FairTax

From Free Talk Live

The FairTax is a proposed legislation that would replace the income tax (among others) with a national sales tax. It tends to be controversial; the idea of abolishing the IRS and making the tax burden more obvious to the average American seems appealing to those interested in decreasing the size of government, however opponents often point out the system still has problems such as just replacing the IRS with a different bureaucracy, the difficulty in repealing the 16th Amendment, and failure to decrease federal spending at all.

One of the most notable proponents of the FairTax is Neal Boortz, who co-wrote The FairTax Book in 2005 with Georgia Congressman John Linder.

Opposition

Those who disagree with the Fair Tax provide the following reasons for why the Fair Tax is bad:

• Every person in America would be receiving the FairTax "prebate", which is thinly-disguised welfare. However, it should be pointed out that the "prebate" is really just returning tax money that people have paid up to the poverty level (assuming they spent up to the poverty level).
• There is no guarantee that the 16th amendment to the U.S. Constitution will be repealed, meaning that a few years after the FairTax passes, Congress could reinstitute an income tax.
• The FairTax is similar to a Value-Added Tax (VAT) but not the same. A VAT taxes the good or service at every stage of production, whereas the FairTax only taxes the final product. Both are embedded into the final price, meaning that tax does not need to be computed at the time of sale. This nullifies the pro-FairTax argument about the evils of the income tax witholding system, because an embedded sales tax has the exact same problem - namely, those being taxed have no idea exactly how much tax they're paying.

External links

• Americans for Fair Taxation official web site

• The Fair Tax Fraud
• There is No Such Thing as a Fair Tax
• The Case Against the Flat Tax (PDF)
• Libertarian Party Stance on Taxes
• Ron Paul tried to introduce "Measure would repeal 16th Amendment"

In the third point above, where the author says a person would not know what tax they paid on an item is completely untrue. The sales tax rate would be 23% of the purchase price and would only be applied at the end retail transaction to the consumer. There would be no hidden taxes in the price of an item.