WEBVTT

NOTE The Flat Tax Is Not Flat and the FairTax Is Not Fair

1
00:00:00.000 --> 00:00:08.200
Contrary to the previous tax that you just heard about that most of you think is ludicrous,

2
00:00:08.200 --> 00:00:13.600
some libertarians think that these two taxes are a good idea that I'm going to talk about.

3
00:00:13.600 --> 00:00:19.200
The flat tax is not flat and the fair tax is not fair.

4
00:00:19.200 --> 00:00:26.600
Our current income tax system, inaugurated in 1913 with the adoption of the 16th Amendment,

5
00:00:26.600 --> 00:00:34.840
began with a 1% tax on taxable income above $3,000, $4,000 for married couples.

6
00:00:35.640 --> 00:00:42.600
A series of surcharges of up to 6% were applied to higher incomes, with the maximum rate being 7%

7
00:00:43.880 --> 00:00:53.560
on taxable income over $500,000. Less than 0.5% of the population ended up paying income tax.

8
00:00:53.560 --> 00:01:01.320
Tax. From these humble beginnings, the income tax soon blossomed, thanks to World War I,

9
00:01:01.320 --> 00:01:09.560
into a tax with a minimum rate that doubled and a maximum rate that reached 77% on income

10
00:01:09.560 --> 00:01:18.160
over $1 million. The rates did not fall significantly until 1925. In the middle of the Great Depression,

11
00:01:18.160 --> 00:01:25.320
The top rate rose to 79 percent. During World War II, the tax rate for those in the highest

12
00:01:25.320 --> 00:01:34.380
income bracket reached an astounding 94 percent. The Internal Revenue Code of 1954 resulted

13
00:01:34.380 --> 00:01:43.080
in 24 brackets with rates ranging from 20 to 91 percent. The top rate remained at 91

14
00:01:43.080 --> 00:01:53.600
until 1964. Under the Economic Recovery Tax Act of 1981 and the Tax Reform Act of 1986,

15
00:01:53.600 --> 00:02:00.680
the top marginal tax rates were lowered to 50 and 28 percent respectively. The Economic

16
00:02:00.680 --> 00:02:08.080
Growth and Tax Relief Reconciliation Act of 2001 established the current tax brackets

17
00:02:08.080 --> 00:02:19.360
of 10, 15, 25, 28, 33, and 35%. There's no question that the federal tax code is too long,

18
00:02:20.160 --> 00:02:28.320
too complex, too intrusive, too confusing, and too inequitable. The members of Congress responsible

19
00:02:28.320 --> 00:02:35.600
for the tax code would not even disagree. As a consequence, cries for tax reform can always be

20
00:02:35.600 --> 00:02:40.480
be heard from every quarter, and especially around election time.

21
00:02:40.480 --> 00:02:48.040
There are even organizations dedicated solely to tax reform, like Americans for Tax Reform,

22
00:02:48.040 --> 00:02:55.400
Reform AMT, Citizens for Tax Justice, and Americans for Fair Taxation.

23
00:02:55.400 --> 00:02:59.920
Since the federal government is always looking to increase its revenue, while at the same

24
00:02:59.920 --> 00:03:05.340
In the meantime, making Americans feel better about paying their taxes, it has also climbed

25
00:03:05.340 --> 00:03:13.160
aboard the tax reform bus, most recently in 2005, when President Bush formed the President's

26
00:03:13.160 --> 00:03:17.740
Advisory Panel on Federal Tax Reform.

27
00:03:17.740 --> 00:03:24.080
I am sorry to say that principled libertarians who welcomed gradualism toward the goal of

28
00:03:24.080 --> 00:03:41.080
while substantially reducing or abolishing the income tax, while at the same time shunning any compromise of the principle that taxation is theft, like those friends and supporters of the Mises Institute, are in the minority.

29
00:03:41.080 --> 00:03:51.080
Liberals who want to use the tax code for their social engineering and income redistribution schemes are not opposed to taxes on principle.

