5 Reasons the American Tax Payer Should Support the Fair Tax! Pt 2 – Cost of Compliance #oktcot #tcot #fb

Have you paid your income tax this month ?
Image by Walt Jabsco via Flickr

We just passed Tax Day, everyone’s favorite time of year.  Do you remember the last time you filled out the 1040 yourself?  It’s such a nerve racking experience sorting through Schedule C and trying to find Line 52 that many Americans have their taxes professionally done to avoid the hassle or making a mistake which could cause the IRS to breath down their necks.  I forked over $50 per return last year to avoid the horror.  That’s $100 that I didn’t invest or use to buy 20 DVDs from Wal-Mart’s $5 bin.

In 2005, it is estimated that 6 billion hours and $265,000,000,000 were spent complying with the income tax.[1] Those are hours not well wasted.  That is money that was not invested voluntarily by individuals in worthwhile programs like cancer research or used by families for much needed vacations.  Almost 56 percent of this cost is paid by business, 2.5 percent is paid by non-profit organizations, and the remaining 42 percent is paid by the American tax payer.[2] In reality, the cost of compliance paid by the individual is much higher because businesses factor the cost of complying with the tax code into prices rather than taking a hit to their profits.

As mentioned in the section on withholding, the income tax is debited directly from the worker’s paycheck.  Many Americans are debited 25 percent for income tax and 8 percent for payroll taxes for a total of 33 percent before they even receive their check.[3] That’s 33 cents on the dollar that they cannot invest and earn interest off of.

Without the income tax system, we will see the money that is normally spent on compliance being pumped into independent research and development, job creation, personal savings, and pursuing the American Dream.


[1] Boortz, p. 43, fn 2

[2] Boortz, p. 44

[3] Boortz, p. 42, fn. 1

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Defeating the Second American Crisis

en: Thomas Paine (1737 – 1809), oil painting b...
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A Plan of Action for the Prosperity of America

During an American Revolutionary War, Thomas Paine inspired his fellow countrymen to not quit when things were tough and to fight for freedom.  During this economic crisis of the Twenty-First Century, this author hopes to inspire the reader to support a restoration of Constitutional principles and the implementation of a tax system which encourages growth and is compatible with the concepts of fundamental fairness and equality.

One of the most famous pamphlets produced during the era of our nation’s founding was entitled Common Sense.  That great work explained in simple fashion the importance of American Independence.  Thomas Payne wrote another series of articles throughout the course of the American Revolutionary War entitled The American Crisis.  In these articles, Payne encouraged his fellow countrymen to not give up in light of the crisis they were facing.  The first paragraph of the first article put it best:

THESE are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives everything its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as FREEDOM should not be highly rated.

America is once again at a crisis point.  Though the first crisis was resolved and secured us our sovereignty, this second crisis threatens to destroy the economic freedoms of America.  Congress recently raised the national debt ceiling to a shocking $14.3 trillion with no signs of slowed federal spending.  Representatives pass spending bills bloated with pork and special favors to benefit the few at the expense of the many.  The dollar is swiftly losing value.  The 9.7 percent unemployment is the lowest in five months but this figure does not include those who gave up searching for a job or who are no longer allowed to claim unemployment benefits.

During this Second American Crisis, this author hopes to inspire support for a restoration of Constitutional principles in our government and the implementation of a system which encourages growth that is compatible with the concepts of fundamental fairness and equality.

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