"Fair" Tax Scam
Sep. 11th, 2007 10:51 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
forsythThe following is the text of an email I sent to NPR's Marketplace show today, after they had a hack from the WSJ editorial page spouting nonsense straight out of the "Fairtax" book. Here's the article in question.
And my letter:
This morning, on the Marketplace Morning Report, you had Stephen Moore on, praising the benefits of a national sales tax. His ideas and numbers come entirely from the book "FairTax" by Neal Boortz and John Linder. And unfortunately, most of what he quoted is inaccurate or false. A 23% sales tax would not replace all of the government income, the percentage was picked as near the maximum amount people would tolerate as a sales tax. A national sales tax, despite his claim, would be extremely regressive and complex. Most families who are out of the top 1% spend most of their income each year, which would make their net tax rate at LEAST 23%, plus the increases in cost that would come from this kind of tax. Whereas the richest few don't spend all their money, which would make their net tax rate far below the 23% the rest of us would pay. That hardly qualifies as "fair" by any stretch of the imagination. And his idea of a $20,000 rebate for the sales tax spent? That would be at least as complicated as the current income tax. The rest of the work of tax collection would then be pushed on to the companies who sell products. It would require just as much work, and we would still require the IRS to investigate cheats and other things.
His entire presentation was misleading at best, and outright false at worst. The entire idea of a "fair" national sales tax is snake oil, designed to cover up for a gigantic tax cut for the rich and a tax hike for the rest of us, not any kind of serious policy suggestion.
And my letter:
This morning, on the Marketplace Morning Report, you had Stephen Moore on, praising the benefits of a national sales tax. His ideas and numbers come entirely from the book "FairTax" by Neal Boortz and John Linder. And unfortunately, most of what he quoted is inaccurate or false. A 23% sales tax would not replace all of the government income, the percentage was picked as near the maximum amount people would tolerate as a sales tax. A national sales tax, despite his claim, would be extremely regressive and complex. Most families who are out of the top 1% spend most of their income each year, which would make their net tax rate at LEAST 23%, plus the increases in cost that would come from this kind of tax. Whereas the richest few don't spend all their money, which would make their net tax rate far below the 23% the rest of us would pay. That hardly qualifies as "fair" by any stretch of the imagination. And his idea of a $20,000 rebate for the sales tax spent? That would be at least as complicated as the current income tax. The rest of the work of tax collection would then be pushed on to the companies who sell products. It would require just as much work, and we would still require the IRS to investigate cheats and other things.
His entire presentation was misleading at best, and outright false at worst. The entire idea of a "fair" national sales tax is snake oil, designed to cover up for a gigantic tax cut for the rich and a tax hike for the rest of us, not any kind of serious policy suggestion.
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Reply, Part 2
Date: 2007-09-12 05:10 am (UTC)"do you really believe ..."
I don't know. Let's go through them and find out what I didn't even know I believed until you told me so! This kind of debating technique's not really too great, making up claims you can easily defeat and attributing them to your opponents. It's the Strawman fallacy, where you attribute an argument to your opponent, and then demolish that, and treat that as demolishing your opponent's argument.
• Workers love having their pay confiscated, hourly, through gov't withholding and don't mind getting their money back by involuntary servitude - to the tune of 50 hours/year (on average) - preparing an annual tax return?
Not particularly. For one, the withholding's not done hourly, it's done when you get paid and calculated then, just like when you get paid. And automatic withholding is a damn sight easier to deal with then not having it withheld, and then having to pay all of it when tax day comes around. I know a number of self-employed people who can testify to that. I must admit to being just a little skeptical of the "50 hours/year" for preparing an annual tax return. Even leaving aside the computer tax programs that take maybe a couple hours, at most, the basic tax forms really aren't that complex. The complex tax forms come in on things like itemized deductions, businesses, and other things usually used by people who can afford accountants. Filling out the basic 1040 is hardly "involuntary servitude".
Let me turn that back around at you. Do you really believe that workers would love paying an extra 30% more for everything they buy, and having some arbitrary portion of that refunded to them by the government? I doubt there's very few people who can honestly claim to "love" anything about taxes, however they're done.
So no, I don't believe that. I believe the tax process can and should be simpler, but I don't believe the "FairTax" would make the process meaningfully simpler for most people, or that its many drawbacks would outweigh whatever level of simplicity it might bring.
"• That certifying the number of persons in your family (annually, and, ancillarily, upon change in household) is an abrogation of our freedom - more intrusive and complex than filing a tax return every year subject to threats and intimidation by theIRS."
I don't recall claiming that, either. I said it would be more intrusive and complex to have the government actually refund the real level of taxes paid, when they're paid on every sales transaction, but you said that's not how it would be done. However, I don't see filling out a tax return as much of an abrogation of our freedom. And whatever method of tax collection you want to use, it's going to have to have enforcement powers, which means even under the "FairTax", there's going to be "threats and intimidation" from whatever agency is responsible for it. Both to individuals who'd lie about their family size, and to businesses and individuals involved in evading the tax.
So I don't see any particular difference between the situation now and the situation under the "FairTax".
Continued in Part 3.