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Thursday, June 02, 2005

"Family Friendly" Tax Reform vs the FairTax


The so-called “Family Friendly Tax Reform” is complicated, invasive and, overall, the poorest of all the proposals so far put before the panel.
Proponents claim the FairTax is unfair because a family making $50,000 a year would pay the same amount in taxes for food, housing clothing, etc. as a family making $500,000 annually. This is not so simply because the wealthy family buys more expensive goods and services (mansions instead of houses, limousines instead of Toyotas, Versace dresses instead of Lane Bryant) than the middle class family. Therefore, they would pay more taxes.

In this piece I take each of the arguments presented by a proponent of the “Family Friendly Tax Reform” and compare them to the FairTax.
The estimate of necessary sales tax rate of about 60 percent to fund the federal government at its current levels because taxable retail sales account for less than one-third of all U.S. economic activity fails to consider the fact that the FairTax will tap the $350 Billion a year that the IRS says tax evaders do not pay every year as well as assure that drug dealers, porn pushers, and illegal immigrants all pay into the system along with 40 million foreign tourists annually,
I explain why refundable tax credits, replacing old tax breaks with new ones and exchanging old exemptions and incentives for new and broader ones do not meet the requirement for fairness and, in fact, penalize the elderly, the poor and people who don’t own homes.
In conclusion, a tax that gives everyone 100% of their paycheck or pension and still funds the government, provides a rebate so no one pays tax on necessities up to the poverty level, broadens the tax base by assuring that present tax evaders have to pay taxes, repeals the income tax and other regressive taxation and makes US companies the only ones in the world that do not tax production is the best, most profitable way to go for the country and for its citizens. The FairTax is a win/win tax – taxpayers win, government wins and the economy wins.

Family Friendly Tax Reform vs the FairTax

A new proposal for tax reform called "Family Friendly Tax Reform" should be compared to the FairTax to see which best meets the President’s directive.
Daniel Weinstein, a major proponent of the "Family Friendly Tax Reform" asks, "How would a national sales tax actually make matters worse? Its advocates have long argued that by taxing the things we buy instead of the salaries we earn, such a tax would both simplify the tax code and promote personal savings over material consumption. But the reality would be far different. Consider this: A family making $50,000 would pay the same amount in taxes as a family earning $500,000 for such basic items as food and clothing. For the lower-income family, sales taxes would add up to a big chunk of the family budget. For the wealthier family, taxes would barely be a consideration. That's hardly fair." Weinstein chooses not to recognize that the wealthy spend differently from the rest of us.

If wealthy families spent money the way middle- and lower-income families did, they would all pay the same tax. However, lower-income families don’t buy two or three mansions – one in town, one in Aspen, another on the shore – and they don’t drive around in limousines and Jaguars. They wear clothing from Walmart and Penney’s instead of Versace, Chanel, Vera Wang, etc. Their weddings are in church halls instead of country clubs; they eat out at Red Lobster or Olive Garden instead of Daniel’s, La Cirque or Babbo’s in NYC or The Dorchester Terrace in London. That’s why higher income families will pay more tax – they buy more expensive things.

Weinstein continues, "Some proponents say that food and clothing could be taxed at lower rates -- or exempted altogether -- while luxury goods could be taxed at higher rates. . . And while some have argued that a national sales tax would eliminate the need for the Internal Revenue Service, they overlook the fact that we would need a new agency to collect tax revenues from businesses." Instead of exemptions, FairTax provides a rebate for all taxpayers. That’s fair. It would be nonsense to tax luxury goods at higher rates since they are more expensive in the first place. Elimination of the IRS is elimination of the 60,000 page tax code that no one understands and that the IRS enforces unfairly and unevenly. The collection system for a sales tax would be smaller and non-invasive.

"Worst of all, a national sales tax would have to be much higher than its proponents admit. In fact, the Brookings Institution's William Gale estimates that it would take a sales tax rate of about 60 percent to fund the federal government at its current levels, because taxable retail sales account for less than one-third of all U.S. economic activity." Mr. Gale’s figures did not include consideration of the $350 Billion a year that the IRS says tax evaders do not pay every year, which would necessarily be tapped by a consumption tax. He also left out the money that will be paid into the system by drug dealers, porn promoters, and illegal immigrants who now pay no income tax at all. Add to that income from consumption taxes paid by 40 million foreign tourists annually and you begin to see where Mr. Gale’s estimates are totally incorrect.

