I wrote the following article in early 2006. Since then, we've seen some developments in the Fair Tax that need to be reported.

First, the tax rates for the Fair Tax crept up by a few points, regardless of whether it's an "inclusive" or "exclusive" tax. So now the Fair Tax looks like it would cost a lot of us more than the existing Federal Income Tax.

Next, we had a real-life experiment in how quickly the Federal government could implement the "prebate" — that monthly check that Fair Tax participants would get, to offset their basic tax burden. Remember the "economic stimulus" approved early in 2008? And how it was months before the checks started coming, and months more before most people got them? The deadline for getting that round of giveaways ended a couple of weeks ago with many checks undelivered or undeliverable.

It looks as if the task of giving all our millions of taxpayers a check every month CANNOT be achieved.

And add to the problems (I mentioned this in 2006) the inconvenient truth that most Americans cheat on their taxes. This problem will be especially visible in a depressed economy, when people are forced to do without, or to buy used goods. A full implementation of the Fair Tax would require all retailers, whether they sold new goods or used, to report sales and collect taxes.

One glimpse at ebay will show how unlikely this is to occur.

Finally, we CANNOT have two separate and unequal taxation systems in place, because only the Federal government will be able to choose which system will be used to tax any given citizen. If you have experienced the wrath of the Alternative Minimum Tax, you understand how this works.

And for the record, I unconditionally oppose the Alternative Minimum Tax and call for its immediate abolishment. I promise I will work to abolish the AMT, starting on my first day in Congress.

And now — back to 2006!

Without getting into any of the reasons why our Federal Income Tax isn't a good thing, let's all agree that whatever it is, there's way too much of it.

Like many Americans, I shell out a rather large sum every year to buy what I consider my favorite computer game — tax software.

Yes, it's true, the only way I can stand to file my Federal Income Taxes is to rationalize it's some colossally awesome computer game like Doom 7, or World of Warcraft.

Come to think of it, Form 1040 is sort of a Massive Multi-Player computer game. Except that the stakes are higher and it costs more to play.

I can't stop playing it. I'd say I was a computer game junkie, but this isn't a game and it's not something that America can just stop cold turkey. In 2003 (the most recent figures I could find without hiring a researcher) the Internal Revenue Service collected $987 billion from individual taxpayers, $696 billion in employment taxes, and $194 billion in corporate income taxes. (Reference: Answers.com)

That's an awful lot of money, and most of you will agree with me that it's not buying very much good government.

It took us almost a century to get to this point. The Sixteenth Amendment that most people cite as the original authorization for the Federal Income tax was passed by Congress in 1909 and proclaimed to be ratified by Secretary of State Philander Knox on February 25, 1913.

It's going to take us a little while to un-ratify this piece of work.

In the meantime, I support the following:

• Immediate repeal of the Alternative Minimum Tax. This tax has not been fairly nor proportionately adjusted since its enactment in 1969. Within just a few years, it is predicted to impact more than 40 million taxpayers — a far cry from the few thousand taxpayers it was intended to affect in 1969. Because its effects are capricious and unpredictable, it poses a huge tax-preparation nightmare for far too many middle-class taxpayers. And — it's a little-known secret of the Bush plan for deficit reduction to rely on the AMT to help knock down those record-breaking deficits.
• Immediate repeal of income taxes for senior citizens' incomes under $30,000 a year. One of the budget-balancing gimmicks that President Clinton gave us was to tax Social Security payments. That's just wrong. And you don't need to ask my mother about it, either. But if you did, she'd give you an earful! Email me if you'd like me to set her up with a blog page on this website.
• Immediate repeal of income taxes on unemployment compensation under $15,000 per year. Taxes on compensation that we and our employers paid taxes to get ... is just wrong. I believe this tax change came to us courtesy of President Reagan. If you've got an update on the administration that enacted this, please pass along your correction. I think it adds insult to injury to pay income tax on unemployment benefits. Naturally, some Libertarians believe that unemployment compensation is needless government entitlement. To them I say, Let's privatize the unemployment compensation INSURANCE structure. After all, UI comp is nothing more than a publicly funded insurance program. Ask yourself whether your medical insurance reimbursements ought to be taxed.

