OK, I’m finally getting off my can and tackling the “Katrina Auction” pieces. The first up is Zach Stover’s, who wanted my opinion of the Fair Tax proposal.
I’ve looked into the Fair Tax proposal, and I like it. It’s simple, it’s sensible, it seems “fair” (which is an incredibly loaded word), it’s elegant, and it’s practical. Which makes it even more of a damned shame that it’s simply not gonna happen.
There are two great forces in American society, and in the case of the Fair Tax, they are united in opposing it. Those are enlightened self-interest and inertia. Or, to put it another way, selfishness and greed.
For all the people being nibbled by the current tax structure, there are others who benefit greatly from it. The system, as convoluted and confusing and chaotic as it is, did not randomly evolve. Every single twist was created by someone with a very specific purpose in mind — to reward or punish an individual, a group, or a corporation. Every single outrageous aspect of the tax code has its defender.
Moreover, an entire industry has grown up dependent on the tax structure staying exactly as it is. Lawmakers, who view passing laws as their way of showing their constituents that they are doing their job. Bureaucrats, whose job is to oversee, administer, and interpret the tax code. Lobbyists, who justify their salaries by getting the lawmakers and bureaucrats to shape the laws and interpretations for the benefit of their clients. Tax attorneys (much like my own Senator, Judd Gregg), whose whole livelihood revolves around rescuing people from the tentacles of the tax code. Tax preparers, who charge hundreds or thousands of dollars to wring the most money they can back from the government and into the hands of those who paid it. Tax software publishers, who figured out how to replace the above folks with a CD-ROM. And even con artists, who sell people on plans to “opt out” of the supposedly “voluntary” income tax, or convince them that they are exempt from taxes as part of “slavery reparations” or a zillion other scams.
They might not have the numbers, but they have the motivation. Toss in the factor of “withholding,” where people never see the money they pay in taxes, but rejoice every year when the government might deign to give them back a portion of THEIR OWN MONEY (a category I ashamedly fall into), and you have a classic case of the old “boiling frog” urban legend — where, it is said, that if you put a frog in a pot of room-temperature water and then slowly heat it to boiling, the frog will happily sit there and boil to death.
In favor of the flat tax, a few highly-motivated activists. Against it, dozens of large corporations, hordes of bureaucrats, lawyers, and politicians. I might not like the answer, but I know which side I think will win.
Screw that. I definitely don’t like the answer. The Fair Tax plan deserves a Fair Shake. Unfortunately, I don’t see it happening. Tthe race may not go to the swift, nor the battle to the strong — but that’s the way to bet.