Indecision: "Ron Paul Floats Crazy Idea That Republicans Should Act Like Republicans"

[Knightskye]

http://blog.indecision2008.com/2008/11/17/ron-paul-floats-the-crazy-idea-that-republicans-should-act-like-republicans/

Read it quick before they add in a bunch of insults. ;)

[Athan]

great find! thanks!

[socialize_me]

great find! thanks!

great thanks! find!

[tonesforjonesbones]

Ron Paul made more impact than you think...Mike Huckabee is sounding VERY libertarian these days...he reminds us that we must work on maintaining a moral society...(Thomas Paine) and I heartily agree with him. He is also for the Fair Tax...which Ron Paul said would be better than what we have currently..so I consider that somewhat an indorsement from Dr. Paul on the Fair Tax..he said he could go along with it. Tones

[rancher89]

It doesn't say it's closed, but my response didn't post...

[ShannonOBrien]

This is a very tame post compared to what we usually see on the indecision blog. I wonder if negative comments make a difference. Who knows...

[MikeStanart]

Ron Paul made more impact than you think...Mike Huckabee is sounding VERY libertarian these days...he reminds us that we must work on maintaining a moral society...(Thomas Paine) and I heartily agree with him. He is also for the Fair Tax...which Ron Paul said would be better than what we have currently..so I consider that somewhat an indorsement from Dr. Paul on the Fair Tax..he said he could go along with it. Tones

I absolutely agree that we as individuals should try and maintain a moral societly. But what you are proposing is an act of force.

You are trying to legistlature morality and coerce others into following it through laws and threats of punishment if they do not follow.

Is that what Jesus would do?

[WRellim]

Ron Paul made more impact than you think...Mike Huckabee is sounding VERY libertarian these days...he reminds us that we must work on maintaining a moral society...(Thomas Paine) and I heartily agree with him. He is also for the Fair Tax...which Ron Paul said would be better than what we have currently..so I consider that somewhat an indorsement from Dr. Paul on the Fair Tax..he said he could go along with it. Tones

Initially I thought the "Fair" tax was a really good idea too...

I really liked the idea of simplifying the tax code, and getting rid of all of the "distortions" that the income tax causes in our society (all kinds of business AND personal decisions are made based at least partially on "what are the income tax implications?" and that question in and of itself causes a lot of "mal-investment" -- for example the whole deduction for mortgage interest, if we had no income taxes and therefore no deduction, people would have been MUCH less likely to mortgage and remortgage their homes).

Similar distortions happen in business -- they locate factories or headquarters in states with lower taxes. They buy or don't buy additional equipment in part based on whether they can get some type of "investment tax credit" to cover the cost; they provide employee health care rather than higher wages because they can deduct the costs, and employees like it because it comes "tax free"; people put their savings in 401K's and then the stock market via mutual funds MAINLY because of the tax deferrals; etc. ...ad nauseum!

I think a lot of those distortions were initially quite natural, but entirely UNintended consequences (though I think people could argue otherwise in majority of the more recent cases of deductions & tax credits, etc. -- politics and influence definitely play a part, as does the desire by bureaucrats to "control" and "manage" society; and each of THOSE has reactionary unintendec consequences as well -- as we have seen with the market & mortgage crises).


So I can definitely see how *almost* any system that simplified and "flattened" the tax code -- especially if it was then disassociated with income -- would be beneficial.




BUT... (you knew there was a but, right? It's a fairly big one as you can see.)

But then I reconsidered several of the implications of the proposed "fair tax" system -- most especially the "prebate" concept -- and what would the "unintended consequences" of such a program be? Much in the vein of Henry Hazlitt -- what things are we NOT looking for but which will be present anyway?

1) Well, for starters, the "Fair Tax" with its "prebate" payments puts everyone on government "dole" purportedly getting "uniform" (aka "Fair") monthly payments from Government -- EVERYONE -- Mom, Dad, Grandma, Grandpa, Kids, etc. Monthly payments (direct deposit no doubt) into REQUIRED banking accounts that the government then knows about and has direct EFT deposit/withdrawal rights to.

And it does seem reasonable that such payments would be PER PERSON, I mean if your food is taxed, then obviously regardless of age, the taxes paid on food, clothes, etc. for people with children (or live in elderly parents, etc) will be higher than for singles and childless couples.

So at the outset, I think we CAN agree that this would tend therefore to PENALIZE single people (because TWO or more CAN live more cheaply -- per person -- than ONE), and conversely this means it would act as a type of "subsidy" to parents and families (not necessarily a bad thing, just looking at it objectively). (If the amount of "prebate" per child is too small, then the opposite obviously occurs ...then parents and families will be penalized and singles or childless couples would be subsidized -- either way it will not be "fair" in the widest sense.)

But I see inherent PROBLEMS with everyone getting a "payment" or "prebate" from the Government (and it is NOT simply my "gut" reacting against it, because I * DO* understand the "concept" here -- that the "prebate" is really just a rebate of taxes on things that probably shouldn't be taxed to begin with -- ergo it is your money given back to you.)

2) Can a "standardized" system of taxes and "prebates" be both uniform and yet "fair"? Seriously? Uniformity across the entire nation? Food, rent, gasoline and other costs vary tremendously from state to state and even within states.. and so any percentage based sales-tax collected will also vary non-uniformly. And unless we demand everyone account for and report ALL of their purchases (so that the "prebate" in fact becomes a literal "rebate") how would we account for these differences? Certainly each state will "lobby" for higher payments to its own citizens, and for lower payments to others.

