Wednesday, December 26, 2007

Behold the FairTax

On page A10 of today's WSJ is an editorial about the FairTax by one of its proponents, Leo Linbeck. He seeks to debunk misconceptions about this proposal (which, by the way, Huckabee supports).

  • Contrary to "one assertion," the tax did not begin "as a project of the Church of Scientology at a time when it was seeking tax-exempt status." Rather, "a handful of business leaders" researched the market for over ten years.
  • The tax will "remove significant price disadvantages suffered by American producers competing with tax-free imports." That would be something nice to see.
  • Also, "it would not hit the poorest Americans the hardest" because it "calls for sending every American a 'prebate' check to offset the cost of the national sales taxes by those living in poverty." Admittedly, this does remind me of a previous editorial complaint that getting the proposal passed has about as much chance as Christmas more than once a year. Not to mention tracking every American down to sent the check. Problems: the homeless and those who are census jumpers (haven't heard of any so far, but you never know!).
  • The rate is 23% when calculated "inclusively, as are income tax rates." However, it is closer to 30% if one calculates it like a retail tax. Makes you want to brush up on your algebra, doesn't it...
  • Here's real cause for rejoicing: "The FairTax eliminates all loopholes, gimmicks, exemptions and deductions from the federal tax system...It's no surprise, then, to see that vested interests have argued against the FairTax..."
Here's wishing for Christmas to happen again!

Update: Three mutually contradictory follow-up letters to the editor may be found here (subscription required, as usual).

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