Fair Tax Blogburst 9/13/06

by Jonathan of Publius Rendezvous

To borrow what was spoken of last week in the Fair Tax BlogBurst, I thought I would take this burst, and build upon the debate begun by one of Debbie's readers at Right Truth. For those of you knew to the audience, here is the original burst, and here is the assertion made by "Ralph Ekwall."

We now have a progressive income tax system that imposes a higher rate of taxation for high income earners. The so-called “Fair Tax” would impose a higher rate of taxation on middle and low income earners and allow most of the money earned by wealthy people to be untaxed.

I tend to disagree entirely with the thesis underpinning any progressive tax system delineating that there are certain brackets of individuals who should be punished just for the simple fact that they earn higher incomes than other individuals.

The fundamental creed of this dogma accepts the premise that the spectrum of incomes is nothing more than a zero-sum game. Thus, individuals do not have any chance whatsoever to rise to those higher brackets and better themselves as they move throughout life.

However, I digress, for I wanted to discuss was the specifics surrounding "the prebate." I believe this scheme encapsulates the “equality” sought by “progressive” proponents of any progressive tax scheme better than the progressive tax could ever hope to achieve. That is, equality can be seen only if one does not have class warfare and envy as the basis for their tax structure.

So, how does this “prebate” work?

All valid Social Security cardholders who are U.S. residents receive a monthly rebate equivalent to the FairTax paid on essential goods and services, also known as the poverty level expenditures. The rebate is paid in advance, in equal installments each month. The size of the rebate is determined by the Department of Health & Human Services’ poverty level guideline multiplied by the tax rate. This is a well-accepted, long-used poverty-level calculation that includes food, clothing, shelter, transportation, medical care, etc. (See chart in Figure 1 below)

And, as we see in how this "prebate" works, one is able to ascertain the notion of equality realized by the "prebate." The prebate seeks to treat a "necessity" just as their name implies they should be treated. The necessities are the substance and the needs that every American needs in order to survive. It treats every American as if they are the same in the basics of what they need to survive.

It treats all Americans equally.

In this definition of "equal" all Americans are treated the same no matter their socio-economic status, which brings up another subject....constitutional history.

At this moment, I would really like to express my appreciation to TD for being patient with me throughout the course of this summer. As some of you may know, I sat for the bar recently and I have been detained with an interstate move, new employment and biting my fingernails off as I wait for the bar results. But, enough of my excuses, Terry and I started this BlogBurst and, unfortunately, Terry has had to shoulder much of the load this summer. He has done a tremendous job and I know all of you appreciate his hard work and dedication. I just wanted to say thanks, good buddy!

The FairTax Blogburst is jointly produced by Terry of The Right Track Blog and Jonathan of Publius Rendezvous. If you would like to host the weekly postings on your blog, please e-mail Terry. You will be added to our mailing list and blogroll.