Also, the FairTax was developed by some of the finest economic minds in America, not as a superficial intellectual exercise or as a weighted response to make the figures prove a foregone conclusion, but over a 10-year period with careful research into all phases of the US economic system. Economists from a wide political spectrum (Harvard, Rice, MIT, Stanford, and more) came up with a politically unbiased system when they developed the FairTax.

Weinstein again: "There is another hearty perennial tax reform idea: the flat tax -- one theoretically low income-tax rate for everyone. But that, too, would be a raw deal. As former Undersecretary of Commerce Robert Shapiro has calculated, maintaining current federal revenues would require a 21 percent flat tax. . . A flat tax would thus represent a substantial tax increase for a large majority of taxpayers." I have to agree with him here – because the flat tax does not get rid of the current income tax. We do not need any tax that is simply added to the system already in place, including the “Family Friendly Tax”. THAT would be regressive.
Weinstein continues, "'Family friendly tax reform' would bring $436 billion in net new tax relief to American families. It calls for eliminating 68 tax breaks that are redundant. . . replaced by four generous new tax incentives that would be easily understandable, available to the vast majority of taxpayers, and consistent with the progressive values of work and family." That’s exchanging tit for tat and therein lies the first major problem with this plan. First, It keeps the income tax and the IRS. The IRS is the only group in this country with search and seizure rights – you are guilty until proven innocent and the cards are stacked against you. Under this so-called family-friendly reform” those rules still hold.

"The first new incentive would be a refundable college tax credit that would substitute for five existing education tax breaks and provide a $3,000-a-year incentive to students for four years of college and two years of graduate school. . . The second major incentive would be a home mortgage deduction that would be available to all homeowners, not just those who itemize. By allowing non-itemizers to claim the deduction, we can increase homeownership while reducing the number of Americans who must file the more complicated 1040 tax form. Third, a new family tax credit would replace three existing tax incentives -- the Earned Income Tax Credit, the Child Credit, and the Dependent Care Credit -- and provide more benefits to more families than all of them combined."
What about renters? People don’t buy houses to get tax credits; they buy homes that remind them of their idea of “home,” or because they like the schools or they want privacy. Or maybe they’re just tired of living with white walls and generic light fixtures in a rental that they can’t personalize.
Incentives, as we have learned with the income tax, most often turn out to be dis-incentives. With Weinstein’s plan you are still paying for education and homes with after-tax dollars. How much better – and what better incentive – to pay with before-tax dollars. Under the FairTax plan, everyone gets to keep 100% of their income to spend, save or invest however he or she sees fit.

"Finally, a universal pension (UP) would replace 16 existing IRA-type accounts with a single portable retirement account for all workers. . . . Universal pensions could also offer a progressive alternative to Bush's plan to divert Social Security payroll taxes into private accounts." The FairTax leaves it up to the individual to choose how to save and invest money. Tuition, house payments, all purchases – all paid with before tax dollars. It’s cynical for government to treat citizens like incompetent children, trying to guide them with "incentives."

Other things are missing in this tax plan that are simply and neatly handled by the FairTax. The "Family Friendly" plan neglects the elderly and the disadvantaged – the FairTax takes care of them nicely by providing a prebate – a monthly stipend so that no one pays tax at all up to the poverty level.

The FairTax does not tax productivity. The Family Friendly plan does. To be the only country in the world that doesn’t tax production gives the US a HUGE international trade advantage. The "Family Friendly" tax system doesn’t even address those issues nor does it promise to expand the tax base like the FairTax does. Under this system, Weinstein again: "This approach would also restore basic fairness to the system by treating everyone the same. Millions of middleclass and low-income families are not able to take advantage of the existing mortgage deduction because they don't itemize, and millions more don't contribute to an IRA or 401(k) because they can't afford it. By making all four of these broad new tax incentives available to non-itemizers and making the incentives for college and retirement refundable, everyone will get a tax break." But it doesn’t treat everyone the same: What about families who don’t own homes? There’s no help here for renters – many of the elderly don’t WANT to struggle with the upkeep of homes and yards. Giving them all of their pension funds, like FairTax does, is fair.

The President charged the panel with the direction to simplify tax laws, to make the tax law fair while encouraging home ownership and charity giving, to promote economic growth and strengthen US competitiveness in global markets. There is only one proposal before the panel that meets all those criteria and that, ladies and gentlemen, is the FairTax.

