Revisiting the FairTax

Andrews… seems that you are bent on opposing the FairTax. Not sure if this response is even worth writing but… here goes…

1. There aren’t any tax exemptions for Indian reservations in the FairTax bill. The FairTax moves away from creating winners and losers in the tax code. It is neutral across the board.
2. Will it be penny-for-penny revenue neutral? This would be impossible but it does solve Social Security and Medicare trouble in the near future and it will foster growth in our economy which will grow funds into the future as well.
3. There is a thing called duty that U.S. government charges on personal items purchased outside of our lands. This does not go away. In fact, it would be wise to fold this into the FairTax. As for people sneaking items across the border… some will. But with a fair tax system that doesn’t see after-fairtax prices materially different than current prices why bother? Plus, if we as citizens are happy and prosperous, why go to such lengths? There are plenty of tax avoidance schemes with our current system… just pay cash that doesn’t make it on the books. Many will argue that the FairTax will tax avoidance will be far less with the FairTax. It is hard to avoid taxes when buying from grocery chains, major retailers, hospitals, etc.
4. Your fictional catering business has some record of sales to customers? How about a business license, insurance, etc.? Think it might be a red flag if the business reports zero sales month after month?
5. And by eliminating several hundred million complex tax returns that contain W2s, 1099s, K1s, mortgage interest deductions, etc., etc. with, say, thirty million simple business sales tax returns that leverage state sales tax collection infrastructure we are maintaining the size of bureaucracy? Please… The prebate leverages existing Social Security Administration infrastructure.

6. Child custody? Um… software application that detects the same Social Security Number reported on two different households…? Will it really take an agency the size of the IRS to handle this? Please…
7. 45 of the 50 states collect sales tax. The remaining 5 will adjust. In fact, they will probably benefit moving to a sales tax vs. an income tax in much the same way our country will benefit.
8. On the prebate, I don’t see a better solution. If it stays true to its purpose it is excellent. I personally like the idea of only contributing to the government after I pay for the basic necessities of life. How to keep it true? Keep our heads out of the sand when it comes to anything related to taxes.
9. FairTax would be our only “federal” tax to replace income/corporate/estate taxes. This is how it is written. A state has every right to add any tax that passes state legislation. I believe that states will all fall in line behind the FairTax though. It would be much more efficient rather than maintaining multiple tax collection avenues (property taxes will likely remain). For states that do continue with income/corporate taxes, they will be less competitive & will chase jobs/capital/prosperity to other states.

Peace,

YK

There don't have to be exemptions for indian reservations, we cannot impose tax systems on them as they are sovereign nations. The Fair Tax does not change that.

Well, I suppose I can add these replies to my response as well.

It will be posted shortly.