I've followed the Fair Tax since its inception in the 1990s. I believe the Fair Tax is a bad approach to reform. Even worse, I fear that the loud Fair Tax campaign will hurt the freedom movement as the loud shouts for the Fair Tax will drown out other issues.
This is my belief and I may be wrong.
I believe that the best way to defeat the Fair Tax would be for the Freedom Movement to come up with a less disruptive tax reform proposal.
A long time ago, while studying Object Oriented Programming, I asked myself the question: "Would it be possible to use the system design techniques from the computer industry to streamline the tax collection process?"
In engaged in a thought experiment in which I used Object Technology to rework tax collection. I came up with the following idea which I called the Object Tax.
The first step is to create an abstract model of the current tax code that could be implemented as the current tax with-holding system or as a system of Tax Aware Accounts.
In computer jingo, a Tax Aware Account is an object. It is a smart account. You put money in the account and have to pay a tax to get the money out. You would have your whole paycheck (nothing withheld) put into an account. When you withdraw funds, the account would calculate and pay your taxes. If done correctly, the program would end the need for withholdings and filing an annual return.
With the Tax Aware Account, taxes are collected when a person withdraws money for consumption. It is a personal consumption tax with a progressive tax rate. According to the Fair Tax literature, this is the best structure for a tax code.
The Object Tax defines the behavior of a Tax Aware Account. We would then ask third party providers to implement the design. Implementation would include a rigorous system of testing and certification.
The Tax Aware Accounts would be hosted by local accountants and financial institutions. Banks could extend the Tax Aware Accounts by adding budgeting and financial management tools.
The Object Tax is not disruptive. We use principles from system design to create an alternative to the withholding system that is implemented by third party providers.
It is a fun idea.
In my opinion, this idea is worth exploring.
Now for the big hang up.
I live in Utah. The body politic in this state bought into the Covenant America argument.
Covenant America holds that the Constitution was revealed by the Heavenly Father to usher in his new church in the Latter Days.
Proponents of the Fair Tax claim that the Sixteenth Amendment that created the income tax is Unconstitutional and that the Fair Tax will restore the Constitution as it was reveal by the Heavenly Father.
This idea that the Sixteenth Amendment is Unconstitutional is complete and utter nonsense. Yes, the Founder sought to limit the Federal Government by barring the Federal Government from direct taxation. We had a foolish system in which the Federal Government taxed the states based on the census.
This is exactly like the system devised by Emperor Augustus in year zero. The Census of Quirinius had ordered everyone to return to their place of birth to be counted. Christ was born in a manager for tax compliance. Taxing the states based on the census data was stupid in year zero. It also proved stupid in the 19th century.
The Fair Tax actually is direct taxation and is as dependent on the sixteenth amendment as is the income tax. The Fair Tax is a tax set by the Federal Government and mandated to the states. It does not restore Constitutional balance. But that is a different story. The people who hold that the sixteenth amendment is unconstitutional don't exactly apply logic to their thinking.
In my opinion, the tax reform debate should be about the best way to proceed with the painful issue of tax reform.
I believe that the best approach is to use system design techniques to transition from the current withholding system to one based on Tax Aware Accounts administered by third parties.
I have all sorts of reasons why this would improve both the tax system and citizen involvement in their governance.
I have strong arguments that this is a better approach to reform. Unfortunately, I will never have a chance to argue these ideas because the argument is based on the idea that the Sixteenth Amendment is Constitutional.
I live in a state where I lose the argument that Constitutional Amendments are Constitutional.
The one and only way that I could work on developing the ideas I worked on is if someone outside of Utah invited me to a meeting. I don't see that happening.
The Framers of the Constitution did not claim that it was revealed by a divine authority. They did not claim it was a covenant to establish a new church. They actually said the opposite. They did not want the government to be in the business of establishing religions.
The Tax Reform Debate should be about finding the best way to engage in reform taxes. But that debate cannot happen because a powerful local church holds the notion that the Constitution was Revealed by God and that amendments are Apocrypha.
To me, this is pure insanity. So, I wrote a few posts critical of Covenant Theory held by the powers that control Utah.