Comments (10)

• Ian

• You're a real demagoger of the FairTax, Mr. Vance. You know very well that embedded tax-related costs borne by the business are already in the existing price - costs that, under FairTax, competition would drive lower before the 29.85% (23% tax-inclusive - same $$ amount) FairTax.
  
  
  While many who are invested in the current income tax system seek to demagog the well-researched FairTax plan, its acceptance in the professional / academic community continues to grow. Failure to enact the FairTax - choosing instead to try to "flatten" a NON-FLATTENABLE income tax system - will result in an irrevocable economic meltdown!
  
  
  Here is why the FairTax MUST replace the income tax. It's:
  
  

  • SIMPLE, easy to understand
  
  • EFFICIENT, inexpensive to comply with and doesn't cause less-than-optimal business decisions for tax minimization purposes
  
  • FAIR, loophole free and everyone pays their share
  
  • LOW TAX RATE, achieved by broad base with no exclusions
  
  • PREDICTABLE, doesn't change, so financial planning is possible
  
  • UNINTRUSIVE, doesn't intrude into our personal affairs or limit our liberty
  
  • VISIBLE, not hidden from the public in tax-inflated prices or otherwise
  
  • PRODUCTIVE, rewards, rather than penalizes, work and productivity
  
  

  Its benefits are as follows:
  
  

  FOR INDIVIDUALS:
  
  • No more tax on income - make as much as you wish
  
  • You receive your full paycheck - no more deductions
  
  • You pay the tax when you buy "at retail" - not "used"
  
  • No more double taxation (e.g. like on current Capital Gains)
  
  • Reduction of "pre-FairTaxed" retail prices by 20%-30%
  
  • Adding back 29.9% FairTax maintains current price levels
  
  • FairTax would constitute 23% portion of new prices
  
  • Every household receives a monthly check, or "pre-bate"
  
  • "Prebate" is "advance payback" for monthly consumption to poverty level
  
  • FairTax's "prebate" ensures progressivity, poverty protection
  
  • Finally, citizens are knowledgeable of what their tax IS
  
  • Elimination of "parasitic" Income Tax industry
  
  • NO MORE IRS. NO MORE FILING OF TAX RETURNS by individuals
  
  • Those possessing illicit forms of income will ALSO pay the FairTax
  
  • Households have more disposable income to purchase goods
  
  • Savings is bolstered with reduction of interest rates
  
  

  FOR BUSINESSES:
  
  • Corporate income and payroll taxes revoked under FairTax
  
  • Business compensated for collecting tax at "cash register"
  
  • No more tax-related lawyers, lobbyists on company payrolls
  
  • No more embedded (hidden) income/payroll taxes in prices
  
  • Reduced costs. Competition - not tax policy - drives prices
  
  • Off-shore "tax haven" headquarters can now return to U.S
  
  • No more "favors" from politicians at expense of taxpayers
  
  • Resources go to R&D and study of competition - not taxes
  
  • Marketplace distortions eliminated for fair competition
  
  • US exports increase their share of foreign markets
  
  

  FOR THE COUNTRY:
  
  • 7% - 13% economic growth projected in the first year of the FairTax
  
  • Jobs return to the U.S.
  
  • Foreign corporations "set up shop" in the U.S.
  
  • Tax system trends are corrected to "enlarge the pie"
  
  • Larger economic "pie," means thinner tax rate "slices"
  
  • Initial 23% portion of price is pressured downward as "pie" increases
  
  • No more "closed door" tax deals by politicians and business
  
  • FairTax sets new global standard. Other countries will follow
  
  

  The time for sitting around, pontificating, is over. We have NO CHOICE but to demand Congress Scrap The Code - NOW!
  

• Published: August 10, 2007 11:13 PM

• scott

• "Every household receives a monthly check, or "pre-bate" • "Prebate" is "advance payback" for monthly consumption to poverty level • FairTax's "prebate" ensures progressivity, poverty protection "

  what agency issues and keeps track of these?

• Published: August 11, 2007 1:06 AM

• Anthony

• Ian, you are aware of the meaning of demagogue, I hope? It seems you're misusing the term.

• Published: August 11, 2007 7:59 AM

• DC

• So, there would be no rental car tax under the FT? The federal government will revoke all state and local taxes for them?

• Published: August 11, 2007 8:58 AM

• Brent

• LOL... yeah, the "Fair" tax.
  
  "Jobs return to the U.S." Right.

  "Foreign corporations set up shop in the U.S." Uh huh.

  "Larger economic "pie," means thinner tax rate "slices"." Cuz that's government's benevelont tendency.

  "No more "closed door" tax deals by politicians and business." Isn't it obvious?

  "FairTax sets new global standard. Other countries will follow." Hurry! The U.S. is already behind the national sales taxes and VATs of Canada and Europe, respectively!

• Published: August 11, 2007 11:23 AM

• Ray G

• I haven't researched the FairTax enough to go very deep into the overall discussion, but let's focus on what we know.

  The current system is not conducive to a free market, and will eventually - if not drastically changed - cause the balance of our society to tip to a non-free market. (Define that point as you will, the point is that we are moving steadily away from a genuinely free market.)

  The FairTax or something like it would presumably be a kind of catch all and eliminate "extra" taxes like those used to subsidize professional sports, et cetera.

• Published: August 11, 2007 12:53 PM

• Anthony

• The concept of a "fair tax" is a contradiction in terms. Though, it is definitely better than the current tax regime.

• Published: August 11, 2007 5:15 PM

• Norman

• I concur with Anthony. Taxation is theft. A "fair tax" is a contradiction in terms. Why not approach it with the Ron Paul method: abolish the IRS and replace it with NOTHING. Then abolish the Federal Reserve and reestablish the gold standard. Done.

• Published: August 12, 2007 1:55 PM

• Bronson

• Regrading the FairTax and rental cars (leasing) and hotel rooms; those items are taxed by the FEDERAL government today. Basically remove the home mortgage interest deduction and watch those who currently itemize holler that mortgage interest is being taxed. In other words, since your income used to purchase goods and services today is taxed, anything not deductible (such as food, clothing, rents, hotel costs, etc) is in fact taxable.

  The FairTax moves this tax from the front of your income where it is invisible to almost 50% of Americans to the point of retil consumption where it is visible to 100% of Americans.

  While that is not the same as shrinking the size of government, you'll never get to smaller government when 50% of Americans think their goodies are free.

• Published: August 12, 2007 6:35 PM

• DC

• Bronson, two things:

  (1) The federal government may in fact be taxing rental cars and hotel rooms, but it looks to me like the FT won't do anything about these local or state taxes, which as Vance has pointed out are a bit steep.

  (2) Your argument seems flawed to me since it could work in exactly the opposite direction. Suppose that we were living under a FT plan, and that there was a 30% national sales tax on everything. Suppose I wanted to "Get rid of the unfair tax!" and supported a replacement tax on income.

  Then, I could say: "Nowadays everyone ignores the fact that the taxes are added to the sales price as an inclusive 23% rate. People just pay for goods without thinking about how they would cost 30% less if we just got rid of the sales tax. My new proposed FAIR TAX will take the cut from people's income *before* they can spend it. That way, it stops slipping through unnoticed and people will see the devastating effect of taxes with each and every paycheck. Imagine the outrage when Americans realize that they government takes 30% of their hard earned cash before they can even spend it!"

  "Now, this isn't the same as shrinking the government or effectively reducing tax rates, but you'll never get smaller government when people are taking these taxes as granted."

• Published: August 13, 2007 8:22 AM