As I was wandering through the library the other day, I noticed a second book on the proposed FairTax that had the subtitle “Answering the Critics” so I figured I’d give it a read. Overall, the first section of the book was a remix of the first one and the second deals with specific objections. While many of these were answered with further rehashing, there were several points that I found significant. Were they enough to justify a new book? I’ll withhold my judgment because the same question will probably be asked of this post.
(Here comes the obligatory recap of FairTax for people who haven’t heard of it before…wait for it…)
FairTax basically proposes to eliminate all forms of federal taxation in favor of a single, 23% inclusive sales tax on all new goods AND services sold in the United States. The new plan would replace all existing taxes – not just income taxes, but payroll, social security, Medicare, capital gains, corporate, etc. and replace it just with just one. It also includes a “prebate,” or a check issues at the beginning of each month to each household to as a refund for the sales tax it will incur on purchases up to the poverty level. After reading the first book, two of my concerns about the FairTax were that sales taxes might not be stable enough support the government on a yearly basis because of fluctuations in purchases and that this tax break, even with the prebate – would primary benefit the rich at the expense of the poor.
First, the simpler one to answer. If you compare a graph of the quarterly percent change in state tax revenues from 1995-2007, the sales tax is clearly the more stable option. You can take my word or look on page 129 of the book. And this tax will better reflect the current makeup of our economy. When taxes were first enacted, goods made up the majority of the economy. Even up to 1950, two-thirds of the economy was goods-based rather than service based . It wasn’t until after 1980 that services made up a larger percentage of personal expenditures than goods, but now services account for 60% of the economy. What a waste! Why should a farmer be forced to increase the price of his goods because of taxes and a lawyer not have to because she provides a service?
Now to the fear of the FairTax overburdening the poor. As mentioned earlier, part of the plan includes a prebate to refund the sales tax up to the poverty level of purchases. So if you’re living below the poverty level, all other programs aside, just from the FairTax setup, you get more money in the prebate than you spend on sales tax.
If asked if the taxes system in the US today was progressive, just about everyone I know would say yes. And while it is true the income tax is clearly progressive, there are many other less well known taxes, and even parts of the income tax, that are not progressive, and potentially even regressive in nature. Most people would agree that the rich pay a larger percentage of taxes on their income than the middle class or lower class. However, many of the wealthiest escape the high income tax bracket because they earn most of their income from investments, which are taxed as capital gains at 15%. Don’t believe me? Ask Warren Buffett. In a speech given in 2007, he claimed he paid 17.7 percent of his income in taxes while his receptionist paid thirty percent! And that’s just based income tax.
Just based on income tax? Isn’t that the only major tax individuals are responsible for? If you think taxes are paid only on April 15th, then yes, that’s all. But imbedded in the cost of paying an employee are a number of other taxes. An employer doesn’t just look at the salary they pay an employee to determine how much that employee costs the company – there are payroll taxes, medicare, and social security taxes the company has to match as well – not to mention benefits. So while you might take home $30,000 – well, you would take it all home under FairTax – but you current only get whatever’s left after the government takes out its withholding.
Look at the social security tax. Supposedly its split evenly between wage earners and the company. Because of that extra approximately seven percent, you’re cost to the company to employ just jumped $2100. You might not realize it, but the company certainly does. The social security tax also has a cap so it only applies to the first $100,000 or so that you make. So for someone making $150,000, they pay the same in social security tax as someone making $100,000, which drops their effective tax rate. Sounds regressive to me. Take for example the payroll tax. It’s a flat rate for all wage earners, not a progressive rate, and the wealth who earn their incomes from investments don’t have to pay it.
With over 16,000 amendments to the tax code since 1986, who has time to read them all much less know which ones apply to them and how to take full advantage of them? People who get paid to do it (read: tax advisers). While I have nothing against tax advisers charging money for their services, they do, after all, put in long hours to understand and find niches and loopholes to save their clients money, the information they glean isn’t free to the general public. Who has the money to pay them? And who has the most to gain by legally exploiting the tax code? The people with the most money who pay the most in taxes! Even if a poorer person goes to a tax adviser and finds a way to save 20% on their $1500 tax bill, it would take one hundred of those people to make up for the wealthy person who is shown a way to save 5% on a $600,000 tax bill. Clearly, the more complex the tax code, the more it favors those with a bigger bill.
The FairTax proposal offers a simpler solution to the complex tax code. Is it perfect? Of course not. But it would be a whole lot better than what we’ve got today.
