* Eight Objections: Libertarian talk show host Neal Boortz did not fair well trying to answer Christian talk show host Bob Enyart who presented these eight objections to the Fair Tax, which is a National 22% Sales Tax designed to replace the U.S. federal income tax. (See this argument expanded to Ten Objections at KGOV.com/sales-tax.)
1. No Right of Conscription: The government does not have the right to force a businessman to become a tax collector, something that millions rightfully hate. NB Reply: Could not give a defense for this other than, we already do this, we already conscript tax collectors, which Neal later admitted is not a valid defense, and then he said he'd have to look into it.
2. Fraud Enticement to Strangers: A sales tax entices millions of strangers, who briefly meet, to conspire together to defraud the government, fueling a much greater illicit underground economy, because we all buy and sell from a hundred times more people than we employ. NB Reply: Disagreed that the buying and selling relationship will give opportunity to more people to defraud the government than the employment relationship does. (Neal probably misunderstood the point.)
3. Start-up Impediment: A sales tax makes it far more difficult to enter into business, especially for the poor, the young, and those with less business capability. NB Reply: We already have a sales tax.
4. Vastly Greater Transaction Cost: There are a billion sales transactions per day, but vastly fewer income tax transactions, which means it is a far greater burden on the economy to process sales transactions. NB Reply: No, economists disagree with that. (Neal probably misunderstood the point, since it's irrefutably obvious that the cost of processing 400 billion sales tax transactions per year is more that processing perhaps four billion income tax transactions per year.)
5. It's the UnFair Tax: Paying a 22% sales tax on consumables, etc., is grossly unfair comparing the wealthy to those struggling in the middle class, since those who struggle would be taxed on huge percent of their incomes, which they spend just to survive, whereas Bill Gates might spend only $30 million per year, which means that he would pay tax on only one percent of his income. NB Reply: Unresponsive.
6. Conflict of Economic Interest: Government will obsessively encourage spending and borrowing, rather than increased incomes, saving and investment. NB Reply: Bob, this is your first valid point. All the others have been the most irrelevant and inane objections I've ever heard.
7. To Not Tax the Poor Hurts Them: Since the Fair Tax exempts the poor, they will not have ownership in our society, and cannot walk down the street with their head held high. The poor need to pay the same percent, with a flat income tax, as everyone else, especially to build their own self respect. NB Reply: Yes, handouts do create a sense of dependency with the poor, but I don't think exempting the poor from paying tax will have that same effect.
8. You Don't Need a Sales Tax to Eliminate the IRS: A flat income tax does not require a tax collection agency. People can simply remit their taxes, just as businesses would remit their sales tax revenues. NB Reply: Then you are arguing against all taxation. (Neal misunderstood the point.)
* Immediate Debrief: Bob analyzes his sales tax debate with Neal Boortz and rewrote and recites The Tax Poem.
Listener's comment from TheologyOnline.com:
"From what I have seen in Canada, Bob Enyart is right on the money. (As he is 99.9% of the time!) I can't believe Neil Boortz is a Libertarian, his 22% tax seems downright socialist, and the scheme is filled with other pitfalls. Our 7% to 15% sales taxes in Canada has created a vast underground economy. ... One third of construction work in Ontario is done in the underground economy now. A number of contractors in Ontario offer a 7% discount as long as the amount is paid in cash, and no receipt is made, and most people go for that 7% discount. Bob is right when he says that a sales tax will encourage strangers to conspire tax fraud. Since the implementation of the 7% Goods and Services Act Revenue Canada doubled the number of auditors it employed. Also, in communities that are close to the boarder, a number of Canadians do their shopping in the United States, and avoid our 15% sales tax rates. This has caused our customs service to become more concerned with the collection of the 7% GST than securing the border." -A Canadian Listener to BEL
Finally, Here's Two More (Bonus) Points :)
9. It's the UnFair Tax: Paying a 22% sales tax on new goods is grossly unfair comparing the middle class to the poor and the super wealthy, with the unfair burden falling on the middle class, as it generally does with all creative economic proposals. With the "FairTax", the lower class pays no taxes. The super rich, who easily spend only a small percent of their income get taxed only on that small percent of their income. Whereas, the middle class gets taxed on approximately half of its income, all of which they spend just to survive.
10. God Did It: The Scriptures record God's solution to the problem of equitably and efficiently collecting revenue from the entire population for a centralized fund. God implemented a flat income tax of ten percent to fund the operations of the priesthood.
Today's Resource: Sometimes we Christians need a push forward to grow spiritually. After forty years as a Christian, these Growth Pack teachings represent Bob's best effort at discipling other Christians to mature in his or her relationship with God!