30
00:03:51.080 --> 00:03:57.180
Barack Obama ran campaign commercials openly boasting that no taxes would be raised on

31
00:03:57.180 --> 00:04:02.720
any American making under $250,000.

32
00:04:02.720 --> 00:04:10.980
This of course means that he intends to fleece any American making over $250,000.

33
00:04:10.980 --> 00:04:14.960
Conservatives are not generally opposed to taxes on principle either.

34
00:04:14.960 --> 00:04:20.940
They have no problem taxing the American people to fund bloated defense budgets, U.S. military

35
00:04:20.940 --> 00:04:27.100
Adventures Around the World, the CIA, FBI, and anything related to law enforcement or

36
00:04:27.100 --> 00:04:35.340
security, faith-based welfare programs, educational vouchers, abstinence education programs, the

37
00:04:35.340 --> 00:04:44.100
war on drugs, and various conservative pork projects. But what's up with libertarians?

38
00:04:44.100 --> 00:04:50.260
Brink Lindsey of the Cato Institute, supposedly a libertarian think tank, wrote in an online

39
00:04:50.260 --> 00:05:00.580
Tax Reform also offers the possibility of win-win bargains.

40
00:05:00.580 --> 00:05:02.640
The basic idea is simple.

41
00:05:02.640 --> 00:05:07.660
Shift taxes away from things we want more of and onto things we want less of.

42
00:05:07.660 --> 00:05:14.040
Specifically, cut taxes on savings and investment, cut payroll taxes on labor, and make up the

43
00:05:14.040 --> 00:05:18.020
shortfall with increased taxation of consumption.

44
00:05:18.020 --> 00:05:22.420
Go ahead, tax the rich, but don't do it when they're being productive.

45
00:05:22.420 --> 00:05:27.480
Tax them instead when they're splurging, by capping the deductibility of home mortgage

46
00:05:27.480 --> 00:05:31.980
interest and tax incentives for purchasing health insurance.

47
00:05:31.980 --> 00:05:35.140
And tax everybody's energy consumption.

48
00:05:35.140 --> 00:05:41.140
All taxes impose costs on the economy, but at least energy taxes carry the silver lining

49
00:05:41.140 --> 00:05:43.140
of encouraging conservation.

50
00:05:43.140 --> 00:05:49.300
Plus, because such taxes exert downward pressure on world oil prices, foreign oil monopolies

51
00:05:49.300 --> 00:05:52.260
would wind up getting stuck with part of the bill.

52
00:05:52.260 --> 00:05:56.180
So says Brink Lindsey.

53
00:05:56.180 --> 00:06:06.980
Shift taxes, increase taxes, tax the rich, impose new taxes, use the tax code to influence

54
00:06:06.980 --> 00:06:12.540
public policy, what kind of a libertarian tax reform plan is this?

55
00:06:12.540 --> 00:06:18.980
How about reduce, cut, eliminate and abolish taxes?

56
00:06:18.980 --> 00:06:27.020
Not deductions, not exemptions, not credits, not shelters, not loopholes, taxes.

57
00:06:27.020 --> 00:06:34.780
Two specific tax reform plans that some libertarians have fallen for are the flat tax and the

58
00:06:34.780 --> 00:06:42.680
and the Fair Tax. Both plans promise to invigorate the economy, increase employment, and raise

59
00:06:42.680 --> 00:06:49.160
everyone's standard of living. Neither one is true to its name. Neither one is an incremental

60
00:06:49.160 --> 00:06:56.140
step toward overall lower taxes. Both are fraught with problems and contradictions.

61
00:06:56.140 --> 00:07:02.520
Both are revenue-neutral plans that would fund the government at the same obscene level

62
00:07:02.520 --> 00:07:05.360
that it is funded right now.

63
00:07:05.360 --> 00:07:08.200
The flat tax is an income tax.

