Tuesday, April 17, 2007

Finally a Fair Tax!

Maybe it's not all it's cracked up to be but folks over at fairtax.org have what looks to me like a long overdue fix to our horrible tax system. Their premise is that it would be far easier (simpler to define, simpler to run, simpler to monitor) to tax consumption rather than income. In other words, have a federal sales tax replace the federal income tax.

To me this has the following advantages:

  • No more filing tax returns (except for those states that have income tax).

  • No more taxes on savings. The more you save, the less taxes you pay.

  • The tax base is expanded from those who have legal work to everybody that buys stuff. This includes illegals, tourists, etc. Basically anybody who buys stuff in the US.

  • Makes the US more business friendly. No more worrying about corporate income tax. No need to incorporate offshore to avoid taxes.

  • Lower prices. The current income tax is built into the prices of our products. If you buy an apple, the price includes income tax for the worker that picked the apple, the farmer, the people transporting the apple, the grocery store, and the grocery store employees. The income tax already touches everything we purchase; the fair tax just makes it more transparent.

  • It's simple. One flat tax rate for everything. No complex system requiring an army of lawyers and accountants to understand. Plus it would end the IRS as we know it and save the government billions (I think the US spends $300 billion per year to run the IRS).

  • On top of all that, there will also be a monthly prebate of spending up to the poverty level. This way the tax is not a burden on the poor.

I think it's a great idea and, until somebody shows me how it wouldn't work, I think it would help the country immensely.

What do you think?

Global Warming?

Global warming has become quite an issue lately. Temperatures are rising but that seems to be just about all anybody can prove. There are so many slogans and sound bites on global warming that it's hard to tell what's really going on. Well, here's my opinion:

The problem with global warming is that it is a very complex issue that too many people are trying to oversimplify (including Al Gore). The real "inconvenient truth" is that we simply don't know enough to make some of the judgements that are being made.

Is global warming happening? Yes. I doubt you'll really find anyone knowledgable on the subject that doesn't think it's happening. That's the easy question.

Are humans causing it? Nobody really knows. There is some evidence that human activity plays a part in it. However, the data doesn't show the extent. Are we causing 90% of global warming or 1%. We simply don't know. There isn't enough data.

Is catastrophic climate change on the horizon? Again, we don't know. The complex climate models that everybody seems to think are accurate predictors aren't. The fact is that these climate predictors can't take 1990 data and accurately predict 2000 weather/climate. Yet everybody seems to trust that it's accurate at predicting the climate for 2050. Once again, we need more accurate information.

The real problem with global warming is that we really don't know anything concrete apart from the fact that it's happening. In 1975, Newsweek published an article that claimed global COOLING was going to cause all sorts of environmental disasters. I guess that scare was short lived.

My personal opinion is that the pollutants/greenhouse gases that we are pumping into the atmosphere are, at best, a health hazard to all those living in large cities (asthma, respiratory infections, shorter lifespans, etc) and at worst, an enviromental disaster. So whether or not we're causing global warming will probably always be up for debate but whether or not we should clean up our emissions should not be. I'm all for cleaning up our air. If we do it because of "global warming" then great, if we do for the health of our children then great. It's a win win situation.