Friday, April 24, 2009
Thursday, April 9, 2009
Innocent Until Executed
Benjamin Franklin is supposed to have said that he would rather see one hundred guilty men go free than one innocent man suffer punishment. While I’m not quite sure that I would rather have one hundred serial killers roaming the streets than one innocent man behind bar, I can say for certain that I would rather have one hundred people convicted of first degree murder serving life sentences without the possibility of parole than one innocent man executed for a crime he didn’t commit. But what are the chances of that happening to someone today?
After reading The Innocent Man, by John Grisham, my first thoughts were “Of course these men are innocent. How did these juries not see through the lies that put forward by the prosecutors, who were obviously just desperate for a conviction?” However, the jury did not get all of the information in the book. The information juries hear is finely filtered through the evidence that is allowed to be presented, the questions the can be asked of witnesses, and the objections that can be raised. Juries are, at least in theory, a group of our peers, people with no special training in criminology, evidence, or courtroom procedure. Even those jurors who have some outside knowledge are not allowed to inquire on their own about the evidence. While a fictional tale, Twelve Angry Men presents a case in which a defendant with incompetent counsel appears guilty from the courtroom proceedings but, through the determination and expert knowledge of the jurors, is eventually found innocent. Though they were able to use their own knowledge and review exhibits entered into evidence, they could not ask for anything not entered that they felt might be relevant and could not request additional witnesses who were not called much less recall witnesses to ask them their own questions.
I am generally optimistic about others’, especially those in positions of power, ability to do the right thing, but that optimism could blind me to their abuses of power. While the implications for the defendant are deadlier than those harmed in other professions, in truth, prosecutors who continue to waste effort to prove a suspect guilty simply because they have nowhere else to turn, have invested too much time into the lead to admit it was incorrect, or even feel pressure to convict someone – anyone, even – to close the wounds for the victim or the victim’s family, are no different than the marketing executive who doubles the ad budget of an ineffective campaign, the general manager of a sports team who refuses to cut a free agent he brought in because he’s just going through a two-year long cold streak, or the lottery player who continues to buy tickets because tomorrow will be the day his luck changes. Almost everyone has, intentionally or unintentionally, overcommitted resources to a failing project. Would I like to think that if I were the prosecutor, I would have stopped the questionable investigations long before the reached the courtroom much less the guilty verdict. Certainly. But do I also understand how various pressures inherent in our judicial system make this possible? I’d have to be blind not to.
Under our laws, most people involved in criminal proceedings – including judges, prosecutors, and juries – cannot be held liable for convicting an innocent person unless they have made an egregious violation. All people, even those with the best intentions, will make mistakes. In the adversarial system we use, fairness depends on two equal sides both seeking to prevail. While in theory they both want the truth, they also are enlisted to fight for their client. In the same way even the best referee cannot cause a game between the L.A. Lakers and a middle school AAU team to be equal, the most well-versed judge cannot make up for an incompetent attorney. A jury cannot possibly be expected to have the knowledge required to determine whether “expert” witnesses are to be believed. Even a well-intentioned prosecutor can proceed with cases that indict innocent people. To allow the prosecutor to be punished for proceeding with good intentions would cripple the legal system.
Some argue that the death penalty should be abolished because it is unjust in that it is imposed on certain demographics – most often the poor or minorities – a disproportionate amount. While I agree with the ends of their argument, the means ring hollow because it confuses justice with equality. While often linked, justice and equality are not interchangeable words. Whether a punishment is just or not should be determined by comparing the crime committed and the circumstances it was committed under, with the punishment given. Only when considering whether it is equal should the punishments of others be considered. When equality becomes the determining factor of whether a punishment is “right” or “wrong,” justice becomes a sliding scale with no anchor because as simple as it would be to make all first degree murders receive life in prison without parole, it would be equally simple to assign any other punishment – whether it be the death penalty or fifty hours of community service – and as long as all convicts received that same punishment, the punishment would be equal. And fifty hours of community service for murder is clearly unjust.
Since the system is known to be imperfect, death penalty cases are automatically appealed, as they should be. When a person’s life hangs in the balance, every effort should be made to ensure the correct decision is made. However, this takes significant sums of money. Studies have found New York spends about twenty-three million for each execution actually carried out and in Maryland the figure jumps to thirty-seven million (See http://www.deathpenaltyinfo.org/costs-death-penalty for full stories and more.) Surely our government has been things to spend its money on than giving prosecutors the option to seek the death penalty. Governments estimate future prison construction based in part on illiteracy rates of elementary-aged children. What better use for those funds than to help those kids struggling so they don’t end up behind bars?
