I have been having interesting discussions with AndrewS recently about his view that the FairTax is quite flawed an about my view that the FairTax would be the best thing since sliced bread. AndrewS posts on many interesting topics and he has very interesting and well-thought-out and extremely well written communication about his positions – many of which I agree with. His last communication “Why Argue” seems to make the case that by pointing out perceived theoretical flaws in the FairTax without offering up solutions is somehow a good thing. I see things differently.

In this world, I know two things with certainty… (1) those entities who succeed (individuals, businesses, governments) are those that come up with solutions to problems – not just problems with solutions and (2) you cannot please everyone all of time. It is easy to poke holes in any theory… 1770’s – Will democracy (a theory at that time) be a good thing? 1985ish - What happens if we (Microsoft) release Windows 3.0 with known imprefections? 2008 - What are the risks of the prebate becoming some uncontrollable welfare mechanism? What happens if the video rental service games the system by selling once-used DVDs as used in order to avoid taxation? Sometimes, though, implementing an imperfect solution is far better than doing nothing. 

Why did I mention Windows 3.1? Because I am in the technology industry. Also because many of us know that IBM’s OS2 and Apple’s Macintosh OS were far better at the time. But had Microsoft not released Windows 3.1 as an answer to the graphical world that was taking the computer operating systems by storm, it would have missed the boat entirely.   Were the risks weighed? I have to think YES. Did the rewards outweigh the risks? Absolutely YES. What would have happened had Microsoft taken a few more years to get the product much more stable before marketing? OS2 or Macintosh OS would have taken over market share and Microsoft would be a shadow of its current self.

Now, in our fast-moving globally competitive world of today… can we afford for the United States of America to miss the boat? What boat?   

Folks, while there are many things to get excited about with the FairTax, one of the most exciting things is making the United States more competitive both for our own consumers and for consumers away from our lands who buy products and services offered by U.S. companies. The prosperity argument is huge… I just don’t see it addressed in our current tax structure (other than rhetoric about penalizing companies for sending jobs overseas by some presidential candidates). I also don’t see it addressed with the FlatTax as I understand it. 

Again, the prosperity argument is that, under the FairTax, taxation is stripped away completely from the productivity side and replaced on the consumption side (national sales tax – with prebate). When this happens, it levels the playing field with imported items (untaxed coming into our lands) such that American-made items can complete for shelf-space at in our retail stores and markets. Stripping away these taxes from the productivity side also makes US-made goods/services more competitive globally.

By persuading others about “perceived flaws” with the FairTax without offering up solutions, I argue that we remain stuck in neutral (or worse yet… reverse) in a fast-changing globally competitive market. 

The mountain to climb in order to take back our country from politicians who create winners and losers with our 66,000 pages of tax code is extremely high. Washington is not going to want to give up this power without a fight. It is very clear to me that We The People need to rally around one viable (perhaps not perfect) alternative to the current system otherwise guess what? We get to keep our existing oppressive and abusive current system that manipulates the free markets and that puts us at a competitive disadvantage. 

We have an opportunity to be honest about things and recognize that our tax code (including Social Security and Medicare) is a huge problem that, if left unsolved, will cripple us.   We also have an opportunity to do something. Actively supporting the FairTax is doing something that is fair and that has extreme benefit in many areas that touch our lives.

Peace,

YK