Column for Feb. 18, 2010

I found that on occasion spend money like a drunken sailor on shore leave. I have been doing so since Friday. I guess that it is my part to continue a stimulus package for the local economy.

Actually, I just got my federal tax refund. It is the biggest refund I have ever gotten. With some deductions that have come my way this year and others I have just not taken advantage of, I did well on tax year 2009.

A few things strike me again this year as they do every year. With our current taxation system, we often lose sight of just how much we actually do pay in taxes. I started keeping tally of all the small taxes I pay such as property taxes, vehicle registration, and even some sales taxes. Doggone that adds up. I paid the most I have ever paid in federal and state income taxes this past year. I guess that is a good problem to have since it means I made more money than I ever have before. That is a good thing since my wife has been out of work for a year now.

I guarantee that if we had to cut a monthly check for our individual shares of taxes rather than have some form of payroll deduction, we would tar and feather some revenue agents in this country as was done in the 1700's.

I am glad that I was able to get as much back this year as I did. It is enabling me to get a few home improvements done, do some increased giving, cover some unexpected medical expenses, do more grocery and baby supply shopping, replace a bedding set, and even purchase some personal wants. I would trade that all in for a more fair tax system, though.

Tax refunds are just that, a refund of an overpayment of taxes. We eagerly await them every year, although we have just lent that money to the government interest free. If it was the other way around, I guarantee that we would be subject to penalties and interest. Ask me how I know.

I would prefer a tax system that is based upon consumption rather than income levels. That way, all people pay the same rate just as we do with the state sales tax. Everybody pays the same rates and pays more if they spend more. Spending money is a voluntary act and that means that you have control over the amount of taxes you actually pay.

If I could actually get my entire paycheck every two weeks under an alternative tax system rather than have taxes siphoned off and I get a net check, I would love it. If only there was a different system out there. Wait a minute…there is! It is called The Fair Tax and you can find out more on the internet at www.fairtax.org. Under that tax system, we would pay in effect a national sales tax rather than a national income tax. The price of goods would not go up since current prices have built into them the inherent cost of business income taxes. When the income tax is non-existent, there is no need to increase the cost of goods to cover the cost of taxation. An alternative embedded sales tax within the price of a product would be about the same we pay now.

One thing about the Fair Tax is that it is much closer to the original concept of taxation as laid out by the Founding Fathers. There was a great amount of hatred towards the idea of direct taxation during the Constitutional Convention of 1787. Under the Articles of Confederation, the national government was limited to taxing the states for the cost of running the government. It was up to each state to dole out their fair share of revenue to the national treasury. By so doing, states could punish or manipulate the national government by withholding their share of the burden.

During The Philadelphia Convention, imposts and duties on imports and exports were heavily discussed. Essentially, duties on imports amount to a tax on the consumption of goods. The Fair Tax is very close to that same concept. Therefore I find it to be much closer to the core of American values.

Any tax code in which behavior can be influenced, encouraged, or punished is inherently unjust and fully open to corruption. Any system that taxes some people at a higher rate than others and some even pay no taxes at all is just plain immoral. The Fair Tax for the most part eliminates these concerns. There are a few provisions in the Fair Tax I would like to see changed, but it seems to be the most perfect form of taxation out there. I would much rather pay taxes under it, even if I did get a huge tax refund this year.