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Tuesday, May 31, 2005

Keep it Now or Later

I’m not really sure I know what it is sometimes. But, some people actually think they always have to spend money to save money. It’s like going shopping with a coupon, but you actually walked out with an item, but having less money than what you walked in with. People are like this all the time with tax deductions.

I actually heard my accountant (which I’m not going to fault, because they all do it) tell me that I need to come up with more deductions; because it will help me with my 1099 income. Hey, go buy a $2,000 computer, so you can get a $600 tax deduction. Does this make sense to you? Not me. But, hey maybe that’s why I favor the FairTax over the several other convoluted options presented to the President’s Tax Reform Panel earlier this month.

Under the FairTax, some important deductions would go away. I can tell you, however, that is a very good thing, for even the ones getting the deduction currently. The home interest deduction is one of them. For one thing, only about 30% of the American taxpayers even take this deduction. The remainder of us use the standard deduction, which is simpler. Under the FairTax, EVERY HOMEOWNER would take advantage of the tax laws. Under the FairTax, you would get that “deduction” without filing any paperwork

Take this as an example. Say you have a store coupon for $0.20 off of a $1.00 item, such as a box of crackers. You, an avid shopper, expect to pay $0.80 for the crackers when you get to the counter. That is what a deduction would be like for you. What if the cashier told you that they were having a sale today, and all the crackers are free? Would you be upset if you couldn’t use the coupon? I hope not. If so, stop reading…there is no hope. Under the FairTax, you wouldn’t have to use the coupon (deduction). You would be getting it for free. Interest, including mortgage interest, is not taxed under the FairTax.

So, not only do you save for a down payment much quicker under the FairTax; if it is a new home, you only pay a sales tax on the price of the house and not the interest. Even better, if it is an existing home (some call them “used”), you don’t pay any sales tax at all. Not only that, but the interest that you are paying will be less, by about 25%.

Now: on to something even brighter. Why do people make contributions to charities and/or churches? Once again, it would not be wise to come to the end of the year and say “I want to pay fewer taxes, so I’ll contribute my money to a charity”. Just because you donate, doesn’t mean you save money. People contribute money to organizations because they care about an issue, such as feeding starving children or building a church. It would be an insane assumption to believe that charity contributions would decrease because people no longer have a deduction. Under the FairTax, there is no need for a “deduction” when you don’t pay any taxes anyway on contributions and gifts. If you are not buying a product or service, you won’t be paying taxes. That means that without filing a 1040 and claiming a deduction, you can give till it hurts (more than before because you will be doing it with pre-tax dollars), without any federal bureaucracy taking a single red cent from your pocket. Would you rather give your organization $1.00 - free-and-clear or $0.70 from after-income-tax money (if you spent all your earnings on charity)?

If you think it would be awesome for your checkbook, think about the non-profit organizations, such as 501(c)3s. Non-profit organizations would no longer have to pay (time or money) for massive paperwork just to get their non-profit status or file tax returns. So, all in all your $0.50 gift from your gross pay becomes a $1.00 contribution to them. I think that they could stand to use double their money that they are getting now.

One more thing: the education tuition (i.e. college and private elementary schools) that is paid out for human capital (a “mental” investment) is paid with pre-tax dollars, too. If anybody has ever tried to claim a deduction for education, they know it’s not even a full deduction, such as the mortgage-interest or charity deduction. Without forms, education tuition will be tax-free.

Please sit down and think about it: If you are not paying income taxes, you do not need deductions! It is only when the government is taking your money in the first place, when you need deductions to compensate.

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Sunday, May 29, 2005

Lancing Vance

Lawrence Vance wrote this piece called FairTax Fraud for the Mises Institute online. Here is his entire argument (it begins about halfway down the first page of his article). Just for the record, I want to state here that I have read S 25 and HR 25 in their entirety. Vance seems to think FairTax supporters haven't done that.

But onward: His article is in blockquotes. Mine is in straight text.

. . . So rather than just repeat them and apply them to the current FairTax scheme, I will focus instead on problems with the FairTax proposal itself.

The Fair Tax Act of 2005 is H.R. 25 in the House (introduced on January 4) and the identical S. 25 in the Senate (introduced on January 24). FairTax proponents who complain about the complexity of the Internal Revenue Code are going to have a hard time convincing those of us who have actually read this bill (it came to 59 pages when I printed it out from my computer) that it will simplify the tax code when it contains language exactly like that which appears in the tax code:

(b) Rebate Defined- For purposes of subsection (a) (2), the term 'rebate' means so much of an abatement, credit, refund, or other payment, as was made on the ground that the tax imposed by chapter 41, 42, 43, or 44 was less than the excess of the amount specified in subsection (a)(1) over the rebates previously made.

