Short Reply To Doctor Adams

Regarding the tax collecting bureaucracy… how does eliminating several hundred million annual tax returns that are highly complex with multiple tax documents (W2s, 1099s, etc.) and 66,000 pages of tax code (mortgage interest this, charitable deduction that, etc.) to validate against compare to collection of simple consumption tax reported by, maybe 30 million businesses? The FairTax leverages collection infrastructure that is already in place in 45 of the 50 states.

On the countless ways to defraud… Would that be countless more than gaming the 66,000 pages of existing tax code that when given the same tax scenario to 10 different CPAs will yield 10 different tax returns? Try defending the current tax code with the arguments that you put on the FairTax…

On prebate administration – the FairTax will leverage infrastructure already in place at the Social Security Administration.

On your modifying argument… it is a matter of dials and controls. The two dials and controls that are available in the FairTax are (1) the tax rate and (2) the poverty level. The FairTax is designed to tax only once at the end consumption of new goods and services. It is much harder to hide tax advantages to special interests on the consumption side.

With a Flat Tax, the rate is still a dial/control that can be adjusted… what about tax credits though? It would be much easier for the government to create tax advantages for those who may donate to their campaign funds. Again, I just don’t see how you hide tax credits on the consumption side. If you give certain businesses consumption tax exemption you are saying that ALL who consume with that business get the advantage and the business itself would gain a competitive advantage but this would be very transparent instead of hidden on the income side.

No tax system can be 100% perfect. There will always be people who cheat or try to game the system. It just seems very clear to me that it would be much more difficult under the FairTax. I am in software development. When old systems with thousands (or millions) of lines of code are no longer efficient (supportable, maintainable, scalable) it is time to re-write the software using today’s understanding of technology. The same can be said of our 100 year old tax code. It deserves a funeral not life support. 133 pages of FairTax code will be a great replacement and a great thing for our country.

Peace,

YK

I am writing a post to reply to this, as some of your arguments actually point out a problem with FairTax arguments I have been meaning to address.

Thank you for reading and commenting and welcome tot he blog. I hope my post satisfies you.