64
00:07:08.200 --> 00:07:12.700
It is the tax reform idea that has been around the longest.

65
00:07:12.700 --> 00:07:19.400
First proposed by economist Milton Friedman in 1962, the flat tax entered the mainstream

66
00:07:19.400 --> 00:07:26.280
through a 1981 Wall Street Journal article by Hoover Institution economists Robert Hall

67
00:07:26.280 --> 00:07:33.400
and Alvin Rabushka, called A Proposal to Simplify Our Tax System.

68
00:07:33.400 --> 00:07:38.960
This article grew into a 1985 book published by the Hoover Institution Press called The

69
00:07:38.960 --> 00:07:40.360
Flat Tax.

70
00:07:40.360 --> 00:07:48.920
A second edition was published in 1995 and an updated revised edition in 2007 that can

71
00:07:48.920 --> 00:07:53.600
hardly be called either revised or updated.

72
00:07:53.600 --> 00:07:58.480
Aside from this book, the flat tax gained national prominence when House Majority Leader

73
00:07:58.480 --> 00:08:05.160
Dick Armey pushed the idea of a flat tax after the Republicans gained control of Congress

74
00:08:05.160 --> 00:08:07.460
during the Clinton administration.

75
00:08:07.460 --> 00:08:12.760
A few bills based on the Hall-Ribushka plan were then introduced in Congress, but came

76
00:08:12.760 --> 00:08:14.500
to nothing.

77
00:08:14.500 --> 00:08:20.280
Other incarnations of the flat tax were pushed by both Democrats and Republicans.

78
00:08:20.280 --> 00:08:25.560
Another incarnation of the flat tax is that of former Republican presidential candidate

79
00:08:25.560 --> 00:08:27.440
Steve Forbes.

80
00:08:27.440 --> 00:08:33.060
His 2005 book is called Flat Tax Revolution.

81
00:08:33.060 --> 00:08:38.400
Under a flat tax, everyone's income is taxed at the same rate.

82
00:08:38.400 --> 00:08:43.360
Forbes says 17 percent, Hall and Robuchka say 19 percent.

83
00:08:43.360 --> 00:08:48.040
And not only are there no tax brackets, there are generally no tax deductions other than

84
00:08:48.040 --> 00:08:53.560
and Personal and Dependent Allowances, Social Security and Medicare taxes would remain as

85
00:08:53.560 --> 00:09:00.840
they are now, the appeal of the flat tax is simplicity, you can do your taxes on a postcard

86
00:09:00.840 --> 00:09:07.120
size form, says Steve Forbes, goodbye compliance costs.

87
00:09:07.120 --> 00:09:14.840
The problem with the flat tax is a simple one, the flat tax is not flat, and furthermore,

88
00:09:14.840 --> 00:09:23.400
No one actually pays 17% or 19%. In fact, taxpayers don't even pay the same percentage.

89
00:09:23.400 --> 00:09:29.280
The flat tax is actually a highly progressive tax. It is more progressive than our current

90
00:09:29.280 --> 00:09:37.040
system and effectively has more tax brackets. Who said progressivity requires graduated

91
00:09:37.040 --> 00:09:44.000
tax rates? Under the Forbes plan, a family of four would pay no federal income tax on

92
00:09:44.000 --> 00:09:49.300
on its first $46,165 of income.

93
00:09:49.300 --> 00:09:57.460
A family of six would owe nothing until its income exceeded $65,930.

94
00:09:57.460 --> 00:10:04.420
And those figures are sure to have increased since they were first proposed back in 2005.

95
00:10:04.420 --> 00:10:10.560
But not only would many families pay no income tax, they still might get a refund anyway

96
00:10:10.560 --> 00:10:18.940
Because the Forbes plan includes a refundable child credit and earned income credit.

97
00:10:18.940 --> 00:10:27.260
If you want an example of a real flat tax, look no further than the 2.9% Medicare tax.

