So, the FairTax might save enough to take the deficit from $1,470,000,000,000 to $1,459,000,000,000 before you add what the states will charge the feds for administrative and collection fees. Or will this be an unfunded mandate on the states?
Defend Liberty wrote:
No tax system is designed to specifically address spending. However The Fair Tax does address the spending problem by eliminating the IRS and its $11 billion/year price tag. The Fair Tax dovetails with the limited government principles in the Tea party for the above reason.
The FairTax folks have grossly underestimated the administrative and enforcement costs of the FairTax. They base their estimates on current sales taxes in many states. However, no state has a tax base as wide as the FairTax, nor is there a state with a sales tax rate anywhere close to as high as the proposed tax rates in the FairTax. Thousands of businesses (mainly service businesses) which do not currently collect sales tax would be added to the sales tax rolls. And the states generally have no experience with trying to collect taxes from these currently untaxed businesses. Adding them to the sales tax rolls will cost money. Where will it come from?
The real problem right now is that for every $1 we pay in tax revenues, the Congress borrows an additional $0.40 so that they can spend a total of $1.40 for every tax dollar we pay.
A "revenue neutral" tax system replacement doesn't do anything to resolve the actual problems we are facing now.
Finally, I think most TEA Partiers are in favor of scrapping our current system. The "Contract from America" last year included fundamental tax reform. Here's their point on that:
From the Contract from AmericaI would definitely support that.
Adopt a simple and fair single-rate tax system by scrapping the internal revenue code and replacing it with one that is no longer than 4,543 word—the length of the original Constitution.
However, H.R.25 (The FairTax bill) is very heavy for that goal, coming in around 5 times the length of the constitution (well over 22,000 words).
Oh, and in your reply to Pollster1, you left something out. You should have included this:
The same will happen with another flat income tax FairTax only faster thanks to the thousands of lobbyists that didn't exist in 1913.