Friday, April 14, 2006

The only political cause to which I've ever pledged my hard earned money (unless of cause you consider charities, religious or secular, political) is I've still to complete my taxes this year. I don't know what it is, but I just can't arouse a desire to complete them. The weird thing is that I pay someone else to do them so my only commitment is probably 2-4 hours of collecting paperwork and filling out a worksheet my CPA has. Also weird is that after getting bitten BAD by a huge bill several years ago I've generally owed little or been owed A LOT. So my delaying is really only doing me harm.

I think the thing that's most discouraging is the reality that taxes are not really understandable by an ordinary human being. Extraordinary humans like CPAs can't really understand the whole thing. So every April I saddle up and do the work and get paid or owe and pretty much don't have any idea why really. It's like a bill from a vendor I don't recognize and for an amount that I can't afford. When I don't owe it's like a sweepstakes letter asking me to just come down to the local Holiday Inn to watch a "short" demonstration of Vacuum cleaners before I can collect my $5000 prize.

Anyhow, as I said, I've support FairTax in the past, and to that end I get regular updates from them via e-mail alerting me of interesting news or asking me to participate in some rally. I get this sort of stuff OFTEN (Schwab, ProFlowers, REI, Lung Association of Washington....) and most of the time it feels like SPAM. E-mails from FairTax though don't. What they say just plain makes sense and the ironic thing is that much of their mission seems to be helping other people to believe that it makes sense. It's kinda like Morpheus giving the Blue or Red pill to Neo. He and his band have done their convincing now it's up to Neo to figure out if he believes it and takes the red pill or not.

The latest example is this e-mail:

Hello FairTax supporters,

Is it the American appetite for all things foreign, from oil to cars to clothing, that pushed the trade deficit to yet another record in 2005? Or is it our broken income tax system?

The U.S. Department of Commerce reported last month that the overall trade gap climbed to an all-time high of $725.8 billion last year, up 17.5 percent from 2004, marking the fourth straight record. Analysts predict that the 2006 trade gap will be even worse. The year's $201.6 billion deficit with China, the largest ever recorded with a single country, brought demands for a crackdown on what the U.S. sees as unfair trade practices. This occurs at a time when Europeans are viciously attacking the U.S. for not phasing out fast enough the puny export incentive provided in the form of the Foreign Sales Corporation (one of the many small loopholes in the tax code).

It's time Congress knew what FairTax supporters know: The real culprit is our income tax system. It penalizes American manufacturers and workers in order to provide what is, in effect, a tax incentive for foreign goods. The U.S. allows foreign-produced goods to enter our market fully tax free, yet we fully tax American-made goods. Foreign producing nations rebate the tax they impose upon export, but the U.S. does not. And when Americans seek to export, the foreign nations with whom we trade have no problem reimposing border taxes at an average rate of 18 cents per dollar. In other words, we tax our own goods and don't tax theirs. No wonder we have a trade deficit. Americans don't have too high an appetite for foreign goods. We have an appetite for less expensive goods.

Next time you hear a member of Congress talk about manufacturing losses or the trade deficit, raise this point. The FairTax puts foreign and American-made goods on an equal footing. (Source: Dan Mastromarco, the Argus Group)

As you fill out your tax returns this week and next, take a moment to e-mail your friends the link to ( and let them know why you support the FairTax!

Maybe I took the red pill and it's side-effects are severe, but that seems quite plausible to me. For the record (and for the impatient), the "Fair Tax" is essentially a consumption tax; you're taxed on what you buy (some items like food excluded). You want to pay less taxes? Buy a cheaper car. Their website has lots of interesting articles and research that talk about specifics and respond to question like "is it good for the economy to incent people to buy less so that they can reduce their taxes?"


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