Tuesday, January 8, 2008

Behold the FairTax, part 2

Careening wildly back and forth, the FairTax debate rages on. In part one, I summarized an op-ed by a staunch proponent of this tax; here is the other side (A20, by Jerry Bowyer; subscription required).

  • "People would simply switch from cheating on income taxes to cheating on sales taxes." Bowyer further explains this quirk of human nature (a.k.a. innate tendency to sin...but that's another debate altogether): "Small vendors often fail to withhold sales taxes. Buyers cheat on sales taxes now. They often fail to pay taxes on interstate catalogue sales. They buy some goods in black markets...There is a large category of economic activity designed to avoid sales taxes -- it's called smuggling."
  • "Then there's the complexity argument. You don't think the lobbyists and lawyers will get involved in this, looking for exemptions on houses, medical services and education? You're going to put a 30% tax on my home purchase, and my doctor visits and my kids' tuition? Yeah, great idea." Put well. Then again, say the proponents, it would drive down prices.
  • "And what about business transactions? If you tax business-to-business transactions, then you'll set off a wave of corporate consolidation. Instead of buying from a supplier at a 30% markup, I'll just buy my supplier and be tax free..." True--and nobody likes monopolies, save perhaps the *corporate giants* themselves. I wonder if it's a case of capitalism vs. "A house divided against itself cannot stand."
  • Bowyer closes vividly: "None of this matters anyway. We will never make this change. The 16th Amendment will not be repealed in favor of a tax vigorously opposed by an army of restaurants, pubs and retail stores. It's hard to get good ideas through the ratification process; imagine how hard it would be to push this stinker..." Watch and see.


MathewK said...

Who is pushing this Fairness tax so fervently?

Hannah said...

Huckabee, for one. Certain aspects of it do sound good, but Bowyer does have legit concerns--all I want is a fairER tax system, fewer loopholes, and so on.

WomanHonorThyself said...

wow hannah u really did your homework on this one!:)

MathewK said...

Thanks, flat tax for me. I don't like this paying more tax, the harder you work system. It discourages people from working harder, it's logical, but somehow, some folks need that explained to them, go figure.

Wes Messamore said...

I'm down with abolishing the income tax and replacing it with nothing! You make up the difference by cutting government's ridiculous spending.