FairTax Debates

Purchased an advance copy of Boortz and Linder's FairTax book. One of the most cogent rebuttals I've heard concerning the FairTax is that in order not to send deficits sky-high, the national sales tax proposed would have to be something on the order of 30% or so… which would inevitably prompt avoidance behavior, further reducing state revenue. Therefore, it will never pass.

I'm not sure of the extent to which the numbers eventually fall into place: nobody is, because it depends on the specific proposal put into law. FairTax is a real piece of legislation, not an incremental wonkish tinkering. Therefore, it faces higher hurdles than the sort of everyday, out-of-sight Congressional business we're accustomed to getting from DC.

However, even if this is true, thhere are four mitigating reasons to support the FairTax proposal.

1. The US will guzzle the world's capital, as any corporate leader with a brain and the chance to relocate his company to a country with no income tax, but a solid infrastructure and reasonably predictable legal environment will do so. This will create profound economic growth, and mitigate tax revenue loss.
1.a. Budget deficits are only relevant in proportion to the size of one's actual budget. Although we would prefer otherwise, my wife and I carry debt that would crush friends of ours who are still students — and others who have higher incomes similarly can blissfully service debt that would crush us like a sugar cube.

2. "Values" votes. First of all, no politician who seriously attempts to help get rid of the IRS will ever have to fear for his re-election, particularly (though not exclusively) in the Red States. As a simple increase in freedom, FairTax has an appeal that's hard to beat… only few will actually prefer having to testify against themselves every April 15th, sweating over whether they've accidentally forgotten something that might count as "imputed income," whatever the heck that means in any given year.

3. Class statements. However much the egalitarians don't like it, expensive cars are on the road for a reason: they make powerful statements of financial success. A lawyer can't drive around town in a beat-up pickup: not if he wants to attract the level of client he'd prefer. When "new" is more expensive than used… "new" will become a statement in and of itself. Therefore, avoidance behavior, while likely to occasionally occur, will not be a problem for big-ticket items.

4. Skyrocketing home-ownership. How'd you like to pay no taxes on the part of your income that pays your mortgage? FairTax on its own would do vast amounts to restore blighted neighborhoods. I know this is politics, but let's keep it real for a second, anyway. How many lower and lower-middle-class families are out there buying McMansions? Not a lot. Most of them are moving into fixer-uppers. By taking housing income effectively out of the federal tax scheme, there will be a major secondary-market housing boom.

Advertisements
Leave a comment

4 Comments

  1. Exciting blog. The site out did itself and will be
    back! I love surfing the internet for blogs that are
    exactly like this blog.
    Please take a journey to my pharmacy jobs
    blog.

    Reply
  2. Incredible blog. I admired your site and I will be
    back once again to view it! I use much of my spare
    time searching for blogs like yours.
    Once you sign on, check for my michigan staffing
    blog.

    Reply
  3. Excellent blog. Your site was great and will be
    finding it again!  I surf the net for blogs like
    yours.
    Want to see top notch work, peep my 3220 kabel nokia blog site for the bomb work!

    Reply
  4. Powerful blog. The site was incredible and will be
    back again! Web surfing helps to find good blogs like
    this one.
    I hope you can look through my cash advance loan online blog.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

  • Featured Eyeballs

  • What’s today again?

    July 2005
    M T W T F S S
    « Jun   Aug »
     123
    45678910
    11121314151617
    18192021222324
    25262728293031
  • Archives

  • Blog Stats

    • 132,156 hits
  • Recent Comments

    Cults and Context |… on So, about that Bruce Jenner…
    Cults and Context |… on Yes, I AM, in fact, looking at…
    Cults and Context |… on How The Internet Says “D…
    Kat Laurange on Hungarian Military Sabre …
    Kat Laurange on Rose Garden! The Home Edi…
  • %d bloggers like this: