We, the people of Michigan, are alarmed, and we have taken to the streets because of what we sense is the loss of proper respect and service by those we’ve sent to Lansing (and Washington) to represent US! However, unless our Michigan Tea Parties can channel energy into a vehicle of concrete action, the past century has shown us that we’re likely to continue to proceed down the path to less freedom, fewer liberties, less economic opportunity, more taxes, and larger government!
Michigan Tea Party participants have an opportunity to unite around the dismantling of the income tax tyranny. It is the vehicle of concrete action that will restore much of the power and accountability we’ve lost to those who, despite having been sworn to uphold the Constitution, have put we, the People, last. More than two centuries ago, our fore-fathers took action in Boston Harbor alleging “taxation without representation.” Today, in Michigan , we must take action against “taxation with mis-representation.” By “following the money,” as action participants to enact the Michigan FairTax, we concerned citizens will demonstrate a modus certain to remove the primary locus of political power and abuse – income tax policy!
By wedding the Michigan FairTax plan with the energy of the rising patriot movement, we have an extraordinary “window of opportunity” to effect change. Within our hands, we can reverse a situation in which we have become “working servant” to our politician “masters” who both set, and confiscate, the “first fruits” from our paychecks every working hour (as seen on our paystub every two weeks). They then require us to file income tax returns and divulge the totality of our personal financial information (violating our 5th Amendment right) in order that they can determine how much of our own money we can keep! They have saddled us with a complicated tax code that they continually grow, and on account of which deficiencies become more frequent. This provides them yet additional opportunity to tax us more via collection fees, interest and penalties. Indeed, to ultimately enforce powers granted under the income tax code, they may help themselves to our substance by presentments of levies and liens, abrogating our 4th Amendment right to be secure in our “persons, houses, papers, and effects.”
The Michigan FairTax is multi-dimensional in what it accomplishes. From the perspective of freedom and liberty, it returns control of the family purse to the family. Economically, it eliminates much mischief by politicians because it removes the income tax code, the gaming of which results in tax favors to the few at expense to the many. The non-uniform, selective nature of the tax code results in market distortions. If ignored by us, our state, and national, economy will fold in on itself as each so-called fix creates yet more distortions.
In terms of economic viability, the Michigan FairTax is more viable than the current income tax system. It is simpler, and uniformly applied. It bases taxation on consumption, rather than income. Under a state FairTax regime, paying taxes will be less taxing (pun intended) on all of us, for a number of solid reasons:
• A consumption basis, upon which to establish a tax rate, is less volatile than is income. Thus, there will be less severe revenue swings by basing taxes on how much we consume, rather than how much we earn.
• The Michigan FairTax (sales tax) rate of 9.75% would replace several current taxes: the current 6% sales tax; personal income tax, Personal Property tax (on equipment / furnishings) and the 6 mill state education tax, both levied on business; and the business income and payroll tax.
• The tax is paid by consumers, when they purchase new goods and services, at retail – “at the cash register!” Thus, no more income tax returns to file for the average Michigan wage-earning family.
• In addition to the end of state tax-withholding from workers wages, all legal resident Michigan families would receive an advance monthly rebate (called a “prebate”), at the beginning of each month – an advance tax rebate to apply against taxable essentials in that month.
• The prebate amount is based on family size. For example, a Michigan family comprised of a single adult would receive $85 per month. This equals 9.75% of $867 in monthly spending (below which one is said to live “in poverty”). A single person could spend up to $10,400 a year and, by virtue of the prebate, have net tax expense of $ -0-. Likewise, a family of four would receive a monthly prebate of $172 per month, and could spend $21,400 a year before any tax would start being paid.
• No “income tax code” necessary. The prebate replaces “credits, deductions, exemptions, etc.” with a simple advance rebate. Every Michigan citizen is treated the same.
Next, the Michigan FairTax goes a long way toward cleaning up a corruption-prone income tax system:
• We expect that as many as half the lobbyists in Lansing will be forced to seek more productive employment, as the Michigan FairTax will do away with “special tax treatment” for the few, at expense to the many.
• Politicians will no longer be able to tell constituents that they’re “taxing business,” while, in fact, consumers end up paying for business’s compliance and other tax costs in the form of higher prices.
• Without coercive power to administer a tax code, our politicians will no longer be able to pit “poor against rich” and employer against employee, because the more you spend, the greater will be your share of the tax burden. But no one will even start paying until they exceed the poverty level. Thereafter effective (post-prebate) tax rates on spending will begin to climb from -0- toward 9.75% at the highest spending levels. Wealth will no longer find shelter in tax attorneys, or off-shore accounts.
Business returns to Michigan under the FairTax:
• With the elimination of the corporate income and payroll tax, businesses will find tax compliance infinitely less complicated and less expensive.
• Michigan will become the focal point for both foreign and domestic business creation.
• Capital will become more available, because earnings on capital will not be taxed. More capital, means greater access to funds by business.
• More businesses, create more jobs, which will keep a positive pressure on wages due to demand for workers to fill more positions.
• As the economic pie grows, pressure will be downward on the MI FairTax rate to the extent that newly-empowered workers focus on the legislature’s spending. That will be possible because politicians will no longer be able to utilize the “divide and conquer” strategy they currently use to pit social classes against each other, and worker against business – all while they continue to spend away!
• Taxing consumption doesn’t penalize a business for creating jobs. Under the current income tax system, a business’s employment tax liabilities increase with every job it creates.
FairTax restores freedom and liberty to those who produce the state’s wealth!
• No more compulsory filing of tax returns on the government’s time table.
• No longer are average working persons required to be “unpaid accountants,” having to keep receipts, and even pay for accounting services.
• No more threats of audit, interest and penalties, etc. Under FairTax, we just “pay it at the cash register.”
• By paying the tax at retail, we’ll understand the true cost of our government. Under the current corporate income and payroll tax system, we end up paying business’s taxes in higher consumer prices.
• We pay the tax, when we decide to purchase something new, or pay for a service.
• Government will no longer be able to lay claim to our wages, and take theirs first through paycheck withholding. Under FairTax, the government benefits only as we and/or our families benefit by a new purchase. Under the current system, money withheld from paychecks is often compensated for by the use of expensive credit cards. Wealth-creation is easier under FairTax, because we have more control over how we spend and save our money, and how and when we pay the tax.
The Michigan FairTax realigns the power dynamics between us and those whom we elect to public office. Under the Michigan FairTax, our politicians will once again work for us – and they will not have access into our personal financial matters. Politicians will also more directly feel the result of legislation that impinges upon the productive sector, for its revenues will more directly bear on the productive health of the economy as measured in sales.
The only ones who will be unhappy with the Michigan FairTax are the politicians, lobbyists, and special interests who thrive off of taxpayer dollars to both effect the ends they seek, and finance their lobbyists who make it possible to do so.
As we work together to educate our fellow Michiganders, they’ll awaken to realize how the income tax has eroded our freedoms, and how it has been a major contributor to our state’s economic decline.
The Michigan FairTax is the key prescription to restoring our dignity and freedom, while bringing companies, jobs, and families back to our truly beautiful state.
You're doing extraordinary work! Let's do it together! We can mobilize this effort in an extraordinary way. We've got the plan, and plenty of leadership positions are available. All we need are willing souls, and everyone donating a just a few dollars every month.