Too often in America, political parties are accused of having no new ideas, and too often that’s true. So when a political party does come forward with a genuinely game-changing initiative, they deserve our respect and appreciation for contributing meaningfully to the debate, regardless of the merits of their suggestion.
The Republican Party in the US House has come forward with, and will soon be voting on such an idea. It’s called the “Fair Tax”. So let’s have a moment of silence in honor of their efforts. Since you are probably already silently reading this article, that shouldn’t be that hard.
Now that your moment of silence has ended, silently, for most of you, we must now move on to considering just how truly bat-shit crazy this idea is.
First the name: The “Fair Tax” is “fair” in the way that pickles are dinosaurs, in other words, it has absolutely no seeming relationship at all to the way the word is usually defined. It would be like calling Lebron James the “Short Guy”. I suppose that could be appropriate depending on who else is part of the conversation. And the “Fair Tax” could be fair to lower income people compared to…for example… feeding them to hyenas. And given some of the members of the Republican congressional caucus, It’s not entirely clear that the hyena thing is off the table.
To provide a little background, income and wealth inequality in America have not been more extreme since before the New Deal. While the average family income in America is about $54,000 per year, the top 1% average income tops $1,700,000 annually. CEOs earn 342 times more than the average worker they employ.
In terms of wealth inequality, the US of A has the greatest disparity of any developed nation in the world. The top 1% owns more wealth than the bottom 60% of Americans, and in the last two years, the top 1% have accumulated 99% of all new wealth created. The share of all wealth held by the top 1 percent rose from 30% in 1989 to 42% in 2021, while the share held by the bottom 90 percent fell from 33% to 21%. That’s right. The top 1% now control double the wealth of the bottom 90%!
Put in simple terms, rich people have lots and lots of money, poor people have littles and littles of money, and the shrinking…