Sunday, July 22, 2007

Implications to Churches, Charities & Overall Morality

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For some reason many Americans seem unable to grasp the enormous economic benefits to be derived from shifting ALL Federal funding from an Income Tax system to a consumption tax like The FairTax. There is absolutely no case for keeping the current (or any) Income Tax system, but most Americans refuse to even discuss the possibility that their government has misled them on taxation for so long (approximately 90 years now).

So, this paper will attempt to point out non-economic reasons for replacing all Federal funding with The FairTax.

  • Increase in disposable income for every American (due to NO Federal withholding) means increased charitable giving.
    1. Every study shows that charitable giving in this country is directly related to the amount of wealth of it’s citizens. The FairTax increases the wealth of EVERY American except criminals. And criminals are not big donors to charity in the first place.
    2. Income-Tax proponents will have you believe that giving is directly related to income tax rates, because of tax deductions. That is an utter falsehood. Relatively few Americans even file itemized deductions and besides, most charitable giving is obviously done because of a sense of helpfulness and not as some kind of financial calculation.
  • Removal of the ‘tax-exempt’ and ‘tax-deductable’ statuses means decreased control by Government.
    1. Currently the Government grants tax-exempt status to organizations who fall within guidelines the Government establishes. If an organization wants to retain that coveted tax-exempt status then they need to toe the Government line.
    2. Similar situation with money given to a tax-exempt organization. The giver is ‘rewarded’ by being able to deduct a portion of that money from his year-end Federal tax bill.
    3. Tax-Exemption is thus a tool the Government uses to encourage organizations to operate as the Government deems acceptable. Is that really freedom? I know the U.S. Constitution never gave that power to the any branch of Government. I doubt the Bible says a government should have such control? Same for the Torah and the Koran.
  • Removal of ALL Federal withholding means all non-government education is un-taxed.
    1. Currently, most Americans are forced to share the cost of public schools through local taxation. The Federal Government has for decades now more or less mandated how public schools operate. They do this mainly through Federal funding monies (‘comply or we hold back money’) and a Department of Education (‘comply or else’) that was also clearly never mentioned in the U.S. Constitution. Thus, many of us interchange public schools with the term government schools.
    2. To send our children to non-government schools costs money in the form of tuition (usually quite expensive). The Government does not even allow such tuition to be tax-deductible, meaning that not only do parents have to pay that tuition PLUS public school funding but they also have to pay that tuition out of money they have to pay full Federal Income Taxes on.
    3. Under The FairTax, ALL Federal revenues come from the sale of retail goods and services. ALL investment expenses (including investment in our children) are not taxed at all. Thus, parents still have to pay private tuition in addition to funding public school BUT the private tuition is NEVER taxed by the Federal Government.
  • Removal of the ‘reported-income’ loophole means criminal activity is NO LONGER granted tax-exempt status by our Government.
    1. Under ours (or ANY) Income Tax, all that can be taxed is reported income. Drug-dealers, pornographers, etc NEVER report their income and thus NEVER pay any Federal taxes on it. Of course there are laws saying Americans must report their income but if you don’t get a paycheck or run a business how in the heck is that law supposed to be enforced?
    2. Every American taxpayer has their tax bill inflated by approximately 30% (this is the IRS estimate) because they must make up for the taxes that these criminals do not pay.
    3. This means we financially SUBSIDIZE the very immoral activity that most of us do not want to even exist. This is INSANITY! But that is also an Income Tax.
  • No Federal taxation at all for ANY legal American to buy bare necessities for their family means the end to the ‘serfdom tax’.
    1. Under current Income Tax system, working Americans who live at the poverty level pay various taxes out of their meager salaries. This situation is analogous to the serfdom taxes of the Middle Ages where dirt-poor serfs were taxed in part to insure they would never climb out of poverty.
    2. Under The FairTax EVERY American is supplied with a monthly stipend to cover the consumption tax on purchases needed to support them up to the Federal poverty level. Thus, all Federal taxes up to poverty level are 100% paid for already.
    3. Thus, The FairTax encourages poor Americans to climb out of poverty rather than takes a portion of their money from them before they even get to see it.
  • The FairTax follows the saying to ‘Render onto Cesar what is Cesar’s’, unlike the Income Tax system.
    1. The Income Tax system effectively follows the saying ‘Render onto Cesar what is Cesar’s AND whatever criminals choose not to render to Cesar’.
    2. I doubt that saying is part of any religious tradition.

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