to trick the public into a greater role for Congress and a less fair FairTax.

    A great legislative danger, for example, is that even when enough citizens demand passage of the FairTax in sufficient numbers to scare Congress into action, a powerful group of Reps or Senators will sing the FairTax praises as currently written (except for just this one little harmless thing). That “little” something will be the seemingly worthy exemption (like milk or aspirin) from the FairTax. Once this merit robbing door is opened, then Congress–and tax lobbyists–are right back in the driver’s seat and the number of exemptions will total in the thousands within a few years leading to (or initially requiring) a higher FairTax rate. President Bush’s Panel on Tax Reform adopted this very model last year by creating–and judging unworthy–their own exemption riddled retail consumption tax (the two former Senators leading this keystone cops exercise were already working full time in wealthy tax lobby firms).

    This sleight-of-hand, and others, have been, however, anticipated by the FairTax campaign and are one of the reasons the campaign now insists on e-mail addresses when joining the FairTax.org army. The thought being–besides the savings in regular communication costs– that FairTax supporters,once alerted, will have a matter of hours to shut this, and other, trickery down with a defeaning national roar of condemnation.

    The FairTax is really much more than a tax reform proposal but is a test, more than two centuries later and cyncism notwithstanding, of whether public policy that simply favors the public can be forced upon an ever more self-interested Congress. The merits of the proposal are compelling and clear-cut but the politics of wresting manipulation of the tax code away from both parties in Congress are daunting.

    In this, the FairTax campaign only truly attracts those who believe the Founding Father’s promise of self-government and that the promise is still be possible. Let’s just hope there are enough of us left who believe in the concept of our Republic actually working or we are sunk–not just on tax policy but across the board on public policy issues. The FairTax is a worthy fight both for a far better national tax policy and, perhaps more importantly, as a long overdue reminder to our national leaders that this nation was founded on the bedrock promise of self-government and consent of the governed.

    Comment by Hoagie — May 23, 2007 @ 5:20 pm
  6. The FairTax is so highly visible and transparent that efforts by the Congress to raise the rate would, for the first time, be met with a national debate because once people see the bite–they do care about the size of the teeth marks (with all due respect to tarran)–they are likely to bite back. This video, in fact, explores the idea of making more apparent that which is now largely hidden from us in our daily lives–the constant, hidden dunning of the public by a Congress that sees the populace as little more than sheep to be sheared and the means to be powerful and re-elected.

    I strongly believe that the FairTax would be far less vulnerable to manipulation because it is so transparent without “embedded” taxes present in the planned system and without 67,500 pages of tax code regulations that are now so easily “tweaked” to produce additional revenues out of public sight (consider the effects of the non-indexed Alternative Minimum Tax). Any attempt to raise the transparent FairTax rate would certainly be met with a national debate involving almost every consumer/taxpayer. Although the Congress could, of course, try to change the definition of “new” and “used” for purposes of taxation as worried about on these pages, in its current design only new goods are taxed so we don’t continue the practice of double (and triple) taxation. In floor debate and enactment, however, those who are worried are right, Congress will try to trick the public into a greater role for Congress and a less fair FairTax.

    A great legislative danger, for example, is that even when enough citizens demand passage of the FairTax in sufficient numbers to scare Congress into action, a powerful group of Reps or Senators will sing the FairTax praises as currently written (except for just this one little harmless thing). That “little” something will be the seemingly worthy exemption (like milk or aspirin) from the FairTax. Once this merit robbing door is opened, then Congress–and tax lobbyists–are right back in the driver’s seat and the number of exemptions will total in the thousands within a few years leading to (or initially requiring) a higher FairTax rate. President Bush’s Panel on Tax Reform adopted this very model last year by creating–and judging unworthy–their own exemption riddled retail consumption tax (the two former Senators leading this keystone cops exercise were already working full time in wealthy tax lobby firms).

    This sleight-of-hand, and others, have been, however, anticipated by the FairTax campaign and are one of the reasons the campaign now insists on e-mail addresses when joining the FairTax.org army. The thought being–besides the savings in regular communication costs– that FairTax supporters,once alerted, will have a matter of hours to shut this, and other, trickery down with a defeaning national roar of condemnation.

    The FairTax is really much more than a tax reform proposal but is a test, more than two centuries later and cyncism notwithstanding, of whether public policy that simply favors the public can be forced upon an ever more self-interested Congress. The merits of the proposal are compelling and clear-cut but the politics of wresting manipulation of the tax code away from both parties in Congress are daunting.

    In this, the FairTax campaign only truly attracts those who believe the Founding Father’s promise of self-government and that the promise is still possible. Let’s just hope there are enough of us left who believe in the concept of our Republic actually working or we are sunk–not just on tax policy but across the board on public policy issues. The FairTax is a worthy fight both for a far better national tax policy and, perhaps more importantly, as a long overdue reminder to our national leaders that this nation was founded on the bedrock promise of self-government and consent of the governed.

    Comment by Hoagie — May 23, 2007 @ 5:22 pm
  7. Hello, wonderful and informative web site.
    I’ll be back.

    Comment by ehvcvz — May 23, 2007 @ 6:47 pm
  8. I couldn’t have said it better Hoagie.

    Comment by Stephen Littau — May 24, 2007 @ 12:08 am

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