Nick, study up

In a recent TED Talk (listen here TED’s ‘Explicitly Partisan’ Talk, Briefly Barred From Its Site, Now Everywhere) Nick Hanauer presented an “idea he thought was worth spreading — that rich people like him should be paying more in taxes.”

If you agree with Nick, then great.  But if you are rich and you don’t agree with Nick, well you have lots of other options in a global society.  You can move your business and jobs and wealth more freely now than ever before in the history of the world.  If you consider the decisions that are made today by the people and companies who can best afford to enact tax avoidance strategies, you will find that it’s not as simple as just taxing rich people more.  Nick may have identified a problem but is woefully short on “solution”.

Personally I would like to hear Nick give his next Ted talk on explaining why the FairTax is the answer.  The FairTax is a progressive tax, where the poor pay no tax and it actually taxes wealth not just income.  The FairTax expands the tax base to non-US citizens who visit (legally or illegally).  The FairTax closes loopholes, diminishing lobbyist influence.  It improves our competitiveness in the world by removing embedded taxes in the costs of products “made inAmerica” that we export.  It would bring trillions of dollars in capital currently held off shore due to our current tax system.  The FairTax would provide consumers with their entire paycheck (not a paycheck after deductions) fueling the spending life cycle Nick says is the key driver to job creation.

We already have the highest corporate tax in the world.  And it’s hurting, not helping.  This imple mindedness of “tax the rich” may make for great headlines but that’s it.  You can certainly continue to add pages to the tax code, which happens today at more than a change per day so not even the experts on tax law can keep up – providing the political class their power and K street their wealth.  But what have you solved?

Bottom line: if we were to scrap the tax code and start from scratch to develop a smart and elegant solution to tax ourselves today – it wouldn’t include a tax on income and would look a lot like the current FairTax Act H.R. 25 (the most researched piece of legislation on capital hill today).  Nick, study up.

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