Come now, Mr. Vance, surely you know better than that: The language of the bill has nothing to do with the performance of the FairTax. It simply describes it; it will be a matter of history once it is passed and the FairTax goes into effect.

Strangely absent from the list of co-sponsors of H.R. 25 is Congressman Ron Paul(R-TX). Representative Paul has consistently been named the "taxpayers'
friend." If the FairTax proposal was as friendly to taxpayers as its proponents say it is, I would expect Congressman Paul's name to be first on the list of co-sponsors. FairTax advocates claim that their plan would repeal of the 16th Amendment.

I suppose Congressman Paul is like so many of his peers, he doesn’t care what his constituency says, he’ll wait to see what everyone else does. That seems to be how Congress operates – lots of Indians and a very few Chiefs. And the Indians are more interested in themselves than their constituency. That, however, can and will be changed.

However, all H.R. 25 does is repeal Subtitle A of the Internal Revenue Code of 1986 that relates to income taxes and self-employment taxes and Subtitle C that relates to payroll taxes and the withholding of income taxes. The only mention of the 16th Amendment in H.R. 25 is when it says: "Congress further finds that the 16th amendment to the United States Constitution should be repealed." To repeal the 16th Amendment would require a constitutional amendment. Can Congress be relied on to pass a constitutional amendment that repeals the 16th amendment after a national
sales tax has already been enacted? And even if Congress passed a constitutional amendment, it would still have to be approved by three-fourths of the states. Without the repeal of the 16th Amendment, what is to prevent an income tax from being imposed again after a national sales tax has been enacted?

Actually you're only partly right. A constitutional amendment has to be passed by 3/4 of the LEGISLATURES of the states. That's so easy that it was accomplished in less than a year when they passed the 26th Amendment.

The FairTax will be passed only if a massive grassroots effort gets it passed. Once that is done, that same grassroots effort will turn toward the repeal of the 16th Amendment.

I find it sad that you, who supposedly are an expert in these matters, do not seem to be aware that the current income tax system we labor under is unconstitutional. Surely you would mention that in this context if you were aware of it. Article 1, Sec. 9 of the Constitution of the United States says, “No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken.” Amendment 16, the US Supreme Court found in Stanton vs US Baltic Company, “conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged.” In fact, the tax on individual income is so unconstitutional that the IRS hasn't challenged a number of lawsuits about it lately. But that's another issue. Back to the FairTax.

Although the FairTax would eliminate the filing of all individual tax
returns, the FairTax turns every business into a tax collector. Every small
service business and every Internet business that does not currently collect
state sales taxes will have to collect taxes for the federal government.
Every doctor will now have to charge sales tax on his services. Where will
this end? Will the neighborhood boy who mows lawns have to begin collecting
federal sales tax on each lawn mowed? Will the neighborhood girl who baby
sits have to do likewise?

Those retail businesses already pay taxes – state taxes. FairTax would simply be an extra checkbox on the state sales tax form. As for the babysitter and lawn-mower, those are service jobs that are so small that there’s no reason to expect them to pay taxes at all. Certainly no one’s going to come after them if they don’t.

The national retail sales tax rate under the FairTax plan is 23 percent.
That is on top of state sales taxes that are currently collected by
forty-five states. That is on top of the sales tax that many cities and
counties also collect. That is on top of the special taxes that exist on
hotel rooms in most areas of the country. I suppose that a national retail
sales tax would also apply to gasoline. There is no mention of the federal
gas tax anywhere in the Fair Tax Act of 2005. No list of taxes that are
supposed to be eliminated under the FairTax includes the federal gas tax.
Does this mean that there will be an additional 23 percent tax on each
gallon of gasoline?

You forgot to mention that every item that is sold at retail already has from 20% to 30% embedded taxes in the price. Companies and corporations pass the taxes they pay along to the customers who buy their product. Those taxes would be eliminated by the FairTax, thus bringing the price of those goods and services down so that adding the FairTax to the price comes out even. Although the prices of goods and services would be reduced by elimination of income taxes, employee taxes and other corporate taxes, the price to the consumer will be the same when the FairTax is added on. The reason for that is to fund the government.

Of course if we should insist that the government reduce its spending, we could lower the FairTax.