98
00:10:27.260 --> 00:10:34.480
Everyone pays 2.9%, split between employer and employee, on every dollar earned, no matter

99
00:10:34.480 --> 00:10:39.960
what one's marital status, number of dependents or income level.

100
00:10:39.960 --> 00:10:45.920
Now, I am in favor of neither the tax nor Medicare, but if you're looking for a genuine

101
00:10:45.920 --> 00:10:50.800
flat tax, then the Medicare tax is your tax.

102
00:10:50.800 --> 00:10:53.360
The fair tax is a consumption tax.

103
00:10:53.360 --> 00:10:58.440
It is the most radical tax reform plan bar none.

104
00:10:58.440 --> 00:11:04.120
It also has the most vocal and intolerant proponents.

105
00:11:04.120 --> 00:11:09.480
The fair tax is the brainchild of three businessmen concerned about the crippling effects on the

106
00:11:09.480 --> 00:11:13.440
and the economy of the current federal tax code.

107
00:11:13.440 --> 00:11:18.880
After adopting the name Fair Tax for their tax reform plan, they formed Americans for

108
00:11:18.880 --> 00:11:27.180
Fair Taxation in 1997 and enlisted Representative John Linder to introduce fair tax legislation

109
00:11:27.180 --> 00:11:28.920
in Congress.

110
00:11:28.920 --> 00:11:35.680
Linder first proposed the Fair Tax Act in the House in July of 1999 and has reintroduced

111
00:11:35.680 --> 00:11:42.060
a Fair Tax Bill at the beginning of every term of Congress since then, including the

112
00:11:42.060 --> 00:11:45.000
current term of Congress.

113
00:11:45.000 --> 00:11:49.760
Although Linder's Fair Tax Bill languishes in the House Committee on Ways and Means every

114
00:11:49.760 --> 00:11:56.980
time it's introduced, it always has a number of co-sponsors, including Tom Tancredo and

115
00:11:56.980 --> 00:12:03.800
Duncan Hunter, but not Ron Paul, the acknowledged taxpayer's best friend.

116
00:12:03.800 --> 00:12:09.800
It also has its share of supporters outside of Congress, including Mike Huckabee and Neil

117
00:12:09.800 --> 00:12:11.600
Bortz.

118
00:12:11.600 --> 00:12:18.600
The latter is author, with Congressman Linder, of the Fair Tax book, published in 2005.

119
00:12:18.600 --> 00:12:25.000
A paperback version of the Fair Tax book was issued in 2006, with some notable changes

120
00:12:25.000 --> 00:12:30.360
to correct false statements made in the original hardcover release.

121
00:12:30.360 --> 00:12:36.920
Roberts and Linder also published a sequel, Fair Tax the Truth, Answering the Critics,

122
00:12:36.920 --> 00:12:39.880
and that was published just last year.

123
00:12:39.880 --> 00:12:47.920
And I should add, it does mention the Mises Institute in there as a horrible place that

124
00:12:47.920 --> 00:12:52.600
dared to publish articles against the fair tax.

125
00:12:52.600 --> 00:12:56.240
I am getting weary of writing about the fair tax.

126
00:12:56.240 --> 00:13:01.160
Every time I think I've written my last article on the subject, some new opportunity presents

127
00:13:01.160 --> 00:13:06.720
itself and I take the bait, as I'm doing right now.

128
00:13:06.720 --> 00:13:10.520
I don't consider myself to be an expert on the fair tax.

129
00:13:10.520 --> 00:13:15.080
Although the idea of the fair tax has been around since 1997, I had never even heard

130
00:13:15.080 --> 00:13:22.680
of it until I wrote an article for the Mises Institute in 2005 on the evils of the withholding

131
00:13:22.680 --> 00:13:24.320
tax.

132
00:13:24.320 --> 00:13:30.640
It was only after my inbox was bombarded with mail from fare taxers trying to sell me on

133
00:13:30.640 --> 00:13:34.220
the fare tax that I actually looked into it.

134
00:13:34.220 --> 00:13:39.000
If you have read any of my articles on the subject, on the Mises website, you know that

135
00:13:39.000 --> 00:13:42.120
I didn't like what I saw.

136
00:13:42.120 --> 00:13:49.120
The fare tax is a national retail sales tax of 30% on the final sale of all new goods

137
00:13:49.120 --> 00:13:50.920
and services.

138
00:13:50.920 --> 00:14:02.160
All new goods from cars and houses to prescription drugs and food. All services from heart operations

139
00:14:02.160 --> 00:14:10.320
and funerals to rent and haircuts. Because it would replace the personal income tax,

140
00:14:10.320 --> 00:14:16.600
there would also no longer be withholding tax, capital gains tax, the alternative minimum

141
00:14:16.600 --> 00:14:22.960
Tax, or taxes on interest and dividends. Even your gambling winnings would no longer be

142
00:14:22.960 --> 00:14:28.980
taxed under the fare tax. Of course, there would be no tax deductions either. The fare

143
00:14:28.980 --> 00:14:35.300
tax would likewise eliminate corporate income tax, estate tax, gift tax, unemployment tax,

144
00:14:35.300 --> 00:14:42.300
social security tax, and Medicare tax. The appeal is obvious. No more tax code. No more

145
00:14:42.300 --> 00:15:02.300
No more taxes withheld from paychecks, no more 1040 forms, no more record keeping, no more compliance costs, no more IRS audits, and if that weren't enough, the fare tax also includes a monthly rebate to offset the taxes paid on basic necessities.

146
00:15:02.300 --> 00:15:10.300
But for a plan that promises such a utopia, the problems with the fare tax are legion.

147
00:15:10.300 --> 00:15:18.260
The stated rate of the fare tax is too low to achieve the promised revenue neutrality.

148
00:15:18.260 --> 00:15:23.820
The amount by which it is claimed prices would fall under a fare tax system has been grossly

149
00:15:23.820 --> 00:15:26.060
exaggerated.

150
00:15:26.060 --> 00:15:31.220
There is nothing to prevent an income tax from being reinstituted, giving us a two-headed

151
00:15:31.220 --> 00:15:35.900
hydra of an income tax and a consumption tax.

152
00:15:35.900 --> 00:15:41.020
Not only would state and local governments have to pay a national sales tax to the federal

153
00:15:41.020 --> 00:15:42.620
government.

154
00:15:42.620 --> 00:15:49.020
The federal government would have to pay sales taxes to itself on all its new purchases.

155
00:15:49.020 --> 00:15:54.300
I don't know what the amount would be, but what do you suppose the amount of fare tax

156
00:15:54.300 --> 00:15:59.500
would be on a B-1 bomber or a nuclear submarine?

157
00:15:59.500 --> 00:16:04.220
Since I've already written extensively about the problems with the fare tax, I will stop

158
00:16:04.220 --> 00:16:11.220
Let's stop with its problems here and focus on why the fair tax, like the flat tax, is

159
00:16:11.220 --> 00:16:13.780
not true to its name.

160
00:16:13.780 --> 00:16:16.140
So why is the fair tax not fair?

161
00:16:16.140 --> 00:16:20.460
Well, first of all, what's fair about a consumption tax?

162
00:16:20.460 --> 00:16:25.180
Why is it that people who rightly criticize the income tax are so quick to accept the

163
00:16:25.180 --> 00:16:28.540
national sales tax on consumption?

164
00:16:28.540 --> 00:16:34.340
The Fair Tax perpetuates the fallacy that the government has a right to confiscate a

165
00:16:34.340 --> 00:16:40.380
percentage of the value of each new good sold and every service rendered.

166
00:16:40.380 --> 00:16:44.440
This is no different than claiming that the government has a right to the portion of each

167
00:16:44.440 --> 00:16:46.540
American's income.

