Contrary to the crypto-terrorist rhetoric of creative destruction, there’s more to our lives than survival. According to our Constitution, security includes the blessings of liberty. This doesn’t mean that we survive and then we enjoy freedom. It means that we survive in freedom, making right use of freedom, with freedom as the path and means to achieving favorable results. Given the dire warnings of impending economic doom being used to herd us toward the communist slaughter pens, this means remembering that freedom isn’t our reward for being co-operative sheeple. It’s a vehicle that conveys the strength we need to keep ourselves from being shorn, dressed and stewed like sheep.
Like any other conveyance, freedom can’t run on empty. The first order of business is to keep it fueled. This takes us back to where we started: the Lindsey Bill to abolish the Federal income tax. At a stroke, abolition assures that freedom runs with a full tank of gas. For people who think the U.S. government has money of its own, this is hard to understand, so we’ll take it a step a time. The U.S. government’s money comes mainly from taxation. Before it’s taxed away, all the money is in the hands of the people, either as individuals or in their private associations (business enterprises, for example.) The Lindsey Bill simply abolishes the system that gives the U.S. government the prerogative to reach into people’s pockets and claim as much money as it pleases before they have a chance to decide anything about it.
The Federal government serves some legitimate purposes. No one denies that it needs resources sufficient for those purposes. But instead of amassing them through a supposedly legalized guild of professional pick pockets (the IRS as presently constituted), the fair tax approach first lets people decide for themselves what to do with their money. They may spend it all now (present consumption) or set some aside to serve future needs and purposes (savings). The present income tax system effectively taxes both activities (since the dollars it preemptively claims could be used for either purpose.) The fair tax approach levies taxes only on what people decide to spend.
Before we let the money grabbers distract us with their usual chatter about tax rates, let’s focus on the key difference between the fair tax and the income tax. Under the income tax the government decides when and how much of your money it may claim. Under the fair tax, you make that decision. As all politicians and bureaucrats know, decision making is power, especially when it directly controls the activity that results. One person has a dollar. Another person wants to use it. If the person who has it can simply decide to keep it, that person controls the dollar’s power. If the other person can at will reach out and use it for some other purpose, that other person controls the dollar’s power. The fair tax returns control to the people who have first possession of the dollar. It’s that simple.
But still not simple enough for the folks who get power from the present arrangement. Okay, let’s try again. I walk into the barber shop with twenty dollars in my pocket. The barber takes twelve dollars and a three dollar tip out of my pocket the moment I cross the threshold. That’s not just before I get the hair cut, it’s before I finally decide that I want to get it then and there. I’m in the shop, so I pay. That’s the income tax. Or alternatively, I walk into the store, look at the cuts they offer, take stock of how the customers look, maybe chat with a couple of them. Then I decide whether to spend some of my money on the haircut. No money changes hands until I pay for what I’ve decided to get. That’s the fair tax.
Of course, we all live as it were on premises serviced by the Federal government in some way. Therefore, whatever we decide to buy, the U.S. government may claim a bit in payment for its services. Under the income tax that claim is preemptive. Under the fair tax, it becomes effective only when we decide to consume some of the goods (understood here to include good service) the U.S. government’s services help us to preserve. By necessity, the government can be assured some revenue (we have to purchase food, for example.) In a society as diversely productive as ours, however, we have the luxury of lightening the load borne by necessity (to ease the path out of poverty, for example), spreading it to products and services that pleasure, adorn and entertain our lives.
In any case, we fill the government’s resource requirements using a method of taxation that relies on the choices people make for themselves, rather than the choices political bosses and bureaucratic commissars make for them. This approach gives people the greatest possible opportunity to use the money they make to build a little something for themselves and their loved ones. Good decisions, both about their productive lives (what they do, how hard they work, how well they develop and target their talents and abilities) and about their savings and consumption, will allow them to survive, to live well, and/or to amass wealth, depending on priorities they determine (not bureaucrats and politicians.)
Well, almost. As we were reminded last fall, there remains the critical question of what happens to the money people decide to save. Government isn’t the only threat to the control people have over what happens to their money. A banking/credit system divorced from their needs and circumstances can effectively erode and even destroy its potential, profiting others while they stand by helplessly. This thought brings us to the next step on the path of real change for the better: replacing our ill conceived and failing financial institutions. Watch this space.