FairTax Vs Flat Tax

First of all I am no expert on this argument. The following are my opinions on the matter. I cannot get much deeper that I will get. I am not the best person to ask questions about this subject to. However let me set you in the right direction. First of all there is the FairTax Website. If you are willing to spend hours upon hours of time getting all the specifics there ya go. Libertarian Talk-show host Neal Boortz and Republican Congressman John Linder have written two books on the subject. First there is the original FairTax Book that was released in 2005. There were many questions and critics that resulted from the first book so a second book was written to answer those questions and clear the air. FairTax: The Truth. Answering The Critics was written last fall and released this Spring, just a month or two ago. On the other side of the argument are Steve Forbes’ and Dick Armey’s books.

Is that not enough for ya? Are you thirsty for more? There were two relevant workshops hosted during Newt Gingrich’s Solutions Day last September. Linder & Boortz hosted one for the FairTax and Dick Armey hosted on on the Flat Tax. In addition Neal Boortz has produced a Web Seminar on the FairTax and you can view it HERE (it works better in Internet Explorer than it does in Firefox).

Okay so we’ve got that out of the way. Now to the meat and potatoes of this post. It is no secret I am a proponent of the FairTax. I think it is the only way we should go to fix our system. I know that some of you disagree with me and have let me know that in no uncertain terms. Fine. Let’s all agree on one thing before we move forward. Our tax system sucks and we need to do something about it. It’s terrible and horrible. It needs to be fixed in some form or fashion.

First of all for the person who is coming by and has no idea what I am talking about let me explain. The FairTax (aka the National Retail Sales Tax) is a plan that would eliminate the Internal Revenue Service (or IRS for short), eliminate payroll taxes, corporate taxes, FICA, The Death Tax, Medicare Tax, Social Security Tax, etc and replace it with a flat 23% sales tax on every new item that you purchase at the consumer level. The tax would be included in the price of every item you buy (in other words not added to the price at the counter like a normal sales tax). The plan was developed by a group of professors and economic experts back in the early 1990’s after much research and development. The plan was designed to be revenue neutral. In addition the plan includes a prebate check issued to each legal American citizen and family to offset the purchase of items that are needed each month (like groceries) and would pay you for each person lving in your household up to the poverty level. In simplistic terms the FairTax replaces our current tax on productivity and income and replaces it with a consumption tax. The FairTax wa supported and pushed by several GOP candidates for President (Mike Huckabee, Tom Tancredo, Duncan Hunter, Alan Keyes,) and a Democratic candidate (Mike Graval, who is now running for the Libertarian nomination). In addition Libertarian candidate, Bob Barr is a supporter. The FairTax is an actual bill in the hopper of the house and Senate and has over 70 co-sponsors at present.

So why do I favor the FairTax over a Flat Tax. It’s very simple. We’ve already tried it before. Back in the 1980’s under the Reagan administration we went to a flat tax. It basically wiped the slate clean as far as the tax cod is concerned. Almost twenty years later the tax code is hundreds of pages long and very complex. Let’s all agree that it is too complex. Here are reasons why I favor the FairTax over the Flat Tax (these are all things not possible under a Flat Tax):

  • Under the Fairtax, April 15th becoems just another Spring Day. No more filing to worry about. No more filing stress! No more paying someone to do the work for you. Go out have a picnic and celebrate the end of Tax Opression!
  • While there is a tax code still in place, the Federal Government, along with help from K Street lobbyists and their soft money will continue to influence our behavior with tax breaks and tax increases depending on who you are and what behavior they want to punish or reward.
  • The poor are untaxed! That prebate check is designed to cover their basic necessities. The FairTax does more to fight poverty than Lyndon B. Johnson ever did during his “War on Poverty.”
  • Under this system the States will realize that this is the best way to collect their money too and when that happens you get to keep every dime that you earn and nothing is taken away!
  • Your money is your money. You get to decide what to do with it. The consumption tax is voluntary. You can save or invest your money and when you want to withdraw that or cash in there are no more taxes paid when you collect!
  • There are many companies that have relocated overseas for tax purposes. the day the FairTax is enacted and the 16th Amendment repealed the United States will become the world’s tax haven. All those companies, their jobs, and their dollars will return to American soil and they will be followed by many more companies that will decide that it will be better to do their business here in the United States! Talk about the ultimate economic stimulus!
  • Remember that prebate check I talked about? Well if you are not a legal citizen you don’t get one. The only way you are going to get one is to go back home and enter this country legally. In other words the FairTax punishes illegal aliens and is a motivation for them to actually become legal citizens!
  • Most importantly the FairTax would be the single most transfer of power from the Federal Government back to the people.

That’s why I prefer the FairTax over a Flat Tax. I am sure there are people out there that still disagree with me. that’s fine. This is America. The great thing is that we can share our opinions with each other and it is not a crime to disagree with the Government and how it works. If yo uwant to give a rebuttal, go ahead. You have free reign. I won’t fire back at ya. I will now allow you, my readers to opine. Any rebuttals on the side of the FairTax will not come from me (if any they will come from supporters of the FairTax). I have already stated my case. Just don’t attack anyone or their views on the issue. There ya go. Have at it.

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