November 02, 2011

Economic slavery, our income tax, and the fairtax fix

Economic slavery, our income tax, and the fairtax fix

      Economic slavery is the condition where people are forced to work or giving up time or money, not for their wants or needs, but to some one else's.

1. Income tax's corporate welfare tax credits is a system of economic slavery where politicians take money from our wallets and gives it to powerful business men setting up systems of crony capitalism where success is less dependent on how good one can produce a product at prices people are willing to pay and more on the relationship to those in power. Such systems deny real opportunity to the masses. To be fair at best corporate welfare tax credits are used like band aids to lower the burden of taxes against income in order to keep from loosing certain jobs over seas and at worst they are used to coerce purchasing behavior and line the pockets of powerful business men closest to those in power.

The fairtax fix to the problem of corporate welfare tax credits is to remove all taxes against productivity, and thus we eliminate any need to lower the burden of taxes against productivity because there are none. The fairtax having no bias in the tax code improves American companies competitiveness in both domestic and international markets. America will return to a more free free-market, where success depends more on how good you make your product at prices people are willing to pay

2. Our income tax complexity has created an industry that costs Americans over $350 billion annually and growing every time we have our individual taxes prepared or indirectly when we purchase a product from a business that paid tax accountants and layers. Unnecessary complexity in the tax code. At roughly 310 million people in America, tax preparation cost averages over $1,100 for every man woman and child. The huge burden of preparing taxes is yet another example of economic slavery, with the only benefit being compliance to a tax code that gives power to politicians and lobbyist.

The fairtax fix to the problem of tax code complexity. is to tax consumption instead of production replacing nearly 70,000 pages of our current tax code with a 134 page bill. The fairtax reduces the number of filers by about 85% from the current 150 million, and determining how much to remit is as simple as 23% of your gross retail sales.

3. Our income tax embeds the cost of taxes into each stage of production. In building a manufacturing plant were forced to pay the cost of embedded production taxes upfront. Often were forced to get larger bank loans and pay more in interest. Yes we can deduct the cost of the building but its often done over 30 years and though we can deduct the interest on the loan it still cost us more then if we did not embed the cost of production taxes in the purchase of the building. Same thing applies in the cost of vehicles and office supplies such as computers with various periods to amortize the deductions over. Taxing income forces us to use larger loans and pay banks more in interest then necessary, and as such represent yet another example of economic slavery.

The fairtax fix removes the cost of production taxes from business purchases. Imagine, if demand dictates you to expand, your able to build that new manufacturing facility for 23% less. You wouldn't need to get as large a loan. As to the loan rates, the fairtax removes the embedded cost of corporate income, capital gains, payroll, unemployment taxes all embedded in the loan rate. Switching to the fairtax will lower loan rates.

Abraham Lincoln quote:
"We all declare for liberty; but in using the same word we do not all mean the same thing. With some the word liberty may mean for each man to do as he pleases with himself, and the product of his labor; while with others, the same word many mean for some men to do as they please with other men, and the product of other men's labor. Here are two, not only different, but incompatible things, called by the same name - liberty. And it follows that each of the things is, by the respective parties, called by two different and incompatible names - liberty and tyranny." President Lincoln May have been discussing slavery in his day, but what he said then is applicable to ages before and after him as slavery takes many different forms.

If everyone knew all there is to know, they would not do half the things they do, including myself, therefore I must foregive them, including myself.

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