The good:
The Fair Tax is a national retail sales tax that replaces our progressive tax system. Current income tax is collected (at the point of a gun) at a rate of approximately 23 percent of net income. The Fair Tax would totally eliminate withholding and individuals would only be taxed when they purchase goods and services at the retail level. The tax would be 23 percent to replace the current amount needed to fund the government, both local and federal. Imagine if you will: you get 100 percent of your paycheck and you are only taxed if you make a purchase at the retail level! Sound too good to be true? If you are a politician you will hate this form of taxation, because you would no longer be able to use taxes as a hot button issue during your campaign. Politicians will no longer be able to scare people or lie about what they will and won’t do about taxes. It takes the power away from them and puts it directly into the hands of the people, wherein lies the problem with ever getting it passed. The 16th Amendment would have to be repealed to ensure that the 23 percent sales tax could NEVER be added to the current 23 percent tax rate, causing the tax rate to be 46 percent! That is what they pay in Canada, by the way. The best part about this tax is the fact that it is “embedded”, which means that if something costs $1.00 you will not be charged $1.23 as the critics would have you believe; you will be charged $1.00 and 23 cents will go to the Federal Government. Again… too good to be true? Trying to get an amendment passed by Congress that takes so much power away from Congress is a tall order.

The bad:
The Flat Tax, as written by Steve Forbes, taxes Americans at the same rate no matter income level. It does not punish success like the current progressive system because it increases by percentage and not by rate of income. Currently the top 10 percent of wage earners (those that make $300,000 or more) pay 40 percent of the taxes. Liberals think that’s great, but have you ever gotten a job from a poor person? Those “top” wage earners are the same people that often supply the jobs! If the government keeps punishing these people at this rate there will be no jobs left in the private sector, leaving only government as a means of employment. The main draw back to the Flat Tax is the need for the IRS because the withholding standards of collections remain the same and unlike the Fair Tax, it does not call for the repeal of the 16th Amendment, making it easier for Congress to increase the percentage with the swipe of a pen.

The ugly:
Last but not least is the “VAT,” or Value Added Tax. This has been a liberal idea for years and rumor has it this will be President Obama’s next big idea to pay for his ridiculous healthcare plan and to make up for the fact that the Fed has been printing money like crazy (which started under Bush) to artificially keep the economy afloat for the last two years. The fact that all this “extra” money is not helping the economy and that Liberals have never met a spending bill or tax they didn’t like, the VAT seems like the most likely next step for the current administration. In a nut shell, the VAT doubles the tax of goods and services by adding a tax to every stage of development of a product. This puts a strain on manufacturers at the wholesale level as well as the retail level. These added taxes are then passed off to us, the consumer, to make up for corporate losses due to the excess taxes. These added funds go directly to the Federal Government… period. Obama knows that adding more to withholding will not work so his argument will be that rich corporations will be forced to pay “their fair share” of taxes. What I’m waiting to hear is his rebuttal to the fact that one of his campaign promises was that no household making less than $250,000 a year would see any additional taxes. Oh, I forgot… he will just blame George Bush!