That's just for starters, and none of that is anywhere close to where we need to be. But every one of those proposals is easy for the IRS to implement and every one will deliver only a minimal decrease in revenues (remember that $987 BILLION revenue figure from individuals?) while providing vast relief in compliance cost, and delivering much-needed tax relief where it most needs to be given. For taxpayers, we will immediately earn back many hours of our own productivity. I can't speak for all of you, and I know that I over-value my own time, but every year I spend nearly $100 on tax software, between 10 and 50 hours of my time (I bill my friends $50 an hour for work as a technical writer), and about $8 to the post office for that embarrassingly fat certified letter / truckload of forms that comprises my annual 1040 filing.

You do the math. Most Americans spend nearly that much every year, or lose that much of their own productivity, just to file their taxes. If you use H&R Block, you know what I mean.

Our true up-side is, of course, in reducing Federal spending. I'll touch on some places where we can reduce spending in another section of this website. I encourage you to tell me where we can spend less. But here's a starter thought — if we can vastly simplify the taxpaying process, we can vastly reduce the money it costs for the IRS to send us forms and paperwork, and vastly reduce the payroll at the IRS. Everything we can do to reduce the scope of the IRS and the Federal Income Tax will save money for us and for the government. Those are both Good Things. And you can complain about the government all day long, but you know what? Every single thing you can do that causes the Federal government to spend less money is going to come back into your pocket. More, if you include the interest that each and every one of us pays on the national debt.

Going forward? Take a look at the Fair Tax proposal.

Up front, this looks like a horrendously expensive sales tax, but when you consider that the sum of your taxes equals close to 50% of your gross income, then a 20% sales tax may be an improvement. So keep an open mind. The Fair Tax proposal includes an interesting feature — the "Pre-bate" — that sends a monthly tax refund check to participating taxpaying households. The "Pre-bate" is a sort of refund that offsets much of the Fair Tax paid on the goods and services you buy. If you choose not to participate in the Fair Tax or the Pre-bate? No problem. Don't register, and buy everything from tax-exempt sellers, like garage sales and flea markets.

You may want to plant a "Freedom Farm" to grow your own veggies if you have any concerns about second-hand groceries. But here's a concern that a lot of voters have already raised with me.

"What about people who don't pay employment taxes to the IRS?"

Simple. Unless you're a registered taxpayer, you don't get your Pre-bate.

And if you choose to opt out, you don't get your Pre-bate.

Here in Texas, we have a state sales tax of 8.25% in addition to all the other direct, indirect, visible, and invisible taxes that add up to my overall tax burden around 50%. I'd happily take a reduction in my overall bill.

Another possible benefit of Fair Tax? The administrative processes of the Fair Tax are already duplicated in nearly every state, by way of state sales taxes. We would see a measurable increase in the administrative load of these bureaucracies, simply because the sheer volume of dollars they carried would double or triple. But their workload increase would be minimal. And the workload of the IRS would fall dramatically, to the point that to rescue IRS workers from the unemployment line, they could be reassigned to more vital tasks like teaching mathematics to public school kids.

I cannot say that the Fair Tax is the final solution. I have to demand that we need IRS reforms now, because incremental relief works immediately and we can swiftly evaluate the effects of incremental relief, and adjust our policies to improve the new things we've tried. And we can enact immediate reforms that carry the dual benefits of tax reduction, and tax COMPLIANCE reduction. It's not just the taxes we pay, it's also the time and money we expend to pay taxes, and to collect taxes. We need to save in all those places.

If you'll let me help, together we WILL save on taxes.

I ask for your vote in November.