"The Fair Tax Fantasy"

Townhall ^ | 4/20/09 | Hugh Hewitt

[pissant]

This is a new book that I have co-authored with Hank Adler, a professor at Chapman University's business school, a post he took up after retirement from a long and successful career as a partner with Deloitte.

Hank and I undertook this project because we had --independent of each other and for different reasons-- arrived at the same conclusion: That the "Fair Tax" proposal put forward by my radio tal show host Neal Boortz and Congressman John Linder is a disastrous mirage that far too many Republicans have been drawn too, and for all the wrong reasons. "The Fair Tax" is a hopelessly flawed fantasy, but one with a surface appeal of simplicity that attracts especially politicians in need of energetic volunteers and quick headlines. But if the "Fair Tax" becomes the "Kemp-Roth" of the next few years, the GOP will be rightly punished at the polls as the details of the plan make it to the desks of serious political and economic analysts and from there to large numbers of voters who will examine the plan carefully and reject it almost immediately upon doing so. In short, not only should Republicans and conservatives not endorse the Fair Tax, they ought to affirmatively disavow the plan and press instead for serious and thoroughgoing tax reform, including lower and flatter tax rates.

Fair Tax enthusiasts often call my show and demand that I "read the book," by which they mean one or both of Neal's books. We have, and they do nothing to persuade serious readers of the plans merits, but much to camouflage the scheme's many deeply embedded flaws. Henceforth I'll be able to respond "Yes, but have you read the book that exposes the Fair tax as a destructive fantasy it is?"

[pissant]

Hugh better hope Romney doesn't come out in support of the fair tax. He'll find himself doing another violent 180 spin. Just as he did on amnesty after Mitt started sounding more like Tancredo.

[GeronL]

I favor the Low Tax or No Tax approach

[xcamel]

FYI

[1010RD]

Ditto. 85% of government at the local/state level is redundant or better served by the private sector.

[Terpfen]

Put simply, the imposition of a massive new sales tax --at least 30 percent but probably much higher-- on every product consumed in the United States and accompanied by the simultaneous repeal of the federal income tax code is a risky and deeply dangerous attempt to sell simplicity to a tax weary public.

There's a little bit of spin here. The Fair Tax, in order to achieve revenue-neutral income to the Treasury, would have to be set at 23%. The 30% number arises when you add in state taxes to the final retail bill, but state tax rates are irrelevant to federal gubmint tax rates. (Unfortunately.)

Solution: set the national sales tax at a rate lower than 23% and cut federal spending. Which is the entire goal of the Fair Tax, to achieve lower federal spending while making Americans completely aware of how much they REALLY pay in tax.

That all said, the Fair Tax is never getting enacted anyway, so who cares? I think Hugh is just trying to get some royalty revenue. IMO, he should have written a book advocating a tax policy he likes better, rather than attacking a tax policy that's never going to see the light of day. What's Hugh in favor of, lowered rates in our current tax system? A flat income tax?

[SECURE AMERICA]

Fair Tax?
No such animal exists.
A tax is someone taking something from you to support something you may not benefit from or support.
I do not suport abortion but my tax dollars do.
Someone may not support war, any war Quakers etc.But their tax dollars do.
So you need to get away from the idea that any type taxation can ever be fair.
What it needs to be is SIMPLE and LOW.Period...
No one should have topay another person to have their taxes done. That is the most asinine situation I ever heard of...

[stop_fascism]

The only “fair tax” is land rent taxation. People as diverse as Leo Tolstoy, Mark Twain, Winston Churchill, Milton Friedman and William Buckley agreed on the basic logic of this tax. If you’re interested, here’s a place to start, http://www.groundswellusa.org/thekey.htm

[sbhitchc]

Fair Tax = National Budget/# of Residences in the USA

Imagine how fast spending would decrease.

[cripplecreek]

I don’t have any real feelings on fair tax either way but the real problem we face today is spending.

[AreaMan]

What's Hugh in favor of, lowered rates in our current tax system? A flat income tax?

Hugh is in favor of whatever the GOP tells him to be in favor of.

I don't know if this suffices as an example but Hewitt will constantly ask people to send money to the NRSC (National Republican Senatorial Committee) even though he inadvertently said on air once that the NRSC f**ked up Minnesota and caused Coleman the seat.

The NRSC is backing Specter instead of Toomey in the primary. Guess who Hewitt will back? Will he still shill for the GOP even as they sell us out?

[Gaffer]

Yes, but there are some real FT nuts out there that won’t listen to reason about it’s chances. I’d love for FT to happen. Problem is why would the 50+ % of asswipes in this country who pay NO taxes at all be interested in something like a ‘fair tax’? No reason whatsoever, period.

[Terpfen]

Point well taken.

[Always Right]

I think I have written that book 20 times over over that last 10 years.

[cripplecreek]

I do worry about FT combined with already sky high taxes within my state.

[Gaffer]

The government will never reduce a tax, once imposed.

[Always Right]

There's a little bit of spin here. The Fair Tax, in order to achieve revenue-neutral income to the Treasury, would have to be set at 23%.

Question for you. If you have a $100 item before tax, but the final cost after sales tax is $130, how much sales tax is being charged?

A. 23% (The Fair Tax answer)
B. 30% (As this book states)

[Always Right]

The only “fair tax” is land rent taxation.

With out fiat currency, why tax at all? Just spend and let inflation take care of the tax? That would be the fairest tax and most efficient.

[Terpfen]

Depends, who’s receiving the tax money? If the federal gubmint sees 23% of that $100, then their tax rate is 23%. If the final bill is $130 on an item that costs $100, and the Fair Tax is 23%, then it stands to reason the state sales tax is 7%.

All I’m saying is, the explanation in the book promo contains spin. I’m not promoting the Fair Tax. I think it’s a bad idea because it’s a disincentive for consumption, which is the sole generator of tax revenue under the plan.

[Always Right]

Under the fair tax, the government gets all $30 and calls it a 23% tax. They arrive at their rate by stating the tax as a percentage of the after tax cost, 23% of $130. It is the fairtaxers who spin. I was not including any state tax in my example.

[GeronL]

I am a fervent believer that most local services should be privatized