The FairTax will make it easier for Congress to raise taxes. The initial
rate of 23 percent is supposed to begin in 2007. For years after 2007, "the
rate of tax is the combined Federal tax rate percentage." This combined
percentage is the total of three things: the general revenue rate (stated to
be 14.91 percent); the old-age, survivors and disability insurance rate; and
the hospital insurance rate. This is all but saying that the rate will be
adjusted every year. And it will be very easy for Congress to do so. To
raise several billion dollars of additional revenue, all that will be
necessary is for Congress to raise the tax rate by one percentage point by
small adjustments in one or more of the three items that make up the
combined percentage rate. It will be sold to the American people as "a penny
for progress," or some other deceitful scheme.

So what’s new? It’s already easy for Congress to raise taxes; the difference with the FairTax is that they can't do it in secret like they can with income taxes. They do it all the time without bothering to tell the taxpayer. With the FairTax, individuals know what they are paying and can see exactly what Congress is doing (unlike now, when so much of our taxation is hidden). Under FairTax, the economy will expand Under FairTax, the taxpayer can control how much s/he pays in taxes simply by controlling his/her spending. You can do that with income tax only by stifling your income – and people do that, to the detriment of their livelihoods and the economy.

However, you’re overlooking a most important facet of the FairTax and that is the fact that it taxes consumption rather than productivity. When the US is the only country in the world that does not tax productivity we will become immensely attractive to foreign investment. American corporations who have left the US will find it economically feasible to bring those jobs home. Corporations like Daimler will find the US fertile ground for business. The economy is predicted (by world-class economists who have studied this) to grow by 10% a year once the FairTax is in effect.

Under the FairTax system, there are no longer any Social Security and Medicare taxes. However, this does not mean that Social Security and Medicare will be eliminated. The inclusion in the combined percentage of the old-age, survivors and disability insurance and the hospital insurance rates means that the Ponzi scheme known as Social Security will continue as it is, only the way it is funded will change.

There’s nothing wrong with social security and medicare that a little money wouldn’t cure. These are programs that are in place to ease the way for our older and physically disadvantaged citizens that speak well for the humanity and social consciousness of our society. With the increased tax base and burgeoning economy stimulated by the FairTax, both will be in fine shape.

The "underground economy" that income tax advocates complain about will
certainly increase under the FairTax system. Even if the highly dubious
claim that there will be an "average producer price reduction of 22 percent
for goods and services in just the first year after the adoption of the
FairTax" is true, not having to pay a 23 percent tax on an item is a
tremendous incentive to make a purchase in the "underground economy."

I think you misunderstand what the underground economy is. You are speaking of embedded taxation, which I covered earlier. The “underground economy” consists of tax evaders ($350 BILLION annually, according to the IRS), drug dealers, pornography of all kinds, illegal immigrants and more, all of which are, necessarily, consumers and all of which would pay taxes under the FairTax system. Add to that 40 million foreign tourists a year and you have a very significant increase in the tax base.

The claim that the IRS will be eliminated under the FairTax is bogus.
Although the national sales tax will be collected by the states from
retailers, it is still a national sales tax, and as such, its collection
will have to be overseen by some agency of the federal government. Just
because the bureaucracy will no longer be called the IRS doesn't mean that
it will be eliminated. According to The Fair Tax Act of 2005:

There shall be in the Department of the Treasury a Sales Tax Bureau to
administer the national sales tax in those States where it is required
pursuant to section 404, and to discharge other Federal duties and powers
relating to the national sales tax (including those required by sections
402, 403, and 405). The Office of Revenue Allocation shall be within the
Sales Tax Bureau.

Title II, chapter six, section 603 of The Fair Tax Act sets up the Problem
Resolution Office and authorizes "problem resolution officers." There will
still be tax courts according to title II, chapter six, section 602 and
chapter nine, section 7451. Changing the phrase "Internal Revenue Service"
to "Department of the Treasury" and "Commissioner of Internal Revenue" to
"Secretary" doesn't eliminate the federal bureaucracy.

No, but it cuts it significantly – from thousands to tens. Nothing is going to eliminate the Federal bureaucracy and no one in their right mind would want to do so. FaitTax just makes it smaller and more efficient and frankly, Mr. Vance, I think you’d have to be either insane or stupid not to support that.

With the FairTax, the federal government will also be a tax collector in a new way: at the post office. There is no exemption of postal goods and
services mentioned anywhere in the Fair Tax Act of 2005. I suppose this
means that stamps, P.O. Box rental services, and package mailing services
will be subject to the new 23 percent tax.