168
00:16:46.540 --> 00:16:52.580
As Murray Rothbard explained, the consumption tax, on the other hand, can only be regarded

169
00:16:52.580 --> 00:16:56.220
as a payment for permission to live.

170
00:16:56.220 --> 00:17:01.940
It implies that a man will not be allowed to advance or even sustain his own life unless

171
00:17:01.940 --> 00:17:07.720
he pays off the top a fee to the state for permission to do so.

172
00:17:07.720 --> 00:17:13.860
The consumption tax does not strike me in its philosophical implications as one-wit

173
00:17:13.860 --> 00:17:17.980
more noble or less presumptuous than the income tax.

174
00:17:17.980 --> 00:17:23.180
Now, the fair tax is also not fair because of the rate.

175
00:17:23.180 --> 00:17:28.020
What is fair about the government taking a 30% cut on every transaction?

176
00:17:28.020 --> 00:17:36.020
I know the fair taxors claim the rate is only 23%, but when I buy an item for a dollar and

177
00:17:36.020 --> 00:17:42.260
I end up paying $1.30, the basic math I learned in elementary school tells me that I paid

178
00:17:42.260 --> 00:17:45.540
a tax rate of 30%.

179
00:17:45.540 --> 00:17:51.620
But regardless of whether the rate is 23 or 30%, why should the bloated, pork-laden leviathan

180
00:17:51.620 --> 00:17:57.060
and we call the federal government get anywhere near this much of our income.

181
00:17:57.060 --> 00:18:05.200
And finally, maintaining that the fair tax is a fair tax system or one that is fairer

182
00:18:05.200 --> 00:18:09.140
than our current system is highly subjective.

183
00:18:09.140 --> 00:18:14.940
Neil Bortz himself even acknowledges this in his newest book on the fair tax, quote,

184
00:18:14.940 --> 00:18:21.540
Whether a tax system is fair is a complicated economic and philosophical question, one that

185
00:18:21.540 --> 00:18:27.140
inevitably involves oversimplification and subjective judgment.

186
00:18:27.140 --> 00:18:32.980
If you want an example of a real fair tax, then consider the equal tax.

187
00:18:32.980 --> 00:18:36.620
I first saw this proposed by Joe Sobram.

188
00:18:36.620 --> 00:18:42.700
Let every American pay the same amount, no deductions, no exemptions, no exceptions.

189
00:18:42.700 --> 00:18:45.180
Sobern Reasons

190
00:18:45.180 --> 00:18:49.420
The billionaire doesn't use the police or the streets any more than the pauper, maybe

191
00:18:49.420 --> 00:18:55.820
less, since he presumably hires private guards to protect him and has less need of the police

192
00:18:55.820 --> 00:19:00.260
and he is less likely to drive long distances than to fly.

193
00:19:00.260 --> 00:19:06.340
Now I wouldn't like paying an equal tax any more than I would like paying an income tax,

194
00:19:06.340 --> 00:19:09.860
but it is certainly a fair tax.

195
00:19:09.860 --> 00:19:17.540
But not only is the flat tax not flat and the fair tax not fair, the flat tax is not

196
00:19:17.540 --> 00:19:21.460
fair and the fair tax is not flat.

197
00:19:21.460 --> 00:19:23.460
I better repeat that.

198
00:19:23.460 --> 00:19:30.060
Not only is the flat tax not flat and the fair tax not fair, the flat tax is not fair

199
00:19:30.060 --> 00:19:33.780
and the fair tax is not flat.

200
00:19:33.780 --> 00:19:41.060
According to Hall and Ryabushka, the flat tax system they propose is both fair and progressive.

201
00:19:41.060 --> 00:19:46.980
The poor pay no tax, and the amount that a family pays rises with income.

202
00:19:46.980 --> 00:19:52.660
They say their flat tax is fair because it is based on the principle that income should

203
00:19:52.660 --> 00:19:57.980
be taxed exactly once as close as possible to its source.

