Posted by
Andrews on Friday, May 13, 2011 3:05:19 PM
I just received an email from the FairTax people offering to compare the FairTax with the flat tax, and, as usual, they stacked the deck to favor their side. I can't go into everything right now, that is what I plan to write this weekend, but let me point out a few issues. first, the idea that the FairTax is voluntary is absurd. It is akin to calling the income tax voluntary as you can choose not to work. if you must pay when you do something, it
IS NOT voluntary. By their definition, the Inquisition was voluntary as you could choose not to be a heretic.
Second, they compare the "best" (by what standard, I don't know) current flat tax bill to their idealized FairTax. That is remarkably unfair. Bills are written with passage in mind, while ideal plans can include whatever anyone desires. They need to compare an ideal flat tax to an ideal FairTax, as anything less is just stacking the deck.
Third, they claim the FairTax is "visible" while withholding makes income tax invisible. I agree with the latter part, but the former is misleading. As the FairTax is bundled into prices, it is no more visible than withholding form paychecks. Oh, it may show on the receipt, but since it is include din every price before sale, it is pretty invisible to my way of thinking. If they want it visible, add it at the register. THAT is honesty.
Fourth, they claim FairTax will help keep your activities private. Now, I am no big advocate for privacy, in fact I think we often place too much emphasis on this non-issue and forget real problems, but even assuming it is as important as they say, how will the FairTax allow you to avoid snooping? For example, "used" goods are not taxed, but how will the tax officials know goods are truly used or you are dodging taxes? By investigation and reporting, same a snow. Which is also why I doubt much of their claimed savings on bureaucracy. The FairTax advocates often act as if the tax officials will just take our word that goods are used, or wholesale, which, if they do, will invite about the largest waver of tax evasion I could possibly imagine.
There is more, the claims that FairTax (which is kind of like a VAT) would be better for the economy than a lower 19% income tax, for example, but that requires more argument, so I will save it and other issues for later. But trust me, even having covered four obvious problems, this short email contains more than enough material for one or even more posts.
By the way, to clarify two points before I go:
1. I accuse the FairTax crowd of stacking the deck before, so I suppose I should give evidence. I wrote about it in "
Short Reply To Doctor Adams", so you can read it there, but the basic argument they made was that any reform to income tax could be undone by the legislature, but at the same time they spoke as if the FairTax were somehow immune to legislative revision. I don't care what they write into a bill, if it is made by congress, it can be undone. So even if the bill says the 16th amendment needs to be repealed before the bill goes into effect, it could be restored, and the bill amended to ignore it, just as easily. (Not to mention that during the Civil War we had an income tax without the 16th amendment, making the repeal of that amendment no guarantee against income taxes.)
2. While I personally think the FairTax is a bad idea for many reasons, including overly optimistic estimates, the high cost and disruption of the change without commensurate benefits, and the absurd "prebate" which makes every American a constant recipient of "government" money, but I am arguing here not against the FairTax itself, but against the unfair and misleading way in which they present their case. I would still argue against them even if they presented the absolute truth, but in this case my argument is not with the tax itself, but with the claims which simply do not stand up to scrutiny.
POSTSCRIPT
As I obviously intend to write a fair amount on the FairTax, I will try my best to list all the posts I have written on the subject:
Very brief prologue
One Thought on the FairTax
Update
Two old ones (plus three)
Addendum
Unintended Consequences
For the record
Definitions
And so it starts...
By the way
The rate
If we must...
The 22%
A New Record
What we need
Shot myself in the foot?
Short Comment on the FairTax
Will FairTax.org Answer THIS Time?
To Prove I Am Fair
Mandatory April 15th Post
Our Biggest Hurdle
Short Reply To Doctor Adams
Revisiting the FairTax
A Very Brief Reply to the FairTax Advocates
Reply to FairTax Comments
Reply to Fair Tax Comment II
Why Do I Bother?
Making Taxes Hurt
Reply to FairTax Comment III
What is Wrong with a Prebate?
Hello!
Gardasil and Logical Errors
Why Argue
Ch-Ch-Changes
Imports and the FairTax (One Issue)
The VAT Versus The FairTax
Note
The Runaway Stagecoach
A Partial Reply to yt_knight
Truths About Taxation
Another Reply to Yt_knight
Reframing the Debate
FairTax Loophole
So Why Do I Care
Administrative Matters
Simplicity
The End of Taxes as an Election Issue
Paved With Good Intentions
Eye Opening Numbers
A Question for my Readers
Some Thoughts On Taxes
1st Annual St Jude Award
Above and Beyond
The Benefits of Federalism
An Interesting Analogy
Keyhole Thinking
Your Government At Work
A Brief Note
My Worst Idea Ever
A
True Conservative Platform
The Problems of Spending and Taxes
Recurring
Bad Argument
Why I Dislike the FairTax
The Best Argument Against the FairTax
The
Foolishness of Corporate Taxes
The FairTax's Liberal Assumptions
More Thoughts on the FairTax
Single Point of Failure and the FairTax
In addition, as I stated in "
Upcoming Post", I plan to finally complete my line by line analysis of either the bill or "the book", or perhaps both, and hope to have it posted within two weeks at the most.