Comments (16)

• Don Lloyd

  Robert,

  Notice that in order to be "fair" to the poor, people still need to report their income to the government.

  Not true. The monthly rebates would be fixed and universal, and sized to offset all of the retail taxes paid on purchases in the order of $15K to $25K per year, depending on family size. Income is not a factor.

  Of course, what, if anything emerged from Congress would be unpredictable.

  Regards, Don
  

  Published: March 16, 2005 12:42 PM

• Blah

  In my opinion, people shouldn't worry about simplifying the tax code, cutting taxes, or balancing the budget. Just cut spending. Cut spending and the rest will follow.

  Published: March 16, 2005 2:18 PM

• RPM

  Don,

  I stand corrected; thanks. This paragraph misled me:

  To protect low-wage earners who are excluded from income taxes today, a national sales tax would have an exemption for all taxpayers to offset the taxes on spending equal to or higher than the federal poverty level, now about $9,800 for an individual and $19,500 for a family of four. How would consumers get the rebate? The "Fair Tax" legislation envisions monthly rebate checks, about $188 for a single taxpayer or $375 for the family of four.

  So I thought they were specifically targeting poor people, and especially if they have to know your family size...? Or do they just mean that's how it would turn out on average?

  Published: March 16, 2005 5:29 PM

• No Sales Tax!

  The rebate idea is horrible. Within no time at all, a lot of people will get the idea that the government just hands out money for free. Then they'll start agitating for an increase in the size of the checks.

  To me, the worst aspect of a sales tax is that it is relatively invisible. You pay a little bit with every purchase. It's easy to forget the tax exists at all.

  If a tax must exist, it should be as painful as possible. For example, with an income tax, get rid of income withholding. Have the government send you a bill every month for "services rendered". Preferably with a line item explaining what you are being billed for. You have to pay for your government services just like you have to pay for your electricity and phone. This should make people much more aware of both the cost of government and how their tax dollars are spent. That can only be a good thing, IMO.

  Published: March 16, 2005 7:13 PM

• Joe LaBaw

  In my opinion true Social Security reform (i.e. getting rid of it) is still considered a radical idea.

  Published: March 16, 2005 7:56 PM

• tz

  Sales taxes are visible.

  However they should drop the "poor" rhetoric, and mail everyone a cheque for whatever percentage the tax on a theoretical basket of subsistence items subject to the tax. Everyone with a social security number. That avoids the reporting problem.

  Published: March 16, 2005 8:43 PM

• Kyle

  If Libertarians are supporting this idea it's an absolute wrong. You can't say that you want to cut taxes or want to do away with them and then turn around and say that this idea is good.

  People under the Illusion that this is a "Fair" tax are not only funny but also wrong. There is no such thing as a "Fair" Tax, there is nothing fair about getting your money stolen at all, I don't care if it's for a just cause or not. Stealing is stealing. Also you will always have someone complaining that the "Fair" Tax isn't Fair, thus the cycle will continue.

  If your a Libertarian your in favor of cutting taxes and tax programs completely not making new ones. What are these self-called Libertarians representing?

  Published: March 17, 2005 10:42 AM

• Ashish Hanwadikar

  Kyle,
  If you want to eliminate all taxes, can you please me how will we fund police, courts, and armed forces?

  Published: March 17, 2005 12:39 PM

• Win

  Ashish,

  Please read the collected works of Murray Rothbard for starters. How could you be posting on the Mises site and not know this?

  Published: March 17, 2005 5:03 PM

• melt_core

  Win,

  While his remark does seem out of place on mises.org, not all Austrians are for state = 0 ...

  Published: March 17, 2005 5:49 PM

• Curt Howland

  Ashish, voluntary interaction. If the program (such as police, courts, etc) is widely popular, people will subscribe to it voluntarily. Coercion isn't needed. If they are not popular enough to thrive, then there is something wrong with the model of "service" in the first place.

  Because of the nature of human beings to cooperate in order to benefit themselves (division of labor, economies of scale, that sort of thing), coercion in society is only a tool of destruction.

