The Fair Tax

Friday, August 27 2004 @ 03:19 PM PDT

There is an idea floating around called the "Fair Tax" which is also called the "National Retail Sales Tax". Information about this is available on the Fair Tax web site.

I've become a firm believer in this, especially after having to file a tax return from Hell this year. I felt completely violated after having to file this return. It was sort of like a financial anal exam.

Anyway, the popular talk radio host Neal Boortz is a staunch supporter of this plan. He has a column about the Fair Tax on Townhall.com. Please give it a read.

Now, even though this is a great plan, I don't think it will ever pass for several reasons. Please click "read more".

Here are a few of the reasons I don't think the Fair Tax will ever pass:

• Washington politicians and bureaucrats crave power. Turning over the vast amount of income information to the government coupled with their ability to twiddle the income tax code to either punish or promote certain activities gives them incredible power. They will not give this power up without a fight.
• Opponents will whine that this will cause large job losses as IRS employees will not be needed anymore. (Now there's a hollow argument... keep an expensive, intrusive system around just so some boneheads who can't work anywhere but for the IRS can keep their jobs. Heck, just disolve the IRS but keep paying them their salaries the rest of their lives. They would be doing about the same amount of work and we'd still save money.)
• The Left will say this plan will shift the burden of taxes from the "rich" to the "poor", stiring up yet again their tired old class warfare arguments. The Fair Tax will not do this, but the left will not let the facts get in the way of their FUD. John Kerry has already started spreading his FUD about this very thing after the fellow at a Bush rally asked the President about the Fair Tax and Bush responded mostly favorably about it. Kerry gave the old "hurt the poor" response even though it's obvious he has no clue what the Fair Tax plan even is. The mainstream press will parrot this FUD without question.
• Critics will say everything will begin to be sold on the black market. Of course, people cheat on their taxes now, so this is nothing new. Also, income that is untaxed now (such as that made by drug dealers, illegal aliens, etc.) will be taxed as these people spend their money for goods and services. The only possible real chance for fraud I see is when business owners use their exemptions for sales tax on items they are going to resell for items they will personally use. There will be no income records to verify that they actually resold the items. However, this should really be no different from people who deduct as business expenses things they use personally now.

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