And likewise, unless we require burdensome reporting of all purchases (and thus taxes) if the prebate payments are uniform "per person" then obviously "frugal" people will be subsidized and "spenders" will be penalized (that could be considered a form of social control. Beneficial or not -- it MAY indeed a "good" thing -- but is it really a "fair" thing if some people are "prebated" MORE than they pay in taxes on basic goods, while others receive LESS than they actually paid? Certainly SOME such discrepancy is inevitable, but how great a discrepancy is acceptable?)

3) I can easily see the federal government using the "prebate" as a form of "control" over people and as a means of "changing" aspects of society (much as they have used the income tax, and federal monies handed over to states) -- in other words, over time they will attach an increasing number of "strings" to those payments:


Are you a Father with late or missing with Child-Support payments? No problem -- they will just "administratively" subtract it from your prebate payment (much easier than garnishing your paycheck when you work at a private company).
Student loans not being repaid? That's OK, we'll just have the Federal Government "subtract" a suitable payment from your prebate -- you can make a harship claim and appeal the amount through the bureaucracy.
Or maybe you're a SMOKER ...or perhaps you were a bit OVERWEIGHT at your last doctor visit? A penalty can easily be "administratively" be assessed against your "prebate" (justified, of course, on the grounds that "someday" you will cause the "state" additional medical expenses).
What you mean you DIDN'T visit your doctor twice this year as required by the "Equal Access Health Care Law" ? (And therefore didn't comply with the mandatory drug tests). Hmm, I guess we'll need to assess a "fine" and subtract that from your prebate.
Home school? Well then your child must at least attend the mandatory "socialization" sessions once a week and perform his "voluntary" Obamanation community services hours -- otherwise we'll just have to "hold onto" those payments (on your child's behalf of course).
Refused to have your children vaccinated? Your child's prebate will be suspended until you comply.
Perhaps you got a speeding ticket? No need for credit card -- the state (or city/county/etc) will just request a "transfer" of a portion of your prebate.
Or heck -- they pass a law saying you have to turn in your guns, or face an "administrative suspension" our your prebate "until you elect to comply.")
Etc. Is it really necessary to go on? Since the "prebate" will amount to a significant portion of people's expected incomes (since they will be paying a 30% plus tax on everything they buy) -- anything "system" or "reason" that can interferes with those payments will exert tremedous pressure on people (at least the poor and middle class). And as time goes on, this would become the PRIMARY means of government control, and not only the FEDERAL government, but state and local government entities will be given "administrative" functions over it as well.


And if you think the above COULDN'T happen -- well you haven't been paying attention to how governments work.

4) Then there is the potential "chaos" effect within families -- certainly in a modern "liberated" world, the husband & wife get "separate" prebate payments into specified accounts? And of course the children's payments need to be taken into consideration as well... to which parent will they go? What effect will that have on how household finances are controlled and spent or misspent? (What about the "alcoholic" or spendaholic spouse? WHO has access to the accounts, and how is that determined or controlled?)

5) And what about the "transition" period with adolescents? Many kids begin working jobs at age 16, and a lot of them then spend significant amounts as well. At what age does the child get the payments directly in their own accounts? Who determines that? On what Basis (simple age?) And what effect will this have on kids that just turned 18 but still live at home? (Do a bit of reading on socialist countries to see the effects there).

5) And lastly what of the Black Market that would inevitably result -- and the enforcement response to it. Any and EVERY system of taxation that has a high tax "premium" -- especially one where taxation exceeds 10% -- WILL end up creating a black market that functions as a means AROUND that tax. Enforcing the collection of that tax then virtually requires significant domestic POLICE actions against those black markets; so will we essentially end up with the equivalent of "prohibition" style raids on a variety of businesses and individuals? And as well have intrusive audits of sales AND purchases and indeed close scrutinization of nearly ALL "private" transactions to make certain the "fair tax" has been properly collected, reported, and remitted?



Just as the income tax has distorted our BUSINESS and FINANCIAL matters -- through the "prebate" the "Fair Tax" mechanism would certainly LESSEN the level of intrusion on what and how we MAKE our money -- but would conversely INCREASE the levels of intrusion and disruption in virtually everything else we do (what we spend, where we spend it, etc).

So in the end, the "simplifying" of the tax code is not enough. If the government STILL has an "intrusive" busy-body approach, then rather than FREEING the people from Big Brother, the "Fair Tax" and its "prebate" mechanism might actually be a means for unwittingly handing over even MORE control over our lives and society.


So when people ask me if I am for the "Fair Tax" -- I give a sincere "NO WAY!" -- because I have thought the matter through.

[georgiaboy]

Ron Paul made more impact than you think...Mike Huckabee is sounding VERY libertarian these days...he reminds us that we must work on maintaining a moral society...(Thomas Paine) and I heartily agree with him. He is also for the Fair Tax...which Ron Paul said would be better than what we have currently..so I consider that somewhat an indorsement from Dr. Paul on the Fair Tax..he said he could go along with it. Tones

Don't tell Mike he's sounding libertarian - according to him, it's very different from conservatism. He's wrong, of course.

And Tones, please tell me this isn't the start of your invoking Huckabee in every other post like you were with McCain for the last few months.

[Knightskye]

Ron Paul made more impact than you think...Mike Huckabee is sounding VERY libertarian these days...he reminds us that we must work on maintaining a moral society

Tones, Huckabee thinks Libertarians are a threat to conservatism.

It's in his new book, which I'm sure you've pre-ordered already.