There is no exemption for anything in the FairTax. With e-mail, UPS and FedEx, the USPO is somewhat redundant anyway. Besides, a postage stamp that used to cost 3 cents now costs 37. That happened without the FairTax and with no improvement in service.

The FairTax is progressive. What could possibly be fair about a progressive tax where some people have to pay a higher percentage than others merely
because they are deemed to be "rich"? How is the FairTax progressive? I
thought it was a flat 23 percent on all new goods and services? It is and it
isn't. Under the FairTax plan, everyone pays the 23 percent tax on
everything, but "every household receives a rebate that is equal to the
FairTax paid on essential goods and services." The rebate is given out each
month, and is based on family size and the poverty level. But like the
current tax code, the FairTax can also function as a tool for income
redistribution because "the poor [will] actually pay less than zero-percent
retail sales tax on their spending. Much like with the earned income tax
credit of today, the rebate may give them more money than they actually
spend on retail taxes."

Rich people get rebates, too. And the wealthy don’t have to pay more if they don’t want to. They can shop at WalMart instead of Armani’s or Chanel, buy at Target rather than Harry Winston’s or Nordstrom’s. They can drive Chevys and Toyotas instead of using limousines or scooting around in Jaguars. A purse from Penneys lasts as long as a Kate Spade purse and a house is just as nice as a mansion or two. But I bet they won’t do it. Half the fun of being rich is showing off.

The real problem with the FairTax is threefold. In " An Open Letter to the President, the Congress, and the American People Concerning Reform of the
Federal Tax Code," which is posted on the FairTax website along with the
endorsement of seventy-five "professional and university economists," we can
see the trouble with the FairTax immediately:

We are not calling for elimination of federal taxation, which would be
irresponsible and undesirable. Nor does our endorsement call for reduced
federal spending. The tax reform plan we endorse is revenue neutral,
collecting as much federal tax revenue as the current income tax code,
including payroll withholding taxes.

There is only one word to describe the fact that the federal government now
spends almost $3 trillion a year: obscene. At least 90 percent of what the
federal government spends is unconstitutional, wasteful, or against the
limited-government principles of the Founders. The only thing the FairTax
does is change the way the state confiscates the wealth of its citizens. As
Congressman Ron Paul says: "The real issue is total spending by government,
not tax reform."

If you think the real issue is Federal Spending, then deal with that issue and leave the FairTax alone. Like veteran’s benefits and prescription prices, national health care and national transportation, Federal Spending has NOTHING to do with taxes. If that’s your issue, deal with it. Reducing income taxes won't cut spending; it'll just cause a raise in taxes somewhere else. MY issue, and the issue of 600,000 other Americans is to get rid of the current income tax structure and replace it with the FairTax.

Because the FairTax is a consumption tax, Murray Rothbard's conclusion about
consumption taxes is apropos:

The consumption tax, on the other hand, can only be regarded as a payment
for permission-to-live. It implies that a man will not be allowed to advance
or even sustain his own life, unless he pays, off the top, a fee to the
State for permission to do so. The consumption tax does not strike me, in
its philosophical implications, as one whit more noble, or less
presumptuous, than the income tax.

That’s poli/soci-speak. Jargon that has nothing to do with the actual day-to-day problems of working, paying bills and trying to earn a little better life for your family. “Permission to live?” That’s sheer semantic stupidity. A consumption tax like the FairTax makes it possible for people to control 100% of their income – to spend it, save it or invest it. Whatever we do with it is good for the economy and good for us. Stop throwing smoke bombs like that in your arguments and stick to reality.

The FairTax does nothing to tame the federal leviathan. The solution is
nothing less than a drastic reduction or wholesale elimination of its
revenue source. What is fair about allowing the government to confiscate 23
percent of the value of every new good and service? FairTax proponents may
call it necessary legislation, but I call it highway robbery.
You are repeating yourself; I suppose because that's your real argument. And it is not an argument against the FairTax -- actually it's an argument FOR the FairTax. No tax or lack of tax is going to tame that. Only control of your congresspeople and senators can do that and if you can’t control them, replace them. What’s fair about adding the tax is that with the eliminated embedded tax, prices come out even. FairTax doesn’t cost more but it increases the tax base and the economy. Call it highway robbery if you want, but you’ve called so many other things incorrectly (and emotionally) in this piece, I don’t think another little bit of tacky name-calling will matter a bit.

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