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March 15, 2008

Fair Tax: The Truth

Answering the Critics
Neal Boortz & John Linder – ISBN - 9780061540462

This is the capstone to their prior book suggesting and explaining the Fair Tax. Ever since the release of that book there has been excessive controversy based upon ignorance of their carefully studied program. In this volume, as is suggested by the title, they take on the critics and explain the malaprops, misunderstandings, misrepresentations and outright lies of the opponents of this proposal . . . to the satisfaction of all but the committed opponents, most of whom willingly suspend logic in order to attack the Fair Tax.

Their proposal is so logical, so simple, so uncomplicated and so right that one has to wonder how there can be any logical opposition. A cadre of tax attorneys and accountants might oppose it because they might become unemployed. Politicians might oppose it because they see that such a tax will emasculate them in some considerable measure. With no tax code, per se, they will be unable to dole out favors to contributing constituents searching favors. Not a few businesses benefit from said favors, and might also be expected to oppose the tax for obvious reasons. But make no mistake, the opponents—almost without exception—are in dire opposition for specific, parochial self-interest.

Imagine eliminating the impact of the IRS and FICA from your life: no income or payroll taxes, no records to keep, no audits, no bank searches, no invasion of your life and privacy! No 1040’s, or short-forms either. No deductions because there are no taxes (of the historic kind.) Imagine receiving your full pay check at week's end. No deductions.

Instead you pay a one-time tax . . . a sales tax, more or less, which is applied only to new goods and services. Buy an old car, a “used” house, whatever: no tax. And for all citizens that tax which would be assessed to essentials up to the poverty limit will be pre-reimbursed so that the poor—and the rest of us—will pay no tax upon purchased goods up to, say, $30-40,000. And imagine no underground economy. All will pay the tax. Only citizens (and legal residents) will receive the reimbursement, know as a prebate. The primary investigations will involve those who try to avoid charging or paying the tax, but they will be few because the penalties are severe.

Since every product purchased already has imbedded taxes, the 20+% end-tax will be largely, and in most cases completely, offset by the elimination of the imbedded taxes. Thus the cost of goods and services will change little, or not at all.

Most rational, however, in addition to those facts mentioned above, the Fair Tax will eliminate over 300 billion dollars in compliance costs to industry and citizens. Imagine what that would do for the economy. That's a hell of a lot of "found money," even in an 11 trillion dollar economy. And even that doesn't include the endless hours of aggravation and pain, or the paper, ink, chemicals and trees spared.

It all sounds complicated, but it isn’t if you carefully read, or re-read the first book and follow-up with the second. I recommend both.

The time has come!!

Posted by respeto at March 15, 2008 4:19 PM