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Flat Tax or Fair Tax?

hjismsm105 Wrote: Jan 31, 2013 10:53 AM
It seems that what everybody that advocates for some type of tax based on income don't take into account are the people that do most of their work off the books. And I know a bunch of them. They do work for home owners and side work for businesses that do not hand out 1099s reporting their income to the IRS, so I see no need for that changing with a flat tax. And then, having showing very low or no income makes them eligible for all the government gimmies. Some may think this is a minor problem but I see a lot of it that goes on in my area and I can assure everybody reading this that it is a big problem.
Ned6 Wrote: Jan 31, 2013 3:59 PM
You forget that the tax on salaries is embedded in the final cost of the product or services as is the tax on profits. The FairTax is based on cost, which is ultimately made up of salaries and profits, if you go back through multiple stages of production. Therefore the tax on consumption is not avoided with an income tax. In fact, the FairTax is easier to avoid, since the combination of FairTax and State sales tax will add a cost of 35-40% to services provided, where buyer and seller both have an interest in not reporting the transaction.

I’m at Hillsdale College in Michigan for a conference on taxation. The event is called “The Federal Income Tax: A Centenary Consideration,” though I would have called it something like “100 Years of Misery from the IRS.”

I’m glad to be here, both because Hillsdale proudly refuses to take government money (which would mean being ensnared by government rules) and also because I’ve heard superb speeches by scholars such as Amity Shlaes (author of The Forgotten Man, as well as a

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