How the current system could be tolerated would be unbelievable to the founders...
“Under penalty of perjury, penalty, and imprisonment, disclose how much money you earned last year, what you paid in interest on your house, and how much you contributed to charity.”
vs.
“secure in our persons and papers...”
secure in our persons and papers...would’nt that be nice?
The founding fathers were well educated, worldly men and would immediately recognize the hyperbole. I doubt your statement would even get attention.
You are required to disclose your income, however, you are free not to claim deductions for charity or interest paid, and thus not required to disclose either. If you choose to claim the deductions, then it is reasonable to require supporting documentation (in other words, if you want something, in this case a deduction, you must back up your claim with proof).
Since the FairTax has no provision for interest or charitable deductions, no documentation is required. Consider that a new home buyer will pay 30% tax on his purchase; in this area that would add $225,000 to the cost of the average home price - what is the total cost in tax and interest to the buyer over the life of the loan?
The same is true for any large purchase that is financed - it is not only the tax one must consider, but also the interest on the amount financed to pay the tax.
Further, because the lending institution is providing a service, there would be a sales tax on that service.
The FairTax doesn't require you tell the IRS what you earn, but income will still be reported to SS. Your banker will still require proof of income when you apply for a loan.
It makes no sense to me that someone who would consider disclosing interest paid on a home loan to get a tax deduction, onerous, would choose to pay more and get less.