204
00:19:57.980 --> 00:20:04.840
But how can a system that punishes success and fosters class envy be considered fair?

205
00:20:04.840 --> 00:20:10.120
And why should it be considered fair that income is taxed exactly once as close as possible

206
00:20:10.120 --> 00:20:12.220
to its source?

207
00:20:12.220 --> 00:20:17.620
Just because every American would pay the same rate under the flat tax doesn't necessarily

208
00:20:17.620 --> 00:20:20.340
make it a fair tax.

209
00:20:20.340 --> 00:20:26.600
Making the tax code less progressive is not enough, as Rothbard again explains.

210
00:20:26.600 --> 00:20:32.960
The flat tax movement is part of a process by which the government and its allies have

211
00:20:32.960 --> 00:20:39.020
been able to split and deflect the tax protest movement from trying to lower the taxes of

212
00:20:39.020 --> 00:20:45.920
everyone into trying to force everyone into paying some arbitrarily defined fair share.

213
00:20:45.920 --> 00:20:50.640
It is no consolation to a wealthy person who is stripped of his money by the federal government

214
00:20:50.640 --> 00:20:56.560
that a poor person is likewise relieved of his money by the same percentage.

215
00:20:56.560 --> 00:21:01.520
One of the reasons fair tax supporters claim that their tax is fair is that it has a flat

216
00:21:01.520 --> 00:21:05.040
rate that everyone would pay.

217
00:21:05.040 --> 00:21:08.840
But the fair tax is about as flat as it is fair.

218
00:21:08.840 --> 00:21:13.620
I already mentioned that the fair tax includes a monthly rebate to offset the taxes paid

219
00:21:13.620 --> 00:21:15.800
on basic necessities.

220
00:21:15.800 --> 00:21:22.000
This so-called pre-bait is based on the government poverty level and family size. Thus, although

221
00:21:22.000 --> 00:21:27.160
everyone would pay the same rate under the fair tax, the end result would be that some

222
00:21:27.160 --> 00:21:33.000
Americans would pay no taxes at all, some would have most of their taxes offset, and

223
00:21:33.000 --> 00:21:39.480
some would get more money back than they actually paid in taxes. This makes the fair tax an

224
00:21:39.480 --> 00:21:45.760
An Income Redistribution Scheme Under the Guise of Tax Reform

225
00:21:45.760 --> 00:21:52.000
Neither the flat tax nor the fair tax is a step toward the libertarian goal of substantially

226
00:21:52.000 --> 00:21:55.840
reducing or abolishing the income tax.

227
00:21:55.840 --> 00:22:00.960
Neither tax reform plan is an incremental step toward lower overall taxes.

228
00:22:00.960 --> 00:22:07.320
They could be, however, if their promoters recognize that the problem is taxation itself,

229
00:22:07.320 --> 00:22:13.400
not the tax code. All they have done is shift the debate from how much of the wealth of

230
00:22:13.400 --> 00:22:19.200
the American people the federal government confiscates to the manner in which this wealth

231
00:22:19.200 --> 00:22:24.820
is confiscated. We don't need compassionate tax reform that makes people feel better about

232
00:22:24.820 --> 00:22:31.940
paying their taxes. We need radical tax reform that reduces, cuts, eliminates and abolishes

233
00:22:31.940 --> 00:22:38.940
With the federal budget fast approaching $4 trillion, I can't think of anything that is more of a waste of time than quibbling about how the government can make the tax rates flatter or fairer, while it robs us of trillions of dollars.

234
00:23:01.940 --> 00:23:10.180
dollars. The only fair tax is a tax low enough to flatten skyrocketing congressional spending.

235
00:23:10.180 --> 00:23:16.300
Like educational vouchers and the privatization of Social Security, the flat tax and the fair

236
00:23:16.300 --> 00:23:21.300
tax are gimmicks that libertarians should avoid. Thank you.