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Flat Tax or Fair Tax?

latebloomer Wrote: Jan 31, 2013 10:15 AM

"...the flat tax and sales tax (and even, at least in theory, the value-added tax) all share very attractive features." Since the outcome of any plan will proceed from the premise it is founded upon, let's look at the foundation of each of these. No matter how benign, the premise of a tax on income is that the taxing authority has a claim upon a portion of your work. In essence, you pay dues to society (embodied by the government) for the right to live your life. A tax on sales amounts to a service fee to the society for operations conducted within it's structure.

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latebloomer Wrote: Jan 31, 2013 10:22 AM

While a Value Added Tax shares this feature of a sales tax, it has an important (and very dangerous) distinction: it levies this fee at EVERY POINT in a production cycle where value is added (hence the name). It is. therefore, not a sales tax but a PRODUCTION tax. I suspect that before long you would end up with another IRS-style agency to control the application of the VAT.

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Flat Tax or Fair Tax?

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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