Saturday, January 12, 2013

In search of a fair tax

The idea of a so-called fairtax (one word)  is being discussed, but it is more "sound and fury, signifying nothing" than anything serious.  I doubt that any single tax could be fair; however, a combination of taxes can come nearest it.  What brings this to mind is Governor Jindall's proposal to replace the state income tax with an increase in the sales tax. While I am in favor of revising the tax code,  I am strongly  opposed to this idea.

To approach fairness, a tax should be tested on  whom  it mostly benefits and who is most able to pay. That, to me, makes the sales tax the unfairest tax because the poorer a person is the most hurtful the sales tax is. It stands to reason that high income earners pay more because they buy more, while a poor family pays a high percentage of their income since, though spending less, they pay taxes on necessities.

Income taxes appear to be the fairest because they are based on earning and ability to pay.  However, we all know many wealthy people utilize tax shelters, deductions and exemptions to reduce their taxes.  Not illegal or immoral, but at present everyone agrees the tax regulations need changing and updating.  As I've said, a fair tax is difficult to devise.  Increasing the sales tax is far from it.

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