While I still think death can potentially be a just punishment for certain crimes, I do not have enough trust in the criminal justice system to administer it fairly and properly. The finality of the punishment prevents any correction of errors, and who among us is perfect?
After reading The Innocent Man, by John Grisham, my first thoughts were “Of course these men are innocent. How did these juries not see through the lies that put forward by the prosecutors, who were obviously just desperate for a conviction?” However, the jury did not get all of the information in the book. The information juries hear is finely filtered through the evidence that is allowed to be presented, the questions the can be asked of witnesses, and the objections that can be raised. Juries are, at least in theory, a group of our peers, people with no special training in criminology, evidence, or courtroom procedure. Even those jurors who have some outside knowledge are not allowed to inquire on their own about the evidence. While a fictional tale, Twelve Angry Men presents a case in which a defendant with incompetent counsel appears guilty from the courtroom proceedings but, through the determination and expert knowledge of the jurors, is eventually found innocent. Though they were able to use their own knowledge and review exhibits entered into evidence, they could not ask for anything not entered that they felt might be relevant and could not request additional witnesses who were not called much less recall witnesses to ask them their own questions.
I am generally optimistic about others’, especially those in positions of power, ability to do the right thing, but that optimism could blind me to their abuses of power. While the implications for the defendant are deadlier than those harmed in other professions, in truth, prosecutors who continue to waste effort to prove a suspect guilty simply because they have nowhere else to turn, have invested too much time into the lead to admit it was incorrect, or even feel pressure to convict someone – anyone, even – to close the wounds for the victim or the victim’s family, are no different than the marketing executive who doubles the ad budget of an ineffective campaign, the general manager of a sports team who refuses to cut a free agent he brought in because he’s just going through a two-year long cold streak, or the lottery player who continues to buy tickets because tomorrow will be the day his luck changes. Almost everyone has, intentionally or unintentionally, overcommitted resources to a failing project. Would I like to think that if I were the prosecutor, I would have stopped the questionable investigations long before the reached the courtroom much less the guilty verdict. Certainly. But do I also understand how various pressures inherent in our judicial system make this possible? I’d have to be blind not to.
Under our laws, most people involved in criminal proceedings – including judges, prosecutors, and juries – cannot be held liable for convicting an innocent person unless they have made an egregious violation. All people, even those with the best intentions, will make mistakes. In the adversarial system we use, fairness depends on two equal sides both seeking to prevail. While in theory they both want the truth, they also are enlisted to fight for their client. In the same way even the best referee cannot cause a game between the L.A. Lakers and a middle school AAU team to be equal, the most well-versed judge cannot make up for an incompetent attorney. A jury cannot possibly be expected to have the knowledge required to determine whether “expert” witnesses are to be believed. Even a well-intentioned prosecutor can proceed with cases that indict innocent people. To allow the prosecutor to be punished for proceeding with good intentions would cripple the legal system.
Some argue that the death penalty should be abolished because it is unjust in that it is imposed on certain demographics – most often the poor or minorities – a disproportionate amount. While I agree with the ends of their argument, the means ring hollow because it confuses justice with equality. While often linked, justice and equality are not interchangeable words. Whether a punishment is just or not should be determined by comparing the crime committed and the circumstances it was committed under, with the punishment given. Only when considering whether it is equal should the punishments of others be considered. When equality becomes the determining factor of whether a punishment is “right” or “wrong,” justice becomes a sliding scale with no anchor because as simple as it would be to make all first degree murders receive life in prison without parole, it would be equally simple to assign any other punishment – whether it be the death penalty or fifty hours of community service – and as long as all convicts received that same punishment, the punishment would be equal. And fifty hours of community service for murder is clearly unjust.
Since the system is known to be imperfect, death penalty cases are automatically appealed, as they should be. When a person’s life hangs in the balance, every effort should be made to ensure the correct decision is made. However, this takes significant sums of money. Studies have found New York spends about twenty-three million for each execution actually carried out and in Maryland the figure jumps to thirty-seven million (See http://www.deathpenaltyinfo.org/costs-death-penalty for full stories and more.) Surely our government has been things to spend its money on than giving prosecutors the option to seek the death penalty. Governments estimate future prison construction based in part on illiteracy rates of elementary-aged children. What better use for those funds than to help those kids struggling so they don’t end up behind bars?
While I still think death can potentially be a just punishment for certain crimes, I do not have enough trust in the criminal justice system to administer it fairly and properly. The finality of the punishment prevents any correction of errors, and who among us is perfect?
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