"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.
Tags:
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
Reply, Part 3
Date: 2007-09-12 05:29 am (UTC)I don't think either is better, really. They come across as pretty much identical. The government is perfectly capable of mailing out checks with an acceptably low error rate, just ask people in Social Security, or the Post Office. It's a solved problem the government can easily handle.
However, as mentioned above, any kind of tax scheme is going to require enforcement. So you'd end up with whatever agency fishing through people's sales transactions, complete with audits, interest, penalties, and threats, because that's what investigating and reporting involves. I imagine there would be penalties involved for breaking the tax law, which could very well include "confiscation of homes, property, and bank accounts." You seem to be completely discounting the possibility that people would seek to evade the "FairTax" just like people try and avoid paying income tax. Which means there'd need to be enforcement, which would look a lot like the IRS.
"• That an monthly advance tax rebate is the same thing as "being on the dole" ? (Only lobbyists, special interests, and business deserve "handouts" ? - the politician gets a payoff from a lobbyist, the lobbyist gets a payoff from its client, and the citizen gets higher taxes and/or prices that pay for it all.)"
Heh! Well, for starters, I never said anything like that. Secondly, no, it wouldn't be like "being on the dole." Thirdly, I've suggested a "taxpayer's dividend" several times, after seeing the ideal elsewhere. The idea being that since we're stockholders in the government, we should get a dividend just like stockholders in companies do, which basically amounts to the government giving everybody a check every so often. And fourthly, I don't see "being on the dole" as a necessarilly bad thing. There's a lot of times and reasons when somebody could be getting assitance from the government or society, and I don't think that's a bad thing. I'm a liberal. In general, I support expanding things like health care, unemployment insurance, etc, especially in the crappy and unstable economy we have now. So I'm afraid this was a completely fruitless line of argument.
"• "Hidden taxes" in higher prices are fine because they're not "taxes," per se? (Hey, forget that families are really paying business's costs for complying with a business income tax code - staff, consultants, submittals, etc.)"
I'm skeptical of how much in the way of "hidden taxes" there really are in most prices, and how much of those hidden prices are related to tax code compliance. Is the amount spent on "staff, consultants, submittals, etc." really signifigant? How does it compare to, say, CEO compensation? Political lobbying? Accountants and consultants to help evade taxes? Stockholder dividends? Profits? Etc. And the idea that getting rid of corporate taxes would result in lower prices I find unlikely. Plus, given corporation's (stupid) legal status as individuals, why shouldn't they pay income tax like everybody else?
More in the next reply. Sheesh, this is long.