Sesame Street’s Ernie used to drive Bert crazy with his game called Opposites. Whatever Bert said, Ernie would twist the words around. The antic would drive Bert crazy, much like Abbott and Costello’s “Who’s on First?” routine.
Politicians are playing the same game.
Think of the term “Fair Tax.”
The Berts of the world would say a tax that is fair is one that people pay proportional to their wealth. That way everyone is “hurt” a little.
But it’s the Ernies who are writing the rules of the game.
Under the Fair Tax plan proposal, a hefty sales tax on consumable items would replace all federal taxes.
A family of five that lives on $40,000 a year, for instance, might pay as much in taxes as that of Albert Pujols and his lovely family. The first baseman for the St. Louis Cardinals makes $14 million a year.
Both growing families need much the same things — food, clothing and an occasional haircut. Under the Fair Tax, all these items would be heavily taxed.
The Fair Tax would replace income, payroll, corporate and estate taxes. Proponents say it would benefit the poor. Those who make less than $15,000 would be exempt from the Fair Tax. When you’re that poor, there’s no such thing as a break.
The income tax bracket that benefits the most in the Fair Tax universe is for those who earn $200,000 and up.
So for a community like Iola, 95 percent of taxpayers would be hit hard by the tax. Only a small percentage are either desperately poor or comfortably rich.
Middle class Americans would have to pay a much, much higher proportion of their incomes on the taxed consumables, as well as taxed services such as rent, utilities, visits to the doctor — even an oil change.
Those in favor of this tax, including Rep. Jerry Moran, now candidate for U.S. Senate, say the retail sales tax would make things easier.
“The amount of money and effort people put into paying their taxes, hiring the professionals, is a tremendous burden on the economy,” Moran said.
Pooh.
Former candidate Todd Tiahrt’s reasoning was that the one-stop tax would “bring jobs back to America.”
Eight years of tax cuts for the wealthy under President George W. Bush did not result in a massive reinvestment in America. The rich do not “spread the wealth” unless forced. Rather, they sit on their nest eggs hoping they will turn into gold and then dole out gifts to their pet projects. Studies show that proportionally, the poorer you are, the more generous you are with your earnings.
Proponents say the higher sales tax would be “revenue neutral,” and offset “embedded” taxes, such as those paid to Medicare and Social Security. Unless the fair tax is accompanied by massive cuts to defense and other federal programs, the sales tax will have to quickly escalate to cover federal spending.
Baby boomers, say goodbye to that retirement; postpone that hip replacement.
In his talk before Iola Industries earlier this summer, former Gov. John Carlin said the best way to help the economy revive is to empower the middle class. Give them the tax breaks — not the wealthy — so they can purchase needed goods and services, benefiting local retailers and industries.
Now, that’s fair.
— Susan Lynn
