One other problem with something like the Fair Tax—even if the government passed it, you know that Congress would say something like “oh, sure, we’ll get right on repealing the Sixteenth Amendment after we get this in place.” And then they never will, and we’d end up with the current unworkable income tax system (buggered to exempt favored classes such as minorities and “the poor” from the new tax) AND a national sales tax.
The only way you could ever pass the Fair Tax would be to repeal the Sixteenth Amendment FIRST and break the government’s power to levy an income tax BEFORE discussing a national sales tax or VAT. Otherwise you will end up with both, and the income tax system will be used to exempt the liberals’ favored groups from the effects of the sales tax while double-loading the tax burden onto the productive middle class and the productive rich.
Potentially nice idea, but completely unworkable in the real world. Oh, and that whole 23-vs.-30-percent snake oil bugs me too. Call it what it is, a 30% tax on sales. To call it anything else is to engage in obfuscation.
}:-)4
“The only way you could ever pass the Fair Tax would be to repeal the Sixteenth Amendment FIRST”
That is part of the bill. In fact, there is nothing today to prevent from having both an income tax and a sales tax, or any other added tax. The FairTax legislation actually sets in law that we can’t have both.
That's almost a certainty already - probably in the form of a VAT tax.
Milton Friedman used to advocate "starving the beast". IOW, he wanted taxes cut to a minimum, assuming as the the government's annual coffers shrank, so would spending. It never occurred to Friedman - a responsible economist - that the government would run deficits with the vigor that they do today.
The liberal economists have the directly antithetical argument. Rather than "starve the beast", there's is "feed the addiction". They're planning on (and succeeding in), spending themselves into a "crisis", where some other emergency tax(es) will need to be levied to keep the US from defaulting on its debt. All of the a sudden, their dream tax, the VAT tax, becomes a reality.
I'm convinced that's the plan.
The Fair Tax already has a clause that can be paraphrased as "This law doesn't go into effect until the 16th amendment is repealed".
I like the FairTax. It removes the social and fiscal engineering of the current tax code. Also removed will be all of the sales (or rental, Congressmen aren't honest enough to stay bought) of legislation. The biggest lobbying efforts are to game the tax code. One tax rate for every person and none for business and that goes away. Another benefit is that foreign and multinational companies can't play around with which country's subsidiaries actually make the profit, so foreign/multinational companies won't have a tax advantage over purely domestic companies.
Is it perfect? No. The biggest problem is that savings have already been taxed when earned will be taxed again when spent, while those who have been irresponsible and have borrowed and spent didn't pay tax and then won't pay tax when they earn and repay get off tax free.
I absolute agree with this.