Not just because it’s an election year but because it’s a growing concern for every American citizen, the question of the day is: How much tax would be “fair”?

We could (and do) debate passionately what services our government should provide, which hinges upon what we believe our moral responsibility is to our fellow citizens and other citizens of Planet Earth. “Am I my brother’s keeper?” Cain asked. Most God-fearing people would say yes; but even within the ranks of the faithful, we are not able to agree upon the extent to which we should look out for each other.

Moral philosophers, theologians, and politicians have sharply divided opinions about this. So does “the man on the street.” So let us set that question aside for a moment and reframe the original question:

How much tax should we pay to cover all of the goods and services that our governments now purchase on our behalf? In terms of fiscal responsibility, at least, that would be a “fair” tax.

Over the years, some Presidential candidates have proposed that we have a “flat tax.” The basic idea is that every citizen would pay the same percentage of income to the government. They generally suggest something in the range of 23 to 25% for a Federal tax rate. That sparks another round of debate, because there are many ways to define “income.” A paycheck is income, right? What about earnings on investments? Appreciation on the value of property? Very quickly, the “flat tax” proposition slips into another quagmire of contentious opinions.

When Bill Clinton was running for office, a political cartoonist offered the Clinton Simplified Tax Plan on a postcard:

          A.  How much did you make last year? $______
          B.  Send it in!

The joke has a serious point: Even if everyone could agree on a reasonable income percentage for tax (say, 100%), we could not agree on how much money each of us makes. And at that point, the “flat tax” idea falls flat.

Enter the “fair tax,” which has been proposed by Mike Huckabee and other conservative Presidential contenders. Their idea is to tax everybody on spending, not on income. In its purest form, this would impose a national consumption tax on every item and service that we purchase. To be fiscally sound, this tax-on-spending should be set at a rate to cover thel government benefits that we receive on every level–local, state, and national. Then nobody could quibble about how much they earn for, sooner or later, everybody spends everything they earn.

So how much would such a tax have to be? This weekend, I compared the total consumer spending of 2010 (the most recent data we have) with the total government spending of 2011 (also, the most recent data). Here are the results in billions of dollars*:

 $   10,246   Consumer Spending / 2011  
 $     3,603   Federal Gov’t. Spending / 2011  
 $       (616)   Federal Transfers to State & Local Govts / 2011
 $     1,435   State Gov’t. Spending / 2011  
 $     1,629   Local Gov’t. Spending / 2011   

  $     6,051         Annual Government Spending / 2011


So the rate required to cover our governments’ current expenditures on our behalf would be:

          $6,051 Billion / $10,246 Billion = 59 Percent

Think about that. Certainly, we would feel good about not having any taxes withheld from our paychecks. On the other hand, are we ready to add 59% to the cost of every product and service that we buy privately in order to pay for what our governments buy publicly on our behalf? I doubt it. Yet that would be fair, because only then would we be paying as we go.

And we could start to repay the $17.7 trillion in debts that our various governments have already incurred on our behalf, because we’re not paying our way.