Unless I am misunderstand the differences, there are no similarities between the revenue generating mechanism of the Flat Tax and the FairTax.
I know you are an accountant Ray, and I appreciate your thoughts on this matter, and your support for the FairTax. As a CPA, you are much closer to the problem than I am, but let me share my thoughts with you.
Flat Tax is an income tax. Forms have to be filled out and determination of income must be made so the tax can be determined. IIRC, the determination of income is what about 90% of the IRC is all about, and is probably 100% of the IRS disputes are about (legal deduction or not = more or less income to be taxed?).
What is different other than a flat rate and no deductions? Not to mention how angry the IRS folks are gonna be when Americans are allowed to send them a post card sized form and a check for “all the taxes they owe” without having backup data.
Talk about an auditor’s wet dream!!!
FairTax is paid by retail merchants to state sales tax agencies just as they now pay state sales tax. No muss, no fuss. Retailer experiences $xxxx.00 in sales, collects $yy.00 sales tax and sends it to The Man.
Think of how many non-retail-business-owing Americans will FOREVER BE FREE OF THE IRS!
That single factor is worth whatever we have to do to pass FairTax!
I believe there will still be withholding, but with such simple tax forms (it’ll make the IRS 1040EZ look complicated in comparison!), my modified version of the Forbes flat tax plan means a 75% reduction in yearly tax compliance costs—instead of around US$500 billion per year, it’ll be more like US$125 billion per year, freeing up US$375 billion per year now spent on tax compliance for more productive economic activities. What will the US economy be like with US$375 billion per year of liquidity freed up?