28 August 2007

"Fair Tax" Doomed

All it takes to see that the so called "fair tax" is doomed is a very swift summary of the proposal provided by NewMexiKen:

Say something costs a dollar. You will pay (not counting state sales tax) $1.30. . . . the proposal would tack the 30% on everything — new houses, tanks and airplanes the government buys, school buses and school books, new cars, clothes, food, medical care!

The proposal's 30% rate also ignores things like that fact that some economically purchases would in practice be exempted from the tax, and the fact that there will not be 100% compliance. A more realistic revenue neutral number is far in excess of 30%.

No comments: