Hank  Adler
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In response to my lengthy paper regarding H.R. 25, the “Fairtax”, Mr. Neal Boortz published a response responding to a few of the issues discussed in my paper.

Let’s first go to Mr. Boortz’s refusal to acknowledge and admit that the Fairtax is a 30% sales tax. He says:

The Fairtax is not a traditional sales tax. Consumer prices are quoted with the sales tax included.

The first sentence of this statement is inaccurate. A sales tax is commonly defined as a tax levied on the sale of goods and services. The tax proposed under H.R. 25 is a traditional sales tax, a tax levied on the sale of goods and services. The only difference is that the tax under H.R. 25 is calculated in an untraditional manner and in a manner that arguably attempts to hide the rate of the tax from the public.

 

Traditional Sales Tax Calculation

Cash going to the seller                                       
$100.00                                              

Traditional sales tax at 23% rate                         
$  23.00

Total price to customer                                        
$123.00

Taxes paid by the customer                                  
$  23.00                                              

 

H.R. 25 Sales Tax Calculation

Cash going to the seller               
$100.00

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Hank Adler

Hank Adler is an Assistant Professor at Chapman University.

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