Posted: October 16th, 2011 by Militant Libertarian
Recently, Herman Cain brought up a proposal to implement a flat tax on corporate and individual earnings, coupled with a flat 9% sales tax which would go to the IRS. This is a re-hashing of previous similar proposals, most often referred to as the “Fair Tax”, which propose anywhere between 9% and 30% in national sales taxes which would be collected by the federal government, with the higher-dollar sales taxes generally proposed as a replacement for the income tax and with the smaller amounts as a supplement to it – as Cain proposes. So what is the fair tax?
The Fair Tax is a huge bailout scheme to funnel more money away from the poor to the bankers: the tiny ruling-class of elites who get their way pretty routinely from the US government. Which is just why this thing may end up being implemented at some point within the next few years. In order to understand the fair tax, however, and how it enriches the bankers at the expense of everyone else, we have to consider how people spend money today. All too often, even with small purchases, people take out loans from a bank in order to pay for what they buy. This can come in the form of swiping a credit card at the checkout lane, or in the form of a loan contract for the purchase of, say, a car or even something as large as a house. With such purchases, most states charge a state sales tax: anywhere from 5% – 10% depending on what state you’re making the purchase in. That amount gets financed right along with the base price.
Lets consider a $10,000 car. If you have a state sales tax of 5% attached, that becomes $10,500. Attach Cain’s 9% national sales tax, and that becomes $11,400. Instead of financing $10,000, the person making the purchase just financed $11,400. They’re not just stuck paying the principle of that sales tax – the $1,400 – but rather, the interest on it as well. Of course, most purchases don’t amount to $10,000 in one transaction. Rather, the interest on the credit cards used to buy food, diapers, furniture, and other random needs at mega chains, grocery stores, and anywhere else, will add up to far more in the pockets of the banking industry overlords. In this way, the Fair Tax, or any other proposal creating a national sales tax, places an even greater burden on the poor and middle classes in the US. It redistributes their wealth to the bankers. Wealth redistribution is what the government does best, after all, but it never redistributed wealth from the top to the bottom; rather, it always redistributed wealth from the bottom to the top, as the top make up its benefactors.