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The original intent behind good government

By Nancy Salvato
web posted August 8, 2005

"For the first time in decades, and perhaps for the first time ever, the opportunity for meaningful tax reform is upon us. President Bush has impaneled the Presidential Advisory Panel on Tax Reform and they are currently taking testimony from financial experts, groups and organizations."

Many folks admittedly don't understand how taxes really work, except for the fact that their pay checks are substantially smaller without the money that was taken out by the government. This might intimidate people from trying to understand all the ways to implement tax reform – myself included. However, it would be advisable for those like me to read about the Fair Tax which is pitifully simple to understand and which makes complete sense.

I was recently struck by the idea that if the Fair Tax were adopted at both the state and federal levels, it would substantially lesson the negative impact brought to bear on the American public from eminent domain abuse, out of control education spending, and the trade deficit. The first issue came to a head this year with the decision by the Supreme Court regarding Kelo v. New London. Equitable funding of education is always in question. Whether all trading partners will be treated with fairness dominates any debate about CAFTA, NAFTA or other trade agreements which involve the US economy.

Let's begin with the Supreme Court ruling on the Kelo case. The court concluded that because the Connecticut property in question would provide greater opportunities for economic development and tax revenue, it qualified for government taking under the guise of the public interest – previously interpreted to mean such things as sewers, public schools, or utility lines. If Connecticut had a Fair Tax, this precedent would no longer be of any concern because all future government revenue would be derived from a tax on purchases above and beyond the bare essentials. It would eliminate any government interest in creating a bigger tax base in their community. It would leave the market to its own devices.

Next, let's tackle the education spending behemoth. Public education would no longer be funded by income or property taxes. Instead, a percentage of every dollar spent would be earmarked for this purpose; ensuring equity of distribution among all public schools. It would be unnecessary to rob Peter and pay Paul. Yet any family could opt out of educating their children at a publicly funded school. To ensure the kind of free market competition that translates into a quality product, all children would be eligible for a tuition voucher to offset the cost of an alternative education.

Finally, let's have a closer look at what the Fair Tax says about trade.

"The Fair Tax allows U.S. exports to sell overseas for prices 22 percent lower, on average, than they do now, with similar profit margins. Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in U.S. manufacturing sectors. At home, imports are subject to the same Fair Tax rate as domestically produced goods. Not only does the Fair Tax put U.S. products sold here on the same tax footing as foreign imports, but the dramatic lowering of compliance costs in comparison to other countries' value-added taxes also gives U.S. products a definitive pricing advantage which foreign tax systems cannot match." (See above link)

Again, the market would be left to its own devices.

How did our current tax laws evolve into an 800 pound guerilla, so impossible to manage? Seemingly innocent legislation was passed to help us take care of ourselves. But we must eliminate government dependency and simplify our code of law. Adopting the Fair Tax would help us to tame the beast and once again manage our own life, liberty, and property.

Nancy Salvato is the President of The Basics Project, a non-profit, non-partisan research and educational project whose mission is to promote the education of the American public on the basic elements of relevant political, legal and social issues important to our country. She is an experienced educator and an independent contractor with Prism Educational Consulting. She serves as Educational Liaison for Illinois Senator Carole Pankau. She works nationally and locally furthering the cause of Education Reform. Her writing is widely published on the internet and occasionally in print venues such as the Washington Times. Her opinions have been heard on select radio programs across the nation. Additionally, her writing has been recognized by the US Secretary of Education. Copyright © Nancy Salvato 2005

 

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