Do They <em>Really</em> Support a Fair Tax?

Matt Lewis
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Posted: Sep 07, 2007 9:25 AM
Over at TNR, Bruce Bartlett continues to attack the Fair Tax, noting that it was invented by the Scientologists.  Personally, I think that fact is irrelevant -- though interesting.  

But my concern is really whether or not the Repubicans who have jumped on the Fair Tax bandwagon are sincere.

The 1986 tax reform plan made the tax code flatter -- and then candidates like Steve Forbes (and consequently, Bob Dole) spent years -- and in the case of Forbes -- millions of dollars -- pushing a Flat Tax.  So, one could argue, that the Flat Tax is more politically expedient than a Fair Tax.

So why are so many Republican politicians talking about the Fair Tax today?

One cynical view is that -- since the Flat Tax is more politically popular -- if elected, a politician might actually be expected to implement it.  Meanwhile, supporting a Fair Tax allows one the luxury of sounding conservative, without the burden of having to implement the reform (the assumption is the reform would never actually go anywhere).

That's not to say a Fair Tax isn't a good idea -- it is.  

Critics always argue that taxing consumption, as the Fair Tax does, would discourage consumption, thus hurting the economy.  But they fail to note that this tax would result in more disposable income to spend, essentially shifted the tax.  Besides, spending less means saving more.  And saving more results in generating more disposable income to spend.  So the Fair Tax would be a step in the right direction.

Personally, I would take whichever reform we can get.  The real question is which tax reform we can we actually get passed. 

And yes, I am skeptical of all the support some GOP nominees are giving the Fair Tax ...