Posted on 08/16/2007 6:10:39 PM PDT by RobFromGa
Fair Tax, Foul Politics
By The Editors
Advocates of a national sales tax to replace the income tax have built an impressive grassroots army. They have given their idea an appealing, if somewhat gimmicky, name: the Fair Tax. And they have managed to get five Republican presidential candidates to suggest that they would sign a sales-tax bill if it reached their desk. Some observers credit the enthusiasm of the Fair Taxers for Gov. Mike Huckabee’s surprisingly strong showing in the Iowa straw poll. Huckabee is the candidate most committed to the Fair Tax.
Former senator Fred Thompson is, however, backing away from the idea. Fair Tax advocates have released a video in which Thompson, asked about the proposal, appears to say he would “absolutely” sign it if elected. On August 10, however, Thompson wrote those advocates a letter that said merely that the Fair Tax was a good starting point in thinking about tax reform. Mitt Romney’s campaign says that the Fair Tax has some attractive elements, but that the candidate would need to see details before making any pledges. Rudolph Giuliani has said that he does not think he would sign any such legislation.
The leading candidates are right to be wary. The tax code needs major reform to become fairer, simpler, and more efficient. The Fair Tax is one instantiation of those goals, but its political impracticality makes it fatally flawed. If conservatives force a choice between a Fair Tax and no tax reform at all, the latter is what they are likely to get.
There is widespread confusion about what the Fair Tax would entail. If you bought $100 of clothing and paid a $30 tax on it, you would probably think you had paid a 30 percent tax. The Fair Taxers say that you paid a 23 percent tax: $30 is 23 percent of the $130 you paid in total. When they say they want a 23 percent tax, that’s what they mean.
Since there would be no more income tax in this system, there would also be no more standard exemption to make sure that the basic necessities of life went untaxed. The Fair Taxers would solve this problem by sending out monthly “prebate” checks to all Americans.
The great, undeniably attractive selling point of the Fair Tax is that it would allow the country to dispense with the IRS. But the sad truth is that if the federal government is going to collect as much money as it currently does—which the Fair Taxers say their system would—its methods of tax collection will inevitably be intrusive. The real difference between the current system and this proposal is that the primary brunt of tax collection will be borne by a smaller group of people: business owners.
Over time, then, enforcement measures could become more draconian than they are today: especially since a massive retail sales tax would create a massive incentive to evade it. That’s why every country that has ever tried to impose retail sales taxes this high has quickly moved to a Value Added Tax levied at every stage of production. Consumers rarely see or keep track of these taxes, and they seem to be fairly easy for governments to raise.
These pitfalls are beside the point, however, since a national sales tax is not going to become law. No presidential candidate could be elected on a sales-tax platform, and no Congress would enact one if he were.
A candidate who ran on the national sales tax would be able to run on nothing else. He would have to spend all of his time defending the idea. Off the top of our heads, we can think of three devastating lines of attack an opponent could use in television ads. One ad could argue that getting rid of the mortgage deduction would send home prices into free fall (something that voters are going to find especially worrisome now). Another could ask why senior citizens, having paid taxes all their lives as they made income, should have to spend their retirements paying taxes on everything they use that money to buy. A third could simply ask voters if they look forward to paying a brand new tax.
There are answers to each attack. But no Republican candidate, especially in the daunting environment of 2008, is going to want to have to make them. Republicans cannot win a national election without the tax issue. If they ran on the national sales tax, Republicans would be taking one of their natural strengths and making it into a liability. Which is why we expect them to say nice things about the Fair Taxers’ passion, and move on.
If you honestly believe that a tax that average citizens can pay without any interaction with the government is is the same as the communist inspired, class warfare inducing, monstrosity we suffer today then we are so far apart that there is no point in further exchange between us.
Have a nice life and "may your chains rest lightly".
Why do you suppose that is?
Complete bunk. A bunch of amateurs completely exposed the core mantra of "100% paychecks, prices stay the same" with zero funding and using only common sense. Buying "research" that gives you only the answers you want to hear is not real research.
Sorry but you need to try again unknown camel. That dog won't hunt.
There, fixed it.
8 years later, and after being exposed as a fraudulent plan, the FairTaxers are still suckering in new converts with misrepresentations of what the rate is, what it would need to be, and how little they know about the potential effects of this radical change.
Hatred of the IRS is not enough to get rational people to support the plan. There are an infinite number of possible plans that all include getting rid of the IRS.
Most of them, including the FairTax, are worse than what they replace.
BTW: The Fairtax movement is growing daily! You are WAY behind! Better get busy!
At the very least, Fairtaxers offer a POSITIVE alternative to that!
Didn't exactly cut down on the IRS, did it?
I think they say the same thing about cancer.
Is all this cut and paste nonsense some kind of tribute to Ancient Geezer?
I’m pointing out the fallacies of the FairTax. The FairTax is unworkable and built on misrepresentation. There isn’t a good taxation strategy for a government that is as bloated as ours. We need to address the spending side of the equation and that is where the grass-roots reform efforts should be aiming their guns.
Not in finding an alternative method to feed the beast, especially one that will be more destructive than what we have now.
Is that supposed to be a coherent metaphor? I honestly have no idea what you’re talking about or what point you meant to make. Birdfeeders? Seagulls??
No! It is an attempt to educate YOU as to the proper methods of tax collection for a FREE society.
Boortz has been able to build a decent sized cult who believe his spin on things related to the FairTax. It will never be able to withstand serious scrutiny as anyone who has looked at it with an unbiased eye knows.
And the special deals that would have to be cut to get this monstrosity passed would make it even worse.
you are tilting at windmills- the problem is that we are spending too much. And we have allowed almost half of the population to be exempt from most taxation while demonizing the productive lucky “rich” people. And the FairTax doesn’t change that.
Nor could they imagine all the vote-buying pork-barrel spending that is done, or the levels and levels of agencies and bureaucracies that we have allowed to be built up.
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