Tax Freedom Day & the case for the FairTax

Tax Freedom Day Presents a
Strong Case for The FairTax

John Gaver
July 20, 2009

John Gaver Do you know how much you really pay in taxes?... Really?

Most Americans don't. That's one of the reasons why the concept of Tax Freedom Day was created - to give people a way to get their heads around such a large amount. As more people come to realize just how much of their hard work goes to pay taxes, more people begin demanding lower taxes and more efficient use of the taxes that they do pay. In this regard it presents a strong case for the FairTax, since the FairTax also makes people realize how much tax they pay, every time they go to the cash register.

Tax Freedom Day is the day of the year, when the average American has earned enough, since the beginning of the year, to pay all of his taxes for that year. In actuality, most people have their taxes taken out of their pay checks, a little at a time, so most people don't realize just how much they are paying in taxes. By effectively rolling it all up into the first part of the year, it's easier to understand just how much of our work is for the government.

In 2009, Tax Freedom Day fell on April 13. What that means, is that most working Americans spend more than a quarter of their days at work each year, working for the government. Or to put it another way, since the government takes your pay for more than a quarter of your time at work, you aren't getting paid for more than a quarter of the work that you do.

Many of our modern politicians will try to convince you that working for the government, without pay, is "patriotic". But, Abraham Lincoln had another word for being forced to work without pay - "slavery". He was obviously a lot smarter than our modern politicians.

Many of our politicians try to demean the voracity of Tax Freedom Day, because it demonstrates in easy to understand terms, just how much of our work lives are spent working for the government. You see, they try to hide how much you pay, in collections that you don't see or if you do see them, that you don't feel.

You may see withholding, but you don't feel the pain of it, since you never see the money that they take. You don't even see payroll tax, which ultimately raises the price of everything that you buy, more even than the amount of the payroll tax collected. Homeowners see and feel how much they pay in property taxes, but most of those who live in apartments have the mistaken impression that they don't pay property taxes. In fact, they do pay property taxes. It's just in the form of higher rent payments, so they neither see nor feel their property tax payments.

The list of hidden taxes is long and sordid. But, it is keeping those taxes hidden, that allows the government, at all levels, to keep raising taxes to higher and ever higher levels, without significant public outcry.

That's why Tax Freedom Day makes such a good case for the FairTax. You see, the FairTax will abolish the income tax and replace it with a national retail sales tax, collected only at the final point of retail sale. Like Tax Freedom Day, the FairTax makes taxes easily understandable, since the purchaser sees that amount taken out of his every purchase and it's easy to understand exactly how much you are paying in taxes.

As long as he government has schemes like tax withholding and employment taxes, the government can easily hide most of those taxes. SInce the FairTax is collected only at the point of final retail sale, every person is reminded just how much of his hard-earned money is being taken by the government, every time he pays for a new product or service. Therefore, if Congress raises a sales tax too far, the people will see and feel it, which will lead to complaints to their elected officials. The higher Congress raises a sales tax, the more of those complaints will turn to demands and lost votes. This means that the FairTax is a self-limiting tax.

As is the case with Tax Freedom Day, the FairTax makes people aware of just how much of their hard-earned money is taken by the government. The only difference is that Tax Freedom Day represents all taxes, while the FairTax will only include the federal component. But it's a good start, especially since at least one state, Missouri, is now close to implementing their own state-level FairTax amendment.

To learn more about the FairTax and how it will improve our economy, protect your privacy and keep Congress from continuously raising out taxes, check out Americans for Fair Taxation. Check out the links below, as well, to learn about some of the problems with our current income tax, that most people never think about.

See related articles and supporting documents:

1986-2008 IRS Collections Data by Income Category
Obama agenda drives record expatriation
Tick - Tick - Tick / The Economy Bomb
Tax Freedom Day Builds Case for FairTax
US Tax Freedom Day Clock Web Widget
UK Tax Freedom Day Clock Web Widget
US Tax Freedom Day Clock
US Tax Freedom Day Clock Widget (for Mac)
UK Tax Freedom Day Clock Widget (for Mac)
The Privacy Factor
More Attacks on the Wealthy
US Taxpatriates List
2000 Statistical Yearbook of the Immigration & Naturalization Service (6.2mb PDF)
2003 World Wealth Report (Press Release)
American Citizens Residing Abroad (US Bureau of Consular Affairs)
Health Insurance Portability & Accountability Act of 1996 (26 USC 877(a)(1))
Immigration Reform and Immigrant Responsibility Act of 1996 (8 USC 1182(a)(10)(E))
Heroes Earnings Assistance & Relief Tax Act (Public Law 110-245) (8 USC 1182(a)(10)(E))
The Economic Impact of Replacing Federal Income Taxes
with a Sales Tax (CATO)
Fair Tax Act of 2011 (H.R. 25)
Americans for Fair Taxation
National Retail Sales Tax Alliance