Fred Thompson answers "The Question"!(Supports The Fair Tax)

Americans For Fair Taxation ^ | July 25, 2007

[eraser2005]

I understand the concerns about having both systems in place - however it *should* be possible to force a withdrawal of the income tax on a gradual basis... that should not be any more complex than removing it immediately - both would likely require revoking the 16th amendment. Its just the wording that’s different. In one case, you revoke it immediately. The other, you change the amendment with a “timetable for withdrawal” (sorry, couldn’t help myself)....

I think the strongest argument the DaVinci Institute makes is one the complexity of the whole system, and its also one that people often underestimate the effects of. They seem to make the assumption that the leading cause of a future collapse would be increasing complexity, which I certainly wouldn’t argue against being a strong possibility.

When you look back at Kennedy and Reagan and their tax cuts, both times there was simplification of the tax code. Neither tax cut caused revenues to the federal government to drop. In both cases, revenues continued to grow along the same trajectory as prior to the cuts, despite the lower marginal rates. Bush’s cuts, however, only added complexity to the code through additional deductions and credits. The results weren’t nearly as impressive (good solid, but not spectacular growth, but a significant drop in revenues which only last year reached their pre-cut levels adjusted for inflation).

So if you were to do a gradual withdrawal, you would have to fix the income tax code and disallow any changes, other than to proportionally scale back all tax rates over time.