"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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Re: Is there anything worse than the present system?
Date: 2007-09-12 06:27 am (UTC)In many ways, yes, it is. Because of economies of scale. There's many situations where a larger organization can have a lower long term cost to producing things or doing things. There's times when centralization can actually be a benefit. In this case, if there were 50 state agencies, they would all have to duplicate a lot of the same functionality across each other. Multiple databases, multiple regulations, multiple locations, and more people on the staff. Yes, all of the states already have tax agencies, but something the size of your proposed federal state tax would require them all to grow many times over, to handle the increased workload. New larger computer databases would be required, new networks to connect them together, and then entirely new channels would have to be set up to send it to the federal government. And there would still have to be an IRS of some kind, to collect the money coming in from the state agencies, check it for accuracy, and get it all where it belonged.
I suspect it'd take a larger overall bureaucracy to run 50 such state agencies, plus the central federal agency to coordinate and receive the money from them. Also, I don't have any particular onus against "gargantuan" government agencies. It should be as big as it needs to be to get the job done. I'm not going to hate on the IRS just because of its size.
"• That the work by notable economists (paid tens of millions of $'s by Americans for Fair Taxation) doesn't carry weight because it was paid for by private funds instead of some gov't / quasi-gov't enterprise?"
In a word, yes. In more words, it depends. But the short answer is, yes. If people are paid "tens of millions of $'s" by someone to perform research for them, then it's not really unseemly to expect their research might be biased towards what they think the people who paid them want to hear. And then there's plenty of examples of "researchers" who were paid to create "reports" in favor of the side that paid them. Even if there was little basis for the reports. For example, the tobacco industry paid a number of doctors and scientists to muddy the issue of the addictive and cancer-causing properties of cigarettes. Despite volumes of research proving the connections. Or, still ongoing, the fake "foundations" and "think tanks" funded to muddy the water on global warming and pretend we need "more study", despite the overwhelming scientific consensus. Or the "Intelligent design" groups fronted through think-tanks and foundations and "studies".
So yes. Just citing reports from research paid for by your group isn't going to be convincing. Just one source is never enough to confirm something, that's a fundamental basis of science. Reviews from independent groups, and groups with no direct interest in either side of the debate, are usually more credible. If your claims are backed up by studies by independent groups, or even better, liberal or other groups that wouldn't be inclined to support the idea, those would be more convincing. Economists you've paid "tens of millions of $'s" aren't, because they're likely to tell you what you want to hear, or at least leave out the negatives, because that way you'll keep paying them.
Wrap up in the next reply.