  By diverting resources either directly through theft called "taxation" by the ones who benefit from it, or indirectly such as the money and time I spend trying to reduce my tax liability and get all the forms filled out correctly, people are left with far less ability to voluntarily cooperate than they otherwise would.

  To bemoan how no one "could" provide these basic services forgets that without government interfering with peoples productive abilities there would be so much more time, material and money available to do so. And do it better.

  Published: March 17, 2005 10:17 PM

• Kyle

  Private (Profit Loss) insurance companies could provide the following: Police (for any dispute between two (or more) peoples with (at least) one of the persons in the dispute a member of the insurance company or Police could be in the form of security guards defending someone's property from aggressors with payment for the service) if they are biased people will not want to be apart of their insurance company and it will fail, Firemen (Quite natually to protect the insured's property from getting any futher damage from the fire), Army (Private non-standing or Standing army that is trained much like the king's men in the medevil times experts in their trade, Communities of people together could from a Militia at will to defend against aggressors).

  Roads would be built (quite naturally) as they were in the early 19th century, As Tom DiLorenzo points out, Turnpikes in New York (Turnpikes are what they called roads back then) with complete private funding although they didn't yield great returns at first the investors as well as the businesses saw the future profit, States Amended their constitutions to make illegal internal improvements ie Corporate Welfare (Subsidizing).

  Charity, People are Human and do have emotions, charity could come in many forms, Private Charity is the only way to help the poor because it makes the people that receive the charity on a tight budget and only use it on necessary items.

  For other things that the Private Companies and people could do see: Rothbard, Hoppe, DiLorenzo, and Mises for starters.

  Thank you for reading

  Kyle

  Published: March 17, 2005 10:55 PM

• arielb

  Sales taxes are not visible because you don't write out a big check to "The Government." It's death by a thousand cuts. How many people know how much they paid in state sales taxes? Would you notice in your shopping bill (if you even bothered to save the receipt) if taxes on beans went down while taxes on caviar went up because that is an item for the 'rich'?

  Published: March 22, 2005 3:59 AM

• DB

  The Euros already have something resembling a National Sales Tax, its called the Value Added Tax. What I hear no one talk about is that a National Sales Tax at a high enough rate to abolish the IRS and to fund all necessary functions of the federal government, will actually work as a break on the overall economy as it will have an inflationary effect on ALL goods and services, as companies will pass those taxes on to the consumer.

  
  Economics 101: Inflation begets higher interest rates. Therefore, the net long term effect is that people who have assets will benefit while those who have no assets or who are net debtors will be hurt even more.

  Why do you think that the European economies recover so sluggishly from recessions? Be careful what you National Sales Tax people wish for, you might not like what you actually get....

  Published: April 1, 2005 9:07 AM

• Scott

  The national sales tax (NST) is unlike a Euro-style value-added-tax (VAT) in that the NST is collected only at the final retail point-of-sale, while the VAT is collected at each transfer of the good or service. Under this system, when the farmer sells his grain to the milling coop, he pays tax, when the coop sells the flour to a bread manufacturer, it pays tax, when the bread maker sells the bread to a grocery store, it pays tax, and finally, the consumer who buys the loaf of bread pays tax. In Europe, each of these taxes is on 18 percent or more of the cost to the product added at that level. A US NST would merely assess 15, 23 or some other percentage one time, on the consumer.

  Comparing the NST with the VAT is like comparing horses with donkeys. The savings in paperwork alone would fuel the economy for a decade...

  Published: January 28, 2007 2:40 PM

• Oops

  "he maintenance of a government apparatus of courts, police officers, prisons, and of armed forces requires considerable expenditure. To levy taxes for these purposes is fully compatible with the freedom the individual enjoys in a free market economy. To assert this does not, of course, amount to a justification of the confiscatory and discriminatory taxation methods practiced today by the self-styled progressive governments. "

  -- Ludwig von Mises

  Published: May 30, 2008 4:06 AM