Fair tax proposal

Part Three

Eric Hydrick / Online Editor

Aside from being brutally unfair to individuals, our current income tax system is designed to force businesses to soak us for even more money in order to cover the cost of having a working government.

Corporate taxes may be sent in by businesses, but we're really paying them, and as they go up, so do the extra taxes we are required to pay.

The first way to look at how corporate taxes take even more money away from people is to just look at the taxes incurred along the line of creating and selling a simple retail product.

For businesses, taxes are a cost of doing business.

Therefore, the prices of that company's goods/services must include the costs of all of the taxes they incur just by making money.

Additionally, the money that businesses pay their employees must include the cost of their income taxes, Medicare taxes and Social Security taxes.

In order to afford the taxes of having people work for them, businesses must  raise their prices again to cover the cost of employing others.

In other words, every time businesses get taxed, we end up having to pay for it via higher prices.

Take something really simple, like a pizza from Domino's.

The cost of a pizza from Domino's covers a lot of taxes. For instance, Domino's must pay for their dough.

The cost of that dough must cover the income taxes for the money made by the people who make the dough, as well as the corporate income taxes paid by the company responsible for the dough.

That company that makes the dough has to buy the ingredients for that dough.

This means paying the income taxes for the workers of the companies they buy their ingredients from, as well as covering the cost of the corporate income taxes incurred by those specific companies.

Repeat this process with every ingredient and toppings Domino's offers, as well as the people who make their pizza boxes, the drinks they carry, etc., and pretty soon the cost of your pizza is paying for a lot of other crap.

According to a book written on the fair tax, Dr. Dale Jorgenson, former chair of Harvard's Economics department, concluded that 22 percent of the cost of retail goods and services ends up going to the federal government in the form of some tax or another.

Keep in mind that when you spend your money on retail goods and services, you've already paid income taxes.

That means that in addition to being taxed for making money, you're also being taxed for spending what money you have left.

While the fair tax would also tax you for spending money, it would abolish the tax on making money and it would be open and honest about taxing you for spending money.

When taxes go up for a business, the business can either take the hit on its profits in order to avoid raising prices (although a business that deliberately sabotages its own profits doesn't usually stay in business and shafts the shareholders of that business).

Another option, it can raise prices to help cover the increased cost of doing business (what usually happens and shafts that business's customers.

Lastly, they can choose to try to reduce other costs of doing business (such as laying off workers or reducing benefits, which shafts the workers of that business).

The plain and simple truth is that taxes on businesses do nothing but hurt the people who invested in that business, customers and the employees of that business.

After all of the money we pay just for the right to take home money that we rightfully earn, do we really need to be double-charged just for having money left over to spend?

It's time for a tax code that stops double-charging individuals for the cost of having a government.

We need a tax system that lets us earn and invest money without having to pay for the right, and only taxes us once, not multiple times, often in a manner where we can't see the government forcing the short end of the stick on us.

Write your representative and senators and tell them to support the fair tax now.

Contact Eric Hydrick at pendulum